investing

Hunting for a home part 4: is it better to rent or buy in Belgium?

This post is part of a series, check out the last posts if you want to know more about my search:

Effect of corona on the housing prices

The situation for buying a house hasn’t improved. The amounts of houses on the Belgian markets have increased only after the first wave passed, around September there was quite a large offer. The government created a lot of restrictions of house viewing in October, making it very hard to visit houses that are for sale.

As a result the amount of houses on the market plummeted in October and there is no end in sight.

So the government actually made sure the housing prices went trough the strongest rise in 15 years in Belgium despite a huge loss of jobs. The question is of course what will happen when the economy wakes up after Corona and house viewings are allowed again and we actually start seeing an actual job loss. I could not predict it last year and I still cannot.

I also have to admit I did come across a few houses that I almost accepted to be fine, so then I need to ask myself if I am not just to demanding?

The reason I am so demanding is the large amount of taxes paid on houses. A 6% minimum, but it could go up to about 12% if it is auctioned. Now if its your only house you can substract these taxes when you sell the house later on and buy a new one.

I don’t like to pay taxes.

The catch? There is a limit of about 12500 EUR to that. That means a house price of about 208000 EUR you can buy just fine and if you just live there for at least 5 years you will get all these taxes back if you decide to upgrade. As this is already an upgrade for me (my second home), that means that anything over that I will have just waisted on taxes.

But what can you get for 208000 EUR in Belgium right now? I did had a quick look at the market right now, and it is possible to find older 2 bedroom apartments with even a bit of outside space outside the city center. I would think this should be enough for any starter. Of course if you want to move closer to the city center you might look at a 1-bedroom flat, like the one I live in now.

Rent or buy?

So I re-read a blog of fightofire.com who was in a similar situation and eventually decides to buy after carefully examining the pros and cons. Since its his first home I absolutely agree with him that this was the best decision. He can still upgrade later on and he shouldn’t worry if its not perfect since it probably won’t be his final home.

And normally I would be in favor of buying again. Either a new bigger home, or a second home depending of your situation.

At the same time is the rise in housing prices really so big compared to the stock market? Say if you put 200k in the stock market right now or 200k in a house (that you live in yourself), would there be such a big difference in profit after 10 years? There actually wouldn’t be, given of course that you can put down 200k in cash for the house, which of course is unlikely.

The rise in housing prices (biggest in 15 years) was about 5.93%. This was the biggest in a long time. The stock market goes up about 7% per year on average. Of course you do have tax benefits from your own house, but at the same time you also have costs that can run up highly.

It was not an equal rise either. Houses at the sea had a much higher rise, most likely related to city’s at the beach closing down the beaches for non-residents. Obviously people bought out of fear that they would lose access to the sea. In the city “Nieuwpoort” right at the sea houses went up with up to 42%! And the coastal cities are probably the main reason for “the biggest rise in 15 years”.

Historical earnings are not necessarily a good reference to future earnings

Again this is for personal use as a rental property will also give you rent in addition to the rise, but it does show that from a financial perspective there is not that much difference in Belgium if you take up a safe, constant, passive investment strategy.

There is in any case no doubt that doing nothing will cause you to lose money as the only certainty in life is that the value of money steadily drops.

Buying your second house

  • Instead of paying rent I would be paying off principal, meaning I would be building up capital, and additionally I could leverage the unpaid principal when the value of the house goes up
  • I do believe the value of houses will keep going up, at the very least in the mid term and long term
  • When I moved into my apartment I kicked out the people that were currently renting the place. Don’t worry it were young people and they said they found something bigger for the same price, however when you are 70 and you get kicked out of your house I can imagine its a terrible experience, having your own house will make sure nobody can evict you
  • If you are confident of what you buy and you can live there long term, without a huge loan that will kill your saving rate, it is for sure the best choice
  • You need to keep a large amount of money in the money market as I should be ready to buy “now”, so while you search your money is not working

Renting your second home

  • Renting contract is usually about 3 years, and you can even get out of it (for a fee) even right after you sign the rental contract (the fee can be up to 6 months of rent but drops -1 month every year), so you are flexible
  • I only need to rent what I need right now, not what I might need in 3 years, since I can upgrade in 3 years if need be
  • I can still decide to buy in a few years if I come across a good bargain
  • You can invest all of your money currently in the money market in the stock market without having to worry the stock market will crash in 1 year. The money you have right now can work for you right now.
  • As its your second home you can rent out your first getting a rather cheap upgrade
  • If you bought a modest home for your first home, with a 10 year loan, after 10 years your loan is paid off and this gives you very little risk for renting, as you can keep the difference between rent and income from rent low

What is best for my situation

As you can see I have been hunting for a house for quite long, my first blog about it is already 2 years old. I am frustrated of the amount of money in the money market that is not working for me. At the same time I do believe I am way overdue for an upgrade. My apartment is a one-bedroom apartment in the city, which is great for starters, but in my current situation I am missing:

  • Preferably a garden, or otherwise a big terrace
  • A place to wash my mountainbike and a warm (or at least not to cold) indoor garage to work on it
  • A second room that I can use as office
  • Big living room to receive guests

I do like the location really. I love living in the city, but it doesn’t fit with the other requirements I have. So I would want to live outside the city, but I have no idea if I could get accustomed to the country life. Renting would be a much cheaper test to see if I could then buying. Additionally I am currently single and I would hate to buy something and find out my future partner doesn’t like to live there.

Additionally I can invest my money in the stock market, or perhaps even buy a second rental property where I can look more at rental value rather then emotional value.

Lets run the numbers on renting

How much can I rent my current apartment for?

Beforehand I never considered this idea, but right now I actually want to give this a chance. I currently have three loans as you can see in my yearly update (updated yearly in May) and two of these will be paid back by September, including my morgage on my apartment and one renovation loan. The third will be paid back by February 2023.

So that will give me the financial space that I need to decide on rental. My apartment building contains 4 other apartments similar in size. I happen to know one is rented out for 650 EUR and one for 630 EUR. Both are all in, so I would think 550 EUR is a realistic number I could ask plus another 60 EUR for a garage I have, who are scar and popular in the neighborhood. So that leaves me at about 600 EUR in rental revenue per month or 7200 EUR per year.

How is it taxed?

Taxes in Belgium are pretty special for rental properties. Rent is actually a lot lower then in other West European countries, maybe partly because taxes are low as well.

Every home has something what they call “KI” (=Kadastral Income), this is a fictional rental value you can get for your property. Generally it is believed that it is lower then the actual rental value.

This number is increased with the index since it was created, and then you add another 40% to get the amount you will be taxed.

In my case that would mean (KI apartment + KI garage)* index * multiplier

This multiplier is 40%

Or (583 + 60) * 1,7 * 1,4 = 1530 EUR

Now this is the part you need to pay taxes on. This depends of your taxes. Generally people in Belgium pay 50% taxes + your local taxable amount: taxable amount * tax percentage * local tax percentage

So in my case this would be 1530*0.5*1.067=816 EUR

Complex right? But at the same time 816 EUR per year or 68 EUR per month is quite modest.

But Belgium wouldn’t be Belgium if there was not another loophole. Namely if you move for work related or social reasons from your one and only home you will pay 0% tax.

I have actually used this loophole in the past when I moved abroad for work. This was actually much easier to argue since my work was in another country and I couldn’t possibly drive there every day from Belgium.

Now I went a bit more creative. I live in a one-bedroom apartment so I don’t really have an office space. Since working from home is not going anywhere, I felt moving because I needed a separate office space might be considered a valid excuse for moving. I have asked them this question directly and expect to get an answer within the next days. I would say there is a 50/50 chance they will accept this but it is hard to tell. I will update this blog when I have this answer.

What about insurance?

There is a limited offer of rental insurances in Belgium. Immoweb for example will give a rental insurance, just like Axa bank. Generally they charge about 5% of the rent. Most likely I will be getting this rental insurance just to feel more comfortable.

So what budget would I foresee for rent?

So with a 600 EUR – hopefully tax free – rental income, I would say that if I can find something for 850 EUR I would say that’s ok. Then I only pay 250 EUR every month on living then I would if I would not move and I would feel very comfortable to put 100% of my saved income into the stock market.

I realize its still more then just staying where I am and I could invest even more if I didn’t change, but this would not make me happy. Living now is just as important as living when I am 60. I don’t want to sacrifice my current self for my future self and I will still live bellow my means.

In conclusion..

I never considered rental before, but now it actually makes a lot of sense. I want to give myself a few more months to find a house to buy and at the same time I want to have a look at the rental market and see what I could get for my budget to see if this is feasible.

And please let me know what you think. What do you think of this plan? Do you prefer to rent or buy?

Interested to see where I end up? For sure I will be sharing this in one of my next blogs. The goal is really to move this year, so sign up to stay tuned!

Financial Independence · investing

December 2020 Portfolio update & outlook for 2021

Let me start off by wishing you all a happy 2021, for 2021 I wish you all a year full of friendship, love, support, happiness, good health and profit of course!

The stock market continues to rise with good news for vaccinations all over the world. In the lead of top 5 most vaccinated countries we have some expected countries like US & Britain who started earlier in December, but there is also some surprises such as Denmark, Bahrain and most of all Israel. Israel already vaccinated 9% of their population and aims to vaccinate 60% by end of march! Amazing how they manage to leave all other countries behind. Their secret? They purchased large amounts of the Pfizer-BioNTech paying almost 3 times as what EU paid, but this way they did ensure very fast delivery dates.

Also in Belgium vaccinations with the Pfizer-BioNTech started, be it at a slower pace, but there is hope of acceleration as more vaccines will get approved by the EU the coming weeks and months.

Meanwhile most of Europe has closed their restaurants by now, but as usual the market looks at the future and with vaccines being distributed the market has a very positive outlook, causing a welcome rise in the markets this month.

The change of url went relatively smooth. The main issue was to get my domain rating back, which took some time, and which I noticed on my visitors coming from search engines, but by now my rating is at least the same level it was before, making sure it ranks high enough on google to bring in some users. I might create an additional blog with my 2020 results for the blog.

On a personal level the closure of the housing market has made it very challenging to view any houses. Housing visits are very restricted and I can feel realtors are really filtering out the visitors. I was only able to visit one house in December, so I am eagerly awaiting visitor days to be allowed again.

In terms of sports I have kept up with mountain biking and started running again after a short break. I purchased a sport watch using Miles I had gathered from business trips and I am looking forward to be able to do some sport events in 2021!

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

Image result for I am not a financial advisor

My Portfolio

My FIRE fund

Firstly I need to start off with explaining I added a new type of investment which is my “House Fund”. Beneath it is actually just 1 ETF, but the idea of this is to cover myself in more from the lowering value of money market in the case that I would not be able to find a house in 2021, at least my money will not lose value.

My Portfolio has increased to 78736 EUR (+8847). This included a 2800 EUR extra investment, but also included a end of year recalculation for my pension fund (+5322 EUR) and a rise in the stock market (+725 EUR). So the big good news show.

Generally I try to invest about 800 EUR / month in this portfolio.

My Real Estate fund

I decided to start a real estate fund. As said above I hope this fund will give me better protection from inflation as housing prices continue to rise.

I have no graph yet as the fund was just created but I can say that to start off I invested 2000 EUR this month into ISHSIII-CORE MSCI WORLD U.ETF. Its a similar ETF as SPDR MSCI WORLD UCITS just from a different provider. Its slightly more expensive (0.20% yearly costs vs 0.12%), but cheap enough to justify the purchase, and this way I have an easy way to separate my FIRE portfolio from my Real estate portfolio. Over the next months, maybe years I will be moving my money from the money market into the stock market.

ETFs

My ETFs are reporting a good profit, so a great way to close the end of year. As you know the inception date for most of these ETFs was the beginning of 2020, so that means that even in the biggest crisis year since WW II I managed to make a modest profit and so there is no “bad timing” to start investing.

Right now 13% of my FIRE fund is in the emerging markets. I want to increase this to slightly above 15%.

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made a nice jump this month, putting me at a 5.24% profit since inception.

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

Also my emerging markets ETF had a great month leaving me at a position of 5558 EUR or a total profit of 5.81%

Peer to Peer

I am left with only 5 peer to peer investments: 1 active peer to peer investment (Crowdestor), and with 100% of the funds in recovery (Mintos and TFGCrowd) and 2 where I am trying to recover some funds trough legal action.

I only show withdrawals here. So far I withdrew about 58.85% (+0.85%) of the funds I had invested in peer to peer.

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end dateMoney left to withdraw
Crowdestor30/09/2019297476025/03/202225.55%
Grupeer30/09/201989908990Defaulted. In Legal procedure100.00%
Iuvo Group31/12/2019224004/20200.00%
Kuetzal30/09/201910051005Defaulted. In Legal procedure100.00%
Mintos30/09/2019998285501/06/20218.57%
NeoFinance30/09/20191273004/20200.00%
PeerBerry30/09/20192548005/09/20220.00%
TFGCrowd30/09/201914348817/11/20206.14%
Total30/09/2019284301169805/09/202241.15%

CrowdEstor

  • I was able to cut my investment in CrowdEstor down a little bit further thanks to the secondary market and it is now at 760 EUR (-147 EUR). The last 760 EUR will be a challenge. At least 300 EUR of that is really stuck in defaulted projects. For the remaining 460 EUR I still have some hope. I need to withdraw another 440 EUR here to actually not have loss in my Crowdestor investment. I might not know this until the end of 2022.

Grupeer & Kuetzal

Nothing new to report this month, just letting legal action take its course. I am fully expecting to see some money back in 2021 here.

Mintos

Capital Service started repayments, but it is going so slow that I am strongly considering just to default this whole investment..in theory a large portion should be paid off in 3 years. My balance remains unchanged.

TFGCrowd

No additional repayments for TFCCrowd this month. My money is stuck pretty good there. They also introduced some rather wacko investment plans called plan terms. You basically give them your money and you have no idea what they do with it. Like a super high risk savings account. You would need to be pretty insane to invest in that, they are not even trying to appear like an investment site anymore apparently. Lets see if they manage to pay me another 6 EUR this month..

No way to do any kind of due diligence if you “invest” in this pon..I mean investment plan

Startups

I still have now 3200 EUR in startups invested, I have every intention to withdraw this whenever possible.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds9492
First job Pension plan1507
Second job Pension plan602
Third job Pension plan15949

Wins / losses this month

  • My Portfolio made a 725 EUR profit!
  • The domain rating of my blog got back to what it was before

What blogs are coming up next?

  • I need to review the 2020 goals I set (eek!), and set new goals for 2021
  • I want to review my savings rate for December and of course all of 2020
  • I want to set some realistic saving rate goals for 2021 (or should I say spending goals)
  • I will probably do an overview blog specifically for this blog, with visitor numbers etc somewhere in Q1 2021

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!

investing

How to build your ETF portfolio: the two-ETF strategy

High Risk high gains is very often just high risk. My FIRE strategy exists from mainly buying two ETFs as you might have seen in my monthly portfolio updates. Its quite a boring strategy actually, you usually know what to buy, and even though you read in the newspaper what the next big stock could be, you still buy the same old tracker every month. Even worse both my trackers are accumulating, so no seeing my dividends increase every year!

But there is a fun part, if you are in the accumulating part following this boring, simple strategy will also make your portfolio, on average, grow faster then other strategies. Read further bellow why I feel this is.

For those who don’t know what ETF is, ETF stands for exchange traded fund, it is basically a tracker that just tracks a certain index. It is all computerized so stocks within this ETF change based purely on the tracker with no human interaction. It can track the SP500 index for example. You have two kinds of ETFs, distributing and accumulating. Distributing hands out dividends and are therefore usually more motivating to buy, as you can see your income steadily increase.

Two ETFs you can buy

SPDR MSCI WORLD UCITS ETF

This is an accumulating ETF that tracks the performance of large and mid-sized equities in developed markets globally. Development countries are generally considered safe havens for

When we look into the factsheet we can see what stocks SPDR MSCI WORLD UCITS ETF contains.

As you can see bigger companies take up a higher % of the index. Thats infact how ETFs work, they will never have the same % of every company in their portfolio, instead they will have a bigger % of the biggest company, and the smallest company will only have a very small share. Indirectly I am participating in Apple, Microsoft, Amazon, Facebook, Alphabet, Testa and johnson & Johnson.

And in this way purchasing SPDR MSCI WORLD UCITS ETF gives you stocks in a dozen of sectors and over 23 developed countries. While you might say some of these sectors grow much faster then others currently, like Information technology, it is still good to be spread out as you never know how the next crisis will affect a certain sector.

So great diversification! But what do I like most of all about SPDR MSCI WORLD UCITS ? Costs! With a mere 0.12%/year this is about 10-20 times cheaper then actively managed funds.

iShares Core MSCI Emerging Markets IMI UCITS ETF

As I second ETF I like iShares Core MSCI Emerging Markets IMI UCITS. iShares Core MSCI Emerging Markets IMI UCITS is also accumulating, it tracks not the developed market but the emerging markets. As you could see on the above graph (cumulative index performance) it has performed very similar to the MSCI WORLD index, although you could see its a lot more volatile.

As you can see its mainly China that is boosting the iShares Core MSCI Emerging Markets IMI UCITS ETF, but also big upcoming economies like India and Brazil. These merging markets are becoming more and more important in the world, and their steep rise cannot be overlooked, especially because China is predicted to be the world n2 economy by 2024. India will be the third and Brazil will hold the 8th spot.

As you can see the emerging Markets will hold almost half of the top 10 spots! Especially the jump into the pack of India is quite remarkable. They went from emerging market economy to a top player. Although you might still see a different imagine if you look at per capita since China and India both have high populations, but its still great progress for those countries.

You would be insane not to grab a very easy opportunity to be part of this market and making Shares Core MSCI Emerging Markets IMI UCITS ETF part of your portfolio. Of course these countries do not have the 200 year old Democracy that US and some European countries have. So the risk is higher, but the gains might be well worth it.

What else do I like about Shares Core MSCI Emerging Markets IMI UCITS ETF? Costs! With only 0.18% costs /year it is one of the cheapest ways to invest in the big emerging market economies.

Why accumulating ETFs?

Distributing ETFs give out dividends every quarter (or more/less depending of the ETF). Its quite motivating to see your dividends increase every year and build up a passive income stream that way. But when you are in the phase where you are still acquiring wealth you would only be re-investing this money again in stocks. That would lead to extra costs to purchase these stocks. Additionally some countries, such as my own (Belgium) are taxing dividend income. Where accumulating ETFs are only taxed at the very end when you sell them, at only around 1%, compared to a yearly 30% tax on the dividends.

That’s why your portfolio will grow faster when you buy accumulating ETFS.

There is one exception (at least in Belgium), that is if you buy dividend stocks. Then there is a tax free part of up to about 600 EUR of dividends. Not very high if you want to build a large diversified portfolio.

How to balance between them?

Right now its commonly accepted that a good balance is about 85% SPDR MSCI WORLD UCITS ETF / 15% iShares Core MSCI Emerging Markets IMI UCITS ETF, so the developed markets still play the biggest role.

A third ETF you might consider: iShares MSCI ACWI ETF

If you don’t wan to balance between SPDR MSCI WORLD UCITS and iShares Core MSCI Emerging Markets IMI UCITS then you might want to consider a third option: the MSCI ACWI tracker. This Index tracker tracks both the developed countries and the merging markets in one tracker. So you don’t need to worry about balancing between them. I am actually considering to add this tracker to my portfolio also as a third tracker. At the beginning its quite easy to balance yourself, but balance will become harder without selling ETFs.

The tracker is also accumulating, so that means lower costs and taxes.

As you can see the global coverage of iShares MSCI ACWI ETF is amazing, tracking a huge amount of countries worldwide, although it does include some rather questionable countries such as Argentina, but they don’t take up much or any space at all on the tracker since it only tracks the bigger companies.

When looking at the division US and US companies hold a very tight grip on the top. However if predictions come true China should start playing a bigger role here, I think it will be interesting to look at this tracker again in one year and see how the percentages moved.

Why did I not purchase iShares MSCI ACWI ETF yet?

While I firmly believe in the iShares MSCI ACWI ETF, there is one downside for this convenience and that is cost. The ETF costs about 0.32% yearly and that’s quite a lot higher then SPDR MSCI WORLD UCITS ETF (0.12%) and iShares Core MSCI Emerging Markets IMI UCITS ETF (0.18%). So about triple the SPDR MSCI WORLD UCITS ETF and that is withholding me from purchasing this ETF for now. But I wouldn’t be surprised if a cheaper alternative hits the market the coming years, so its for sure something to keep your eyes on.

What does iShares or SPRD stand for?

The trackers are actually just called MSCI ACWI, MSCI Emerging Markets and MSCI WORLD. There is different exchange traded fund families that offer different types of ETFs. They then put this in front of the tracker name. It does vote confidence when a tracker is from a famous fund family such as iShares or SPDR. iShares was created by BlackRock and SPDR (pronounced “Spider”) was created by Standard & Poor’s.

Another very famous one with some good tracker is Vanguard, if you live in the US then I would consider their SP500 index fund tracker which is low cost and is performing very well.

What about other ETFs?

I believe it would be wrong to say that this is the only possible strategy. Infact I believe there is a lot of great ETFs outthere, and for sure a few of them have outperformed the ones I mentioned. I just like the low cost, low taxes, geographical and sectorial spread they deliver. I do believe if you just buy one ETF and stick to that thats already a lot better then getting individual stocks. Just be aware that the more limited the ETFs are the more vulnerable you are in case of recession.

For example the Invesco Dynamic Leisure and Entertainment ETF tracks the Dynamic Leisure and Entertainment Intellidex Index and holds a small basket of 32 stocks. While it has performed outstanding before 2020, at the Corona epidemic this ETF suffered much much more then any other as it lost almost 70% of its value going from 52$ to 17$.

While now somewhat recovered at 38$ it does show that if you choose your ETF to limited in sector or region you expose yourself at a big risk.

But as I said it doesn’t mean there is no great other ETFs outthere. One I also really like is ETFs based on the SP500. I used to have one of these in my portfolio and it performed great and you can even find them with a costs of only 0.05% per annum! I only sold them because I felt I would be greater diversified with SPDR MSCI WORLD UCITS ETF, but everyone can see it has performed pretty amazing the last years and especially if you have US nationality you should consider making this part of your portfolio.

Is it now the right time to buy ETFs?

Well some would say you missed the big drop of the market in March, and then was the time to buy, and some would say the market is overheated and a recession year could be coming up in 2021.

Perhaps, the thing is these are all things people say every single year. Its just more spectacular to say we are expecting a crash then saying I am expecting a modest but steady rise over the next years. Just keep in mind you are buying for the long term, you need to expect not to sell what you buy for another 10 years at least, and at that point it doesn’t matter if the crash comes next year or in 5 years, because in the long run you will have a modest steady rise.

So I would say the time to buy is right now. Now while statistically its better to put everything you have in the market right now, it’s probably not so good in case another recession comes. While in the long run you will recover you might get demotivated quickly. That’s most people recommend to invest a steady amount every 1-2 months. If you have a large amount of cash on your bank then you could decide to invest a larger amount then you usually would every month spread over about 24 months for example. This way you give yourself the chance to gently get to know the world of stocks and avoid panic when the market drops the first months you invest.

How can you buy ETFs?

You can buy all these stocks with brokers. There is a ton of them globally, one famous one that I use is DEGIRO. DEGIRO sells both SPDR MSCI WORLD UCITS ETF and iShares Core MSCI Emerging Markets IMI UCITS ETF. DEGIRO has low costs, good support and great UI and user app. But there is more such as Keytrade bank, or even your local bank might sell them (although they usually have high costs attached to them).

Interested to read more? Follow me and stay up to date of all the new items!

Financial Independence · investing

November 2020 Portfolio update: amazing recovery in the market!

While Europe is in crisis and in full lockdown the rest of the world marches on and steers the stock markets to new all time highs. Especially the news of one successful vaccine after another are giving that extra boost to the markets. Markets don’t always care what the current situation is, their value is often based on what the market will look like in the future. Markets don’t like insecurity, but it seems that the news of vaccines going around has taken away that insecurity and the market has already compensated today for what will happen in 6 months.

Meanwhile in Belgium the lockdown is being slowly lifted. Shops and swimming pools can reopen, although that is the only thing that is allowed. On Christmas it would be allowed to celebrate with 3 people indoors (not of the same household), if you are single. Families can only invite one extra person.

I changed the website URL to https://roadtriptofire.com. There was multiple reasons, firstly I always wanted to move to a .com domain but I did not want to lose my domain rating. I realized my domain rating is not so high to begin with, and I would be able to recover that rating and even rise above it in a few months. Another thing is that I was contacted by euromoney.com who don’t like that their site is being confused with mine, and to be honest I don’t like being confused with them as well! Lastly I feel the new name of the site reflects much better what direction this site is going to, the name already contains what this page is about, which is much better!

Mountainbiking is what is keeping me on my toes during these times. I have been going every weekend, but I do notice I have trouble to keep up with people with better bikes then me. I am riding a 300 euro mountainbike that’s super heavy, so I have become aware that I really need to upgrade. So I started to look for a pretty new second hand bike. The ideal bycicle would be one that someone purchased new, barely used and now wants to get rid of. I managed to get really lucky with my racebike, buying a full carbon second hand for just 250 EUR, but I might need a bigger budget for my mountainbike.

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

Image result for I am not a financial advisor

My Portfolio

My Portfolio has increased to 69889 EUR (+2880) with nothing additionally invested this month. Really a big win here!

I am considering to switch to a quarterly graph since it is getting a bit crowded. I went into some of my numbers all the way back to 2016, and came up with this:

Lets look into more detail for each of these investment types shall we.

Someone told me once you reach 100k it gets easier because compound interest starts to kick in. So close…

ETFs

For the first time the stock market reaches green! I bought about 25k of ETFs the beginning of the year and kept investing all year. Now it seems its paid off and I finally have a (small profit).

At this point I am really happy I limited my portfolio to just two ETFs, it makes it so much easier to track! And I keep finding it very easy to invest with DEGIRO, I am really happy I chose DEGIRO as broker!

I did notice I should invest more in emerging markets, the goal was to keep this ETF at 15% but its now bellow that so my next investment will be in this ETF.

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made a big jump this month, putting me at a 3.59% profit since inception.

SPDR MSCI WORLD UCITSTotal PortfolioMonthly P&LTotal P&L% P&L
31/01/202025160.4100
28/02/202023674-3852-3852
03/31/202022851-3362-7214
30/04/2020290343627-3587
31/05/202029590556-3031
30/06/202031411-95-3126
31/07/202033825816-2310
31/08/2020355741749-561-1.55%
30/09/202036924-576-1137-2.76%
31/10/202036483-983-2120-5.49%
30/11/202039991350713873.59%

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

Also my emerging markets ETF rose slightly

ISHARES CORE MSCI Emerging Markets IMI UCITS ETFTotal PortfolioMonthly ProfitTotal P&L% gain/loss%gain yearly
31/01/2020244800
29/02/20202249-205-205
31/03/20201918.38-331-536
31/04/20202099182-354
31/05/20202064-36-390
30/06/20202211147-243
31/07/20202318113-130
31/08/2020238265-65-2.69%
30/09/20202346-42-107-4.17%
31/10/2020238443-64-2.64%
30/11/202025631991354.70%

Peer to Peer

I am left with only 5 peer to peer investments: 1 active peer to peer investment (Crowdestor), and with 100% of the funds in recovery (Mintos and TFGCrowd) and 2 where I am trying to recover some funds trough legal action.

I only show withdrawals here. So far I withdrew about 58% (+3%) of the funds I had invested in peer to peer.

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end dateMoney left to withdraw
Crowdestor30/09/2019297496425/03/202232.41%
Grupeer30/09/201989908990Defaulted. In Legal procedure100.00%
Iuvo Group31/12/2019224004/20200.00%
Kuetzal30/09/201910051005Defaulted. In Legal procedure100.00%
Mintos30/09/2019998285528/02/20248.57%
NeoFinance30/09/20191273004/20200.00%
PeerBerry30/09/20192548005/09/20220.00%
TFGCrowd30/09/201914348817/11/20206.14%
Total30/09/2019284301190205/09/202241.86%

CrowdEstor

  • I was able to cut my investment in CrowdEstor in half thanks to the secondary market and is now at 907 EUR (-902 EUR). Unfortunately I fear the projects I have left will be harder to sell. Most of them have delayed payments and for some I don’t have any confidence at all I will be able to recover some of the money. I will keep trying to list them on the secondary market though!

Grupeer & Kuetzal

Nothing new to report this month, just letting legal action take its course.

Mintos

Good news and bad news. The good news is that Mintos finally agreed with Capital Service on a payment plan. The bad news is that it is spread out over 3 years, and the large majority of the money would come only at the end as a bulk payment, from what I could tell on the payment plan it would be like 80% at the end. I have about 600 EUR in Capital service, so the good news is I won’t need to default this at this point.

TFGCrowd

I still have 88 EUR in TFGCrowd because of a failed project. The buy back did not kick in this month like planned, instead they did “partial payments”, about 6 EUR. At this rate it would be another 2 years to fully repay the investment. I expressed my unhappiness at TFGCrowd but with not much luck. I assume my project will not be the only project that suffers from this. Are the curtains starting to fall?

The only good point? I am already profitable at TFGCrowd!

Startups

I still have now 3200 EUR in startups invested, I have every intention to withdraw this whenever possible. Someone mailed me asking me why I was withdrawing here, the main reason is the lack of liquidity. The money you invest is often stuck for 8 years with no secondary market and I need more liquidity on my money.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds7999
First job Pension plan1467
Second job Pension plan592
Third job Pension plan12084

Wins / losses this month

  • My ETF Portfolio made a 3700 EUR profit!
  • I managed to pull out another 900 EUR out of peer to peer!

What is next?

  • I will need to focus on getting my domain rating back up the next few months. I did start to get quite a bit of traffic from google so I am not happy if that drops out. I hope it will just take me a few months to get it back to the same DR it was before, and hopefully even higher!

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!

Financial Independence · investing

October 2020 Portfolio update: 2nd wave is giving a blow to the markets

Investment update in September 2020

With countries all over Europe taking measures to slow down the second wave markets are not responding well. While the drop is nowhere near the first wave right now, we can clearly see the first drop since the first wave passed. There is not much to do about it in the short run except to wait it out.

On peer to peer investments Crowdestor has opened a secondary market, that hopefully will speed up my exit. More about Crowdestor bellow.

Also Belgium has imposed another lockdown. Lots of sports I did are now no longer allowed. That includes swimming, fitness, spinning and tennis. On top of that bars, restaurants and all non-essential shops are closed. Not to mention cultural venues, fun parks and zoos also should remain closed. What hasn’t happened yet is a lockdown where we are limited in our movement. Belgium has the 2nd highest number of intensive care beds per head of the population in Europe and even our hospitals are getting overrun. I am just wondering how other countries do this without going into lockdown. One thing I am worried about is all the debt we are taking up. One day we will need to pay those back with taxes.

I can still mountainbike and run fortunately., but its not easy to fill the time. You can see people hamster again in the supermarkets, something that I will not be doing. I need fresh food and can’t survive a month on canned food. Hamstering is an automatic reaction people have when they see empty shelves. Then they automatically want to buy more. To be honest if I lived in a house with enough storage space I would have already had some supply of long lasting food, but on an apartment its not worth it for me to use up space to store food.

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

Image result for I am not a financial advisor

My Portfolio

My Portfolio has dropped to 67009 EUR (-1260) even though I invested an additional 1000 EUR, so it just shows how big the drop was this month.

Lets look into more detail for each of these investment types shall we.

ETFs

The stock market continues to drop giving me a total loss of -2227 EUR since I started with the bellow stocks (January this year).

Inception DateTotal PortfolioMonthly P&LTotal P&L
SPDR MSCI World UCITS ETF (SWRD)31/01/202036483-983-2120
IShares Core MSCI EM IMI UCITS ETF (CEMU)28/02/20202346-42-107
Total ETF Portfolio30/09/201938829-1025-2227

At this point I am really happy I limited my portfolio to just two ETFs, it makes it so much easier to track! And I keep finding it very easy to invest with DEGIRO, I am really happy I chose DEGIRO as broker!

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made a drop this month unfortunately putting me at a loss of -5.49% since inception.

SPDR MSCI WORLD UCITSTotal PortfolioMonthly P&LTotal P&L
31/01/202025160.4100
28/02/202023674-3852-3852
03/31/202022851-3362-7214
30/04/2020290343627-3587
31/05/202029590556-3031
30/06/202031411-95-3126
31/07/202033825816-2310
31/08/2020355741749-561
30/09/202036924-576-1137
31/10/202036483-983-2120

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

With a 42 EUR win this month this ETF actually went up slightly

ISHARES CORE MSCI Emerging Markets IMI UCITS ETFTotal PortfolioMonthly ProfitTotal P&L% gain/loss
31/01/2020244800
29/02/20202249-205-205
31/03/20201918.38-331-536
31/04/20202099182-354
31/05/20202064-36-390
30/06/20202211147-243
31/07/20202318113-130
31/08/2020238265-65-2.69%
30/09/20202346-42-107-4.17%
31/10/2020238443-64-2.64%

Peer to Peer

I am left with only 5 peer to peer investments: 2 active peer to peer investments (Crowdestor and TFGCrowd), 1 with 100% of the funds in recovery (Mintos) and 2 where I am trying to recover some funds trough legal action.

I only show withdrawals here. So far I withdrew about 55% (+6%) of the funds I had invested in peer to peer.

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end dateMoney left to withdraw
Crowdestor30/09/20192974180925/03/202260.83%
Grupeer30/09/201989908990Defaulted. In Legal procedure100.00%
Iuvo Group31/12/2019224004/20200.00%
Kuetzal30/09/201910051005Defaulted. In Legal procedure100.00%
Mintos30/09/2019998285501/06/20218.57%
NeoFinance30/09/20191273004/20200.00%
PeerBerry30/09/20192548005/09/20220.00%
TFGCrowd30/09/201914348817/09/20206.14%
Total30/09/2019284301274705/09/202244.84%

CrowdEstor

  • Crowestor has more and more delays this month. I normally had 3 projects that had to pay principal this month and none of them came trough.
  • The good news for me is that a secondary market was introduced. I put my projects on the market at 5-10% discount and was lucky enough to sell a little over 30% of my investments so far. I will keep trying to sell more, but projects that are 90 days late are hard to sell of course.

Grupeer

No progress at all from Grupeers side this month. Grupeer created a recovery firm but it seems after one month the bank account of this respectable recovery firm is not yet approved.

My main method to recover funds is legal action. I can say that its moving but very slowly. There is updates but I am not allowed to post them unfortunately.

Kuetzal

I am in a legal procedure with Kuetzal and cannot comment on any non-public information, I wanted to share more this month but I still can’t. I am currently counting on it that I can recover at least 50%.

Mintos

Mintos now allows you to see where they money in recovery is stuck. To my surprise about 200 EUR was also stuck in Monego. The rest is stuck in Capital Service. No progress here unfortunately. To be honest I am strongly considering to write off this investment. While I think I can recover the 200 EUR in Monego, I am not sure at all about Capital Service.

TFGCrowd

I still have 88 EUR in TFGCrowd because of a failed project. Normally the buy back should kick in this month and I should be getting the money back.

Startups

I still have now 3200 EUR in startups invested, I have every intention to withdraw this whenever possible.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds7999
First job Pension plan1467
Second job Pension plan592
Third job Pension plan12084

Wins / losses this month

  • My ETF Portfolio made a small 1000 EUR loss.
  • Slowly but certainly I am moving out of peer to peer
  • All the triathlons I wanted to participate in got canceled 😦 I need to move this goal to next year.

What is next?

  • My secret project is still ongoing

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!