Category: Strategy

History in the making

History in the making

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As if we didn’t have enough troubles already, today added another nail to the coffin of the bleeding stock market. OPEC and Russia couldn’t agree to cut down on the oil production (to keep the oil price steady), and as a result of the decreased demand (hello, Corona virus), the oil price plummeted. And the stocks followed. 

As a result the S&P 500 is now trading below $2800 (currently at $2750 at the time of writing – down more than 7% for the day!). This means that the massive earnings of 2019 (30%+ for the S&P 500) has now been wiped out in less than 3 weeks. Ouch…

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Make a plan and stick to it! (Or change it?!)

Make a plan and stick to it! (Or change it?!)

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In my Goals for 2020 I outlined my plan to boost my Total Balance in 2020, by diverting funds from my mortgage payments towards my Total Balance (investment account) instead.

Unfortunately, “The Universe” had another plan.

Sometimes it’s simply easier to “take the path of least resistance” (go with the flow?), than to “fight the system”.

In this case there were several reasons that ultimately made me change my mind, about using my mortgage as leverage to boost my Total Balance (and ultimately speed up the pace of making new investments). Allow me to explain:

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If it sounds too good to be true

If it sounds too good to be true

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It probably is (too good to be true)…

In case you missed the latest development in the Baltic crowdlending industry, let me give you a quick recap;

Two of my (previously) best performing platforms have turned out to be fraudulent (nothing is proven yet, but I think the writing on the wall is pretty clear).

In December it became apparent that Kuetzal was more than a little dodgy around the edges – and last week another bombshell dropped, when it became apparent that Envestio was also in fact a highly dubious operation. I am reluctant to use words like “scam” and “ponzi scheme” (oops, I just did) about Kuetzal and Envestio, as nothing has been proven yet. Although, in the case of Kuetzal it seems that the majority of their projects simply did not exist, and thus it would not be in-appropriate to use the word “SCAM” to describe Kuetzal…

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The goals for 2020

The goals for 2020

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A year has gone by in what seems almost as a blink of an eye.

As per usual (I love saying that – this is only my 2nd goals-post ever), it’s thus time to look ahead into the coming year(s), and see what might be in store for the Total Balance household.

Last year I set myself a goal to reach a certain target Total Balance at the end of the year. I did this to adhere to my 13-year (lean)FIRE plan, to reach my Total Balance goal within those 13 years (preferably sooner). As I revealed in my latest Monthly update I managed to reach my yearly target – just barely 😉

As I crunched the numbers after my first year of blogging in September, it quickly became apparent that the current plan relies heavily on the income from Property #1, which is not due to start arriving until year 2023 (October 2023). As this is more than 3 years away, it’s clear that if I want to reach my goal sooner than currently projected (which I do), I’m gonna have to up my game! (Like get Property #2 on the roster – quickly)…

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Boy, was I wrong!

Boy, was I wrong!

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2019 is drawing to a close, and as is the norm on the Total Balance blog (easy now hot shot, this is only the first full year of blogging!) it’s thus time to take a gander back at this years major events – good or bad!

My wife asked me yesterday, if I had a “highlight reel” ready for the year of 2019. I didn’t/don’t. I actually had to read through some of my old posts, just to remember WTF had actually happened this year – this is EXACTLY why I started blogging; To help me remember shit!

I fell over a post from December 2018 in which I highlight 3 events/problems that had occurred to me/us (because all bad things come in 3’s?!), and it dawned on me that all 3 “problems” actually resolved itself since! This just goes to show you that sometimes the best action you can take, is NO action!

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Crunching the numbers of Year One

Crunching the numbers of Year One

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Since I’ve now been on the path to FI for more than a year (and recently wrote a somewhat philosophical rant about my first year on FIRE) I thought I’d spend some more words, looking into how the numbers have progressed during that first year. I (somehow) managed to grow my Total Balance by more than 40%! However, only 2.5% of that came from my investments (primarily crowdlending). That’s a little weak, Nick! You can do better than that!

Well, as always those numbers don’t tell the whole truth, in that I’ve made a big investment, which doesn’t pay out until the year 2023. I also have a substantial investment with Bulkestate, which doesn’t pay monthly interests, so there’s a bit of a “backlog” here, waiting to be paid out in Q4-2019. I also made a small investment with Brickshare, which is not scheduled to pay dividends until Q1-2020.

BUT, if we look at my property #1 investment and imagine that instead of a big payout in 2023 (which is currently the schedule) I’d get smaller installment payments from year 2020, the numbers certainly paint a different picture!

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Why to use multiple banks and payment services

Why to use multiple banks and payment services

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According to a study, recently conducted by the independent danish bank advisor mybanker.dk, only 48% of the danish population is a customer in more than one bank. Historically, the danish bank customers are very loyal too. 60% of them have been a customer in their current bank, for more than 10 years.

It probably comes as no surprise to my readers that I’m not part of those 60%. I have accounts in 5 different banks (6 if you count Revolut as a bank), and I regularly switch bank (according to my wife, I switch bank as often as I switch my underwear and my job. That’s not entirely accurate, but it’s close! 😛 ).

When I told my sister-in-law about this, she immediately asked the obvious question: BUT WHY?! (she obviously only has 1 bank, and she’s been with that bank for more than 10 years)

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To Stooze or not to Stooze

To Stooze or not to Stooze

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I know what you’re thinking; WTF is a Stooze!?

I’d never heard the term before either, until I started researching a nifty little trick (that I’ve been using for a while), in order to deploy “free leverage” that I used to purchase Property #1.

It turned out that the little trick had a name: Stoozing.

So, what is Stoozing then, Nick?

Stoozing: The act of taking out credit at 0% (or a low rate) and putting the money into a high interest savings account to profit from the difference in rates.

Hm. That sounds simple enough…

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Why I invest (heavily) in properties

Why I invest (heavily) in properties

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Faithful followers of the Total Balance blog will know that I mainly invest in properties. I recently sunk the better part of my nest egg into a single property. It is not uncommon in the FI community to invest in properties, but most FI bloggers that I follow, tend to be more invested in stocks and bonds (and crowdlending).

The reason to favor stocks, over any other asset class is quite simple: The admission ticket to this asset class is very cheap. It is also a very liquid asset class, meaning that you can “withdraw” your money from the stock market within minutes (provided that someone out there is willing to buy your shares).

Having this amount of liquidity comes at a price though; volatility. One single tweet from you-know-who, and the worlds stock markets plummet.

Having learned from past mistakes (I owned a few stocks prior to the previous financial crisis), when I decided to re-enter the investment-sphere last year, I was pretty determined, not to repeat those past mistakes.

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Time to up the ante!

Time to up the ante!

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Less than 3 months have passed of 2019, and already I feel it’s time…

– It’s time to step up my game!

When it became apparent to me last month that the rules of the passive real estate investment game in Denmark appeared to have changed, I decided it was time to throw a little more FIRE-wood on the bonfire (get it?). I had been sitting on more than €50.000 ($61.500), waiting to invest it in a real estate project (rental property) with a Danish developer (I’d like to buy 10% of a condominium).

Unfortunately, due to regulation “changes”, it’s no longer possible to participate in such development projects, unless you have at least €100.000 to put into the project (I have yet to learn the reason for having such a high minimum). I was kind of planning to start out with HALF that – so since I don’t have €100.000 (yet), my real estate investment plans took a hard hit. It would take me at least two years to accumulate that amount of money.

So, what is a guy then to do?!

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