It has been 500 days since I left my corporate career and a very generous pay check behind – you can read about my story here. Today I would like to share with you what I have been up to during these 500 days, and what my daily spend actually looks like, ever since I’ve left the corporate workforce. I couldn’t believe how much off the mark I was with my initial budget estimates for monthly spend and what I learnt. I discovered that I can have a great life on half of what I estimated and I travelled way more than I expected – crossing the borders to foreign countries 42 times!! I also learnt that not working a corporate job comes with a lot of savings: Things became a lot cheaper once you have time to shop for a deal, prioritise what you truly need and not having to pay to be work necessities such as work clothes, transportation to and from work, etc.
Before I plunged into my new life, I was quite concerned about how much money I would need moving from Singapore to Poland to set up my real estate passive income stream and do the travel I wanted. At that time I had only one apartment rented out, providing me with USD 560 per month which equated to a whopping 97% pay cut – ouch! I clearly needed to start budgeting for the first time as I wasn’t used to this level of income. I left myself a USD 100k personal spending buffer and spent most of my savings on Polish real estate, consciously going against lots of advice to not put all my savings into one basket. The opportunity, in my own assessment, was simply too good not to be taken advantage of. Over 50% of apartments in Poland were bought outright for cash and the growth potential of Poland is impressive comparing to developed countries (2017 the GDP grew by 4.7% and 2018Q1 showed a >5% growth putting it amongst the five fastest growing economies globally). I also believed that Katowice, a second tier city was heavily undervalued compared to the more known Cracows and Warsaws and at the same time it attracted it unfair share of international investments transforming into a blooming services economy. It did pay off big time, and I actually bought another apartment last December when I realised I wouldn’t need such a huge safety buffer nor were my living costs anywhere near my initial conservative estimations of 4,000USD per month. I managed to work hard for about two weeks a month on my renovations, at peak times I managed 4 apartment renovations at the same time, and travel the remaining two weeks in the month. I did so for 10 months spending great quality time with my family in Poland and my girlfriend in London. I visited Greece, Scotland (2x), Ireland, Wales, England 16x (my girlfriend lives there), Malta, Portugal, Ukraine, Spain (2x), France, Germany (6x), Czech Republic (3x). If this European travel wasn’t enough yet I spent two weeks learning how to kite-surf in Thailand, another 3 weeks visiting my friends and former colleagues in Singapore, and three months in Indonesia training and studying to become a Dive Instructor. I did all that having a base apartment in Poland which I later realised I don’t really need that much so I rented it out in March this year, too, increasing my net income even further.
I became a huge fan of the Wally App (after trying so many others) to keep track of my spending in various categories and currencies. I set myself a daily budget which is basically calculated as expected monthly income divided by 30 days and tried as well as possible to stick to it. Since I had international expenses and accounts in various currencies I could manage that easily with Wally which supported multi-currencies as compared to many other spend trackers. Furthermore, the app is so simple to use and provides a massive amount of detail into your spending habits. I quickly identified big ticket items, optimised them, and minimised any leakages to my bottom line such as unnecessary subscriptions (i.e. Netflix and choosing phone operators with the most data for the dollar). Wally is an a-grade lifesaver for citizens of the world like me (btw: I do not get paid to promote Wally!).
During the 500 days I grew my income from my real estate investments from 560USD to 3,500USD per month. In the first 500 days I generated 36,342 USD of income from some remaining ex-employer share dividends and a steadily growing rental income versus a 37,428USD spend (roughly USD 2,000 per month, just slightly less than the planned 4,000USD per month). In real terms the last year and half barely scratched my savings compared to what I expected from the set-up year I allowed and budgeted for. I will end up on the far plus by the end of this year and use the surplus to invest into a small start up business which I am building on the side – more on that later.
I had some hefty investment costs this year to support my traveling desires and my personal development regarding photography and diving. Without these one off investment costs I expect my expenses in the coming months to drop significantly to something like 1.3k USD per month – it is such a ‘low’ sum compared to what I had imagined 500 days ago working in my well paid IT job.
When I arrived in Bali in March I had only my Advanced Open Water Diving certificate and to become a qualified Diving Instructor I needed to jump through several hoops – in fact I needed to complete the Rescue Diver, First Aid, Dive Master, and Open Water Scuba Instructor Development Course which alone set me back well over 10,000USD. As a keen photographer I also couldn’t resist buying a underwater housing for my Canon 5D, an iPhone 7 Plus, a Macbook Pro Touch, and a DJI Drone set which set me back another 11,000USD. These are thankfully not everyday expenses and for me personally necessary to continue my personal development and set myself up for life on an island and close to the water and fun people. Effectively now that I am all set up I increased my income with my diving salary living in a place provided by the dive school while my apartments are providing a monthly saving similar to the level I had in my corporate life.
If I look at my overall expenses in more detail I roughly spend 25% on self development, 10% on new businesses which I am in the process of building, 25% on travel, insurance, and entertainment, 25% on restaurants (I don’t cook yet, and my girlfriend really loves those michelin star restaurants), and 15% on housing, clothing, grocery shopping, and other miscellaneous items. I believe this to be a sustainable model. Whenever I hear that people sometimes pay 40-60% of their take home pay on rent or a mortgage it gets me the creeps. Where is the money for self development, where is the travel and entertainment if you box yourself into a crazy situation to pay somebody else half your pay cheque.
In the next 500 days, I expect to significantly grow my monthly passive income and optimise my spending even further, i.e. learning how to cook rather than eating out in restaurants everyday. If all goes well I should be purchasing my next property within a year or so and further increase my passive income. I am also contemplating to go back to work to accelerate my savings for a few years with the goal to purchase a new place in Asia as a second base and to diversify my asset allocation. Let’s see how things pan out, I will keep you posted on my blog.
For Freedom and to Live Your Dreams,
Your Financial Gladiator
About: This Financial Gladiator retired early at age 34 by investing most of his savings in a small real estate portfolio in Eastern Europe. Today he saves approximately 75% of his income while roaming the world and occasionally teaching as a Scuba Instructor on tropical islands. It helps him to keep fit while doing what he loves – teaching, traveling, and scuba diving. He called quits following a successful 13 year career in Information Technology throughout which he saved between 30-40% of his net income annually. Before he quit he positioned himself in a role he suspected was going to be made redundant eventually. The day arrived quickly and he ensured not to leave without a retrenchment package reducing the need to work and save 3 more years. His real estate portfolio draws a return high enough to pay him twice his annual expenses, allowing him to continue to build up his retirement portfolio while enjoying 100% freedom today.
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