farm_portugal

Retire in Portugal

Lets start with the major assumption! We will Retire in Portugal! Therefore, i believe you guessed the theme of the post!

I will start by quoting a fellow FIRE living in Portugal, Mr Obvious Investor that with his post shared several of the living costs in Portugal. I would like to make a few comparisons about our current budgeted living costs and the ones explained.

Remember my post about milestones and goals? I have refered that currently our budget is around 2k monthly even tough we believe once we reach FI we would be able to achieve 1.6k monthly. Below is the drill-down:

Scenario 1 (Current 2k monthly expenses) – Retire in Portugal

For this one to be more realistic, i’ve removed the Rental apartment costs since this is something – as i have explained in this months update here – that will be removed as a cost. A drill-down into the categories and budget.

CategoryBudget
Housing €        599.81
Energy €          60.00
Telecoms €          67.39
Water €          20.00
Grosseries €        200.00
Auto Insurance €        129.55
Auto Maintenance €          58.74
Auto Gas €        240.00
Parking €          55.00
Professional expenses €          16.50
Hobbies €          40.00
Clothing €        100.00
Health €        122.00
Eating Out €        200.00
Others €        113.59
Total €     2,022.58

As you can see we have some costs which can be related to not yet achieving FI like maintenance, gas and insurance with 2 cars. This would be the cost of living for a family of 2, no Kids and living in Lisbon city center (owning the place, not renting). We also have a generous buffer for health costs which can be mostly free in Portugal.

Scenario 2 (Future – FI – 1.6 monthly expenses) Retire in Portugal

For this scenario i’ve made a few adjustments like reducing almost to 0€ the housing costs. We have to still pay IMI which is a tax to the municipality. I’ve considered the scenario that we move to our farm which is located ~55 minutes driving from Lisbon which is paid in full.

I’ve also reduced Auto insurance, maintenance and gas to half since i do not expect we need more than 1 car once we reach FI. This can be a challenge since me and Mrs.Firecracker are used to move independently. I’ve maintained all other values. Values are the following:

CategoryBudget
Housing €       50.00
Energy €       60.00
Telecoms €       67.39
Water €       20.00
Grosseries €     200.00
Auto Insurance €       64.78
Auto Maintenance €       29.37
Auto Gas €     120.00
Parking €       15.00
Professional expenses €       16.50
Hobbies €       40.00
Clothing €     100.00
Health €     122.00
Eating Out €     200.00
Others €     113.59
Total €  1,218.63

Whooaa. Values are even lower than 1.6k ! This is good news right? But is it doable?

Conclusions

Do you think its doable to live outside of Lisbon with housing payed in full for the cost of 1.2k monthly (14.6k yearly)? Well, lets even assume 1.6k (19.2k yearly).

I’ve seen many people pointing to their FI goal in Portugal to be around 1M or even 1.2M . Are they considering an extra Ferrari? Im really wondering how they come up with this values and would be interested in your opinion fellow reader.

And with Kids ? How much do you think i would need to add to our budget? Would the buffer of ~400€ monthly be enought?

Summing up, those would be our values for retire in Portugal. Scenario 1 would be applicable to our current spending living in Lisbon and Scenario 2 to living in our Farm outside of Lisbon.

Networth

Networth Update – 08/2019 (August)

This is first update on our Networth! We saw some adjustments putting together Mr.Firecracker and Mrs.Firecracker assets which meant a lot of time spent around excel sheets and whatsoever.

The progress is clearly positive and this will set the baseline for our goals. As of August 2019 our Networth value is 385 405.57€

Summary:

Unfortunetly i cannot really compare this to the previous months since we got up a significant value due to adding Mrs.Firecracker Apartment, car and other invesments to the list.

Assets:

Investment accounts

  • ETFs Portfolio: 22 371.14 €
  • Retirement Accounts (aka PPR): 12 801.29 €
  • Certificates Deposit + Emergency Fund: 8 066.14 €
  • P2P Portfolio: 10 280.95 €
  • Total Investment accounts: 53 210.42€

Real Estate (Based on Market Values)

  • Primary Residency: 300 000 €
  • Rental property: 285 000 € (i got an offer for 305k which means 285k will be for us)
  • Farms: 70 000 €
  • Total Real Estate: 655 000€

Cars

  • Mr.Firecracker Car: 20 000 €
  • Mrs.Firecracker Car: 18 000 €
  • Scooter: 1 500 €
  • Total Cars: 39 500€

Total Assets: 748 782.58 €

Liabilities:

  • Primary Residency: 194 630.26 €
  • Rental property + Farm: 168 746.75 € (Both are comprised on the same loan)

Total Liabilities: 363 377.01 €

How Networth drilldown looks like this:

Networth Portfolio
Firecrackers Networth

A few disclaimers:

  • We will need at somepoint to exclude a primary residency for the achievable goal. We want that our primary residency will be the farm which current has 2 houses but those need some repairs ~10k.
  • I will be selling the rental apartment soon. The value was marketed too high at 325k and i’ve now lowered it to 315k. I believe i will be able to sell if for 310k 305k which means 290k 285k net (less realtor comission). The purpose is to take advantage of the high market in Lisbon city center and sell high.
  • We currently need to have 2 cars 🙁
  • We will be shifting more towards our ETF portfolio from now on. This is where we want to have a big stake.

You can follow our Networth status always here

Monthly Update – 08-2019 (August)

Ahhh…Portugal in August!

What you think it will be:

Empty Beach

What it actually is:

Crowded Beach

Just kidding.There are still a lot of secret and nice spots around. You just need some research and how to avoid the turist mob.

In August, Lisbon is pretty much awesome. Literally the city goes into ghost town mode. Every Lisboeta (Word for people from Lisbon) goes to the Algarve or abroad which means less traffic to work, less people on queues, generally less people. This is a huge bonus for me as my patience for masses of people dimishes as my age increases. Go figure, right?

We just came back from our honeymoon so this was a light month in terms of spending. Hopefuly this will set the trend for the future!

We also merged several accounts (which can be a pain..) so this process is still ongoing.

I had a few non-programmed health spending taking advantage of an empty Lisbon in August and also less stress at work. This meant body checks, dentist, etc. This is something i would like to pay closer attention in the meantime. Better do it while young!

We also had a wedding in the south side of Rio Tejo which was pretty nice and which obviously meant an expense of around 140€.

We went also a few times for dinner as usual but we are trying to reduce to 1 time per week now. Lets see if we can!

Ah! We did an investment. We found a promotion to buy Zomato Gold which is a discount for restaurants and drinks on which we spent for a whole year 25€. This allows us to get the second most expensive plate for free if the restaurante is on the network. Luckily several restaurants we like or some new are there.

Considering we spend an average of 40€ on a dinner. This means we can lower our eating out to an average of circa 30€. We went out last time to an indian restaurant and saved 12€. 😀

Zomato

In case you want to join. Use my referal code. MIGU3266 . This will give you a 50% discount signing up but also give me 3 months extra. Win-win right? I believe this is only available in Portugal and in essence Zomato e something like TripAdvisor or TimeOut.

Here goes our August monthly update ! We will be focusing on the operational part. Income vs Expenses vs Savings rate.

Income

Salaries: 3 405.96 €

Expenses

Housing

  • Mortgages: 1 046.14 €
  • Insurance, Condominium, etc: 49.74 €
  • Utilities (Water, Lights, Gas, Internet, Phones): 146.10 € (He still had Netflix this month but we will be cancelling). Our energy provider also decided to bill us in the same month for something that would be laying in September (Great GALP..)
  • Other Housing expenses: 37.97€
  • Total Housing: 1 279.95 €

Cars

  • Fuel: 201.81 €
  • Maintenance: 65.41€ (This value is not spent but goes to another account. We do it yearly and this allows us to put is aside already)
  • Insurances: 129.55 € (Same here)
  • Transportation (parking, tolls): 44.05 €
  • Total Cars: 440.82 €

Health & Personal items

  • Consultations & Exams: 339.61 € (This month this value was crazy high..i found out i need to remove a tooth)
  • Hair: 17 €
  • Total Health: 356.61 €

Food

  • Grosseries: 131.96 €
  • Eating-out: 293.15 €
  • Total Food: 425.11

Misc

  • Wedding: 140 €
  • Rest: 91.45 € (Apple Music, Gifts ,etc)
  • Total Misc: 231.45 €

Total Spent: 2 733.94 €
Budget for the Month: 2 638.65 €

Savings Rate

SR = ((Income – Expenses) / Income ) x 100 = ((3 405.96 – 2 733.94) / 3 405.96 ) x 100 = 19.73 % or 672 €

We were a bit over budget for expenses but the value is still too high. This is something we are confident we could decrease to around 1 600 € monthly when we come closer to FI. See here why.

Unfortunetly our rental property still draws us around ~700€ every month (morgage, insurances, energy, gas). This didnt matter when we had it rented out but for the past 5 months it has been sitting around empty. Luckily i’m positive we will sell it very soon.

Fun moments

Last but not least! I had for the first time this year some delicious Caracóis (Snails). They are a delicacy best served with some toasted bread and a cold beer. Ahhh.. and this is all you could ask for !

Caracois
Come here snails!
ETF Portfolio

ETF Portfolio – Baseline!

This was a month of restructuring our ETF Portfolio. Firstly i’ve shown you how our P2P Portfolio looks like, but this is not all. In fact our “Big” stategy relies on our ETF Portfolio baseline. Currently with some funds still on the way and starting to build up our position using the broker DeGiro.

Degiro Broker

This means only a part of our funds are invested. Namely 12 872.67€ with the rest 9 498.47€ either in transit or in cash.

This means a total of 22 371.14€ – for August in our ETF Portfolio baseline. Yay. I will be posting here the progress.

ETF Portfolio
Firecrackers ETF Portfolio

The main objective will be to follow the Passive investments of our friends Bogleheads with an european adaptation (Thanks PRIIPS!).

The ETF Portfolio baseline should look like this soon:

Description% AllocationTicker
Long bond5.00%CBU7
Short bond15.00%TIPS
Commodity5.00%COMF
Gold10.00%AUCO
SP5007.50%CSPX
Small-Cap15.00%IMAE
Europe10.00%SXRG
REIT10.00%EPRU
Pacific10.00%CPXJ
Emerging12.50%IEMA

Most of the ETFs are located in the Amesterdam Euronext market in order to lower costs. Unfortunetly Small-caps US had to be bought in the German (XETRA) due to unavailability on the MSCI Ishares Small-caps there.

I will be defining why we chose this strategy and why each particular allocation and also what could be the comparable ETFs but i will leave this for anothe time!

The positions have been opened on the 19th August and currently we are 83.25 € up. Im not worried. We are in this for the long run and this was expected this the markets are in all time highs.

A great website you could use to check our some European ETFs is JustETF, luckily is one of the few that lets you check those ETFs in many of the European stock exchanges.

P2P Portfolio

P2P Portfolio – Baseline!

After our last post on Savings Rate, we would like to set the baseline for our P2P portfolio. As of this month the total value is 10 298.61€. Currently spread between two platforms.

The percentage is the return to date of each investment. We did an increase in our investments in P2P to circa 20% of our portfolio and therefore the interest should start to kick in next month (September).

For the sake of simplicity we have invested 5k in each platform as the principal which means the rest has been interests so far.

This month we increased the investments here from 1.5k in Mintos to 5k and from 1k in Robo.cash to 5k. I’ve been happy with the output so far so we shouldnt be changing much for the time being.

Mintos

Mintos Platform

Mintos released this month a huge list of 16% loans which i was able to catch some 🙂 Issue? They were only for 30d..this has of course meant i had to keep an eye on the platform to make sure i put my money running once the loans are finished and the principal received.

Current Mintos Portfolio

In case you would like to invest in Mintos you can get some bonus percentage (up to 1% more) additional if you do it via a referral link. Why not mine? here

Robo.cash

RoboCash Platform

Similar to Mintos platform we have Robo.cash. Here is a bit simpler. We dont select the investment as the platform does this for us. Its easy and the pay-out has been around 12% so far. Not bad!

Want to learn more about P2P?

For some reviews about P2P you can check the review by The Poor Swiss here and by The obvious investor here