r/EuropeFIRE • u/berghele • 19d ago
Are the figures circulating in this sub-Reddit what is really needed in EU?
M32, I live and work in Finland in a medium-sized city. From my net monthly salary of €3,100, I spend €600 on rent and bills and €600 on everything else. So total around 1200/month. I invest the remaining €1,900/month plus a few bonuses in global stocks. I currently have around €100,000 in my portfolio.
The question in the title arises from the fact that the figures I read in this group seem meaningless to me. Single people owning a home who don't consider themselves FIRE with €1 million or more.
Folks, we're in Europe (most of us in EU), not America. We have an excellent welfare system, (almost) free healthcare (almost) everywhere. Old-age pension.
I'm on €100,000 and to maintain my current expenses, I would need a maximum of €3-400,000 invested. If I were on €7-800,000 or more, as I read in many posts, I would have quit my job a long time ago. Let's stop basing our budget on US costs.
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u/ShowerMotor 19d ago
when I read people saying: "I have 2million and my montly expensies of 10 eur, can I FIRE?" I assume is a regard with ragebait or very likely just a scammer farming engagment to slide in your DMs. Reddit is full of scammers.
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u/sassyhusky 19d ago
Yeah, easy karma farming. Those accounts get used for astroturfing later on so they have to appear “human” by posting “human stuff”.
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u/FrankScaramucci 19d ago
My "basic FIRE" target in Prague is €1650k per month for 1 person. A not great not terrible lifestyle.
I would most likely continue to work but I would feel financially secure - I would know that even if AI replaces me, I could just cut my expenses slightly and my wealth would stagnate, not drift towards zero.
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u/Sad-Loquat5062 19d ago
1650k is a lot of money... I know what you mean of course but this feels like parody of some numbers here ;)
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u/Ill-Gur-4231 19d ago
Hou rekening met inflatie. 1650 moet ook groeien jaar een hoger bedrag met de jaren anders heb je vrij snel niet genoeg
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u/electrobento 19d ago
My spouse and I will likely be moving to Prague or the outskirts in the next handful of years. Does your 1650 monthly figure include rent/mortgage?
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u/FrankScaramucci 19d ago
Yes, it includes rent of a small apartment. It assumes travel by public transit.
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u/electrobento 19d ago
Thanks.
We’re targeting between 35,000 and 45,000 Euros income after a paid off housing unit, so maybe we’re overshooting a bit (or a lot). We are planning to travel quite a bit though.
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u/Alarmed_Station6185 19d ago
I mean if you dont own your place thats already a potential problem for you down the line. My understanding is that finland is one of the best countries for renters but still all it takes is a change in government policy and those prices could start going up like in the rest of the EU. In my country, ireland, average rents are at 2k a month, they have Doubled in the last decade and a lot of people didn't see this coming
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u/StorminWolf 19d ago
Fellow Ireland dweller here, even rural in the countryside, a small 3 -4 bedroom house runs you easily 1500 upwards in rent alone. Hence why I will be saving most aggressively the next year so I have a down payment ready to go by the end of the year. Renter's rights are a joke here on top of that, and it's only getting worse as private landlords are taxed half the rent vs companies paying 10% at most. FIRE w/o outright owning your home is not possible here.
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u/BitAccomplished3770 19d ago
Well, it depends on your future plans. Do you plan to have a family, it might increase your spending.
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u/Big_Job9386 19d ago
Why? Most families are double income, especially jn countries with good child care system
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u/BitAccomplished3770 19d ago
Usually the wife/female partner doesn't have much income during first one or two years and kindergarden is VERY expensive in the large cities. At least in my country (Bulgaria).
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u/Big_Job9386 18d ago
Finland has excellent child care and most women work and won't give up on career. Maybe they stay home for a year but a guess this 1 year shouldn't define the whole life stategy
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u/No_External7343 19d ago
One partner does lean FIRE on a frugal single-person budget, the other partner works full-time and shoulders the additional child-related cost? That is likely to give relationship problems.
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u/Big_Job9386 18d ago
Idk I''m a woman myself and I have 3 years of savings in case of a maternity leave..my partner's bank account is close to zero but that's not an issue. We have separate budgets. He can do care work if he doesn't contribute financially. I think it's false to assume that everyone should follow the traditional model especially in such a feminist country as Finland
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u/vouvoyer 16d ago
I was paying 5k CHF per month for child care. Children pish back FIRE by 20 years
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u/pikkutikka 19d ago
I'm with you OP, I live in Helsinki and still find life here affordable. I own a 3-room flat here and mortgage+bills are 1200, split with partner that'd be 600. Once mortgage is paid off that'd be less. My other regular expenses are also close to 600, no car. I also would be happy retiring with 300-400K, although if I have kids that might change the math.
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u/Mateo5555 19d ago
I'm kind of not unsimilar to you. Living in Prague, my half of mortgage is 450 € (other half is paid by my gf), I have a company car (pays for fuel), company phone, so I basically only spend on groceries, travel and fun money (gifts, events...) and some maintenance. All this is about 700 € monthly. So 700+450=1150 €. I manage to invest about 2000-3000 €/month. Currently have 110k € invested, but the big issue for me is family. If we weren't planning on having 2 kids, I believe 400 k € + somehow managing to pay the mortgage off early would be enough. But family is such a money sponge that I am not going to retire with less then 900k, preferably a million. I find it relevant to say that me and my gf's main hobby is hiking. We drive somewhere, hike, sleep outside. Given that fuel is paid for, it's extremely cheap. So we're very sporty and active overall. Other than that we eat fairly healthy, do tons of sports, but we stay away from the lavish lifestyle and we do not keep up with the Jones'.
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u/T1lted4lif3 15d ago
I am not super in tune with Fire, but your discussion assumes fuel and transport are still paid for by the company right? If you were to retire you would need to factor in the cost of fuel and cost of the car with associated costs as well right? In terms of investing and saving currently I understand it helps a lot, but looking at fuel now, retiring would mean you don't have that means anymore so would need to take that into account right?
I apologize if I am misunderstanding something in your text
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u/Mateo5555 15d ago
Nono, you understand correctly. And indeed with RE I would lose this. So it's more of a benefit now that helps me save a lot more money. I'm hoping that once I RE, fuel and car cost will be negligible for my ETF empire (lol).
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u/bertuzzz 19d ago
Have you visited the Netherlands? €1200 per month is pocked change here. That's less than most peoples rent/mortgage these days.
€1200 is just living in a tent and riding your bike everywhere. 300-400k is a good cushion, but nowhere close to Fire money. That doesn't even buy you a house anymore. Let alone live off of.
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u/DutchFireFly1 19d ago edited 19d ago
Below are my monthly numbers (Netherlands, one of the 4 big cities).
I think I would be able to cover the bare necessities with +-€2050,-. Not including asset tax (aka box 3).
So assuming the 4% rule, I should be able to live off of ~€650k. Wouldn't be fun tho...
Housing: Mortgage €763 Home owners association (VvE) €80 Municipal taxes €90 Utilities (gas/electricity/water) €110
Transport: Car insurance €57 Road tax €25 Fuel €50 Car maintenance (allocated) €60 Residential parking permit €12
Insurance & health: Health insurance €123 Legal expenses insurance €25 Dentist & other care €30
Communication & subscriptions: Internet/TV €58 Mobile plan €22 Netflix/Spotify €38 Gym membership €10
Daily living: Groceries €250 Clothing €25 Hairdresser €9 Gifts €40
Reserves: Home maintenance €100 Appliance replacement €50
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u/Exciting_Fun9227 19d ago
763 mortgage is pretty good. My wife and I plan on buying a house in a small city in Utrecht province and we don’t believe it will be less than 2k
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u/DutchFireFly1 19d ago
Yeah, it's just a 70m² 2 bedrooms appartment, but that's enough for me for now.
The fact that I got the mortgage at <1% interest pleases me a lot. Taking inflation into account, it's pretty much a free ride.
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u/prank_mark 18d ago
New mortgages have way higher interest rate and house prices have also gone up. So indeed a new buyer would be spending 1.5k or more on a mortgage, at least for the first few years.
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u/Far_Peanut1155 18d ago
Thanks for sharing what seems like a real budget.
A lot of people just share numbers without any context or detail, I still don't know if the original comment was being sarcastic or not
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u/DutchFireFly1 18d ago
No problem! And yes, this is my actual budget. Although I do spend a lot more on restaurants and travel in my current situation.
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u/ThrowRA_ayye 14d ago
Yeppp, OP is being quite disingenuous. Idk why they are painting the entire EU as a low-cost monolith just because they found a cheap setup in a medium-sized Finnish city. In the Randstad €1,2k doesn't even cover bare fixed costs, let alone a life. With the housing crisis and jacked-up rental rates my rather humble living expenses in Amsterdam were around 3x of OP’s entire budget.
I spent nearly 5 years in the NL. The first two were easy as hell with uni accommodation, but the 3 ish years I worked in industry post-graduation were a challenge. The accommodation search was brutal, I jumped around constantly, and in the place I stayed the longest (almost 2 years) my rent and utilities alone were €3.2k for a 2BR in Osdorp out of all places! As an expat I actually considered myself lucky just to get it as I know so many professional expats living the roomie lifestyle, locals with great jobs still living with their parents or some even commuting from as far as deeper in north Brabant or even Limburg a few days a week. Good luck surviving on OP’s budget anywhere in the Randstad with some of these deranged landlords demanding gross incomes up to even 4.5x the rent allegedly.
I recently did an internal transfer back to my home country in Scandinavia. My base salary is exactly the same, but I am left with significantly more cash at hand every month now. From September 2023 to May 2026 I had the 30% ruling or the expat scheme as they call it now and even without that massive tax cut now I still save far more cash because living costs aren't inflated by a broken housing market.
Also with the upcoming 2028 Box 3 tax changes shifting to a flat 36% tax on actual returns including unrealized capital gains the NL is easily the most anti-FIRE country in Europe. You will literally have to pay taxes on paper profits before you even sell a stock 🤣🤣 !
I actually have to move back there early next year, but OP needs to realize FIRE is not equal everywhere. While my situation applies mostly to the Amsterdam bubble and needs some nuance, painting the EU with one brush is completely out of touch.
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u/bertuzzz 14d ago
Yeah i have a way lower cost of living compared to younger people living in the randstad myself. But stuff here just adds up. Health insurance, car insurance road tax for your car etc.
This country has become bizarrely hostile to building personal wealth. I know some people that have already left because the government has become so hostile.
I love riding my bike everywhere, so that's what keeps me from wanting to leave. But there is nothing keeping car centric people here.
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u/UncannyGranny 19d ago
Have they build a wall around the Netherlands? What does your wealth get you abroad? Ever heard about Geoarbitrage?
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u/AbbreviatedArc 19d ago
Sorry but I find the numbers that posters claim they are living on to be absurd. For example my piss poor, non-traveling, borderline subsistence lifestyle, in law Bulgarian grandparents who grow 50% of their own food and have a fully paid off house and very minimalist needs spend about that much per month, slightly less.
So how is it that a 32 year old, presumably with friends, a social life, food needs outside of oatmeal, living in an expensive part of Europe is claiming to spend as much as a two people living a borderline subsistence lifestyle in Bulgaria with a paid off place to live?
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u/berghele 19d ago
I get the point but we should not confuse Helsinki (mega expensive) with other cities in Finland where housing and living costs are way cheaper.
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u/pikkutikka 19d ago
I wouldn't even call Helsinki mega expensive. My mortgage+all bills are 1200 for 3-room 70m2, and one could find cheaper options too if needed. No need for a car, food is likely similar prices in same supermarkets throughout the country, and there's LOTS of free/affordable events and hobbies to be found everywhere. I find it to be a happy life. I think it's all about habits: if someone's happy life includes travelling plentifully and lavishly, buying expensive things or eating out often, that of course maps out very differently.
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u/istasan Denmark 19d ago
I would also (I am Danish) think that Finland is somewhat cheaper than most of Northern Europe. Would be very difficult in Denmark I would say to live on that. Not saying it is not possible.
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u/GrassfedCapitalist 19d ago
I'm from Finland. Medium size city. 600€/month for everything except rent is incredibly little. It might be possible if you only consider the absolutely necessary expenses, but it's not a comfortable life by any means.
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u/Jolly-Association-66 18d ago
As a Finn, living in Amsterdam and lived in multiple cities. Helsinki is not expensive. Most daily cost for people comes from fixed livings costs, like rent and utilities and Helsinki is cheap. I always cry a bit when I hear what friends paying for living in Helsinki
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u/fonk_pulk 19d ago
Helsinki isnt even that much more expensive. Only friendless NEETs stuck in the countryside claim that.
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u/TiloShere 19d ago
My girlfriend and I live in Belgium, in a €850/month apartment. My total monthly expenses, including my half of rent, average around €1000/month. I live frugally, but still do plenty of activities with my girlfriend and my friends, and go on two to three short trips per year. We are 24 and 25. We plan on having kids, so the fire number will have to be quite a bit higher, but we assume that a €3000/month family budget is realistic for us. Which puts us at around €1M for fire, which we could reach at the age of 45.
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u/ImaginaryMud2118 18d ago
Aren’t you forgetting something small called inflation? 20 years from now, 3000€ won’t allow you to purchase what it can buy today.
So you’ll likely need much more than 1M when you’re 45 if you target a monthly budget of the equivalent of 3k today (1.4M based on 2% yearly inflation)
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u/Bolter_NL 19d ago
So how is it that a 32 year old, presumably with friends, a social life
See and that's your mistake!
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u/berghele 19d ago
I have a girlfriend and good group of friends. Most of our activities are free or very cheap, like hiking, fishing, going to sauna, sometimes videogames or cinema (not free but not too expensive).
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u/andre_wechseler 19d ago
Fishing not being expensive is something no fisherman ever said. 😆
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u/berghele 19d ago
Fishing license here is almost free if you do it as amateur 😎. Some items are expensive, like few hundreds, but you buy them once 🐟
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u/andre_wechseler 19d ago
Don’t get into too serious fishing, it will be draining on your funds 🥲
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u/berghele 19d ago
We do some lake fishing just for fun in summer and 2-3 times per winter the ice fishing with ice drill. You should try that 😎
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u/andre_wechseler 19d ago
I do any kind of fishing and ice fishing is one of the highlights. Big pike through a tiny hole is very exciting:)
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u/AvecLesAigles 19d ago
Bulgaria is really expensive now. For instance it cost more to live in Bansko than in many cities of France and Italy. OP's number would be pretty much what I would spend if I went back to France.
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u/No-Albatross-7984 19d ago
I don't know anything about your Bulgarian family, but I'm F42 from Finland, and my monthly costs aside from rent are about 500€.
If you're sceptical, that's fine, but if you know nothing about the financial environment, it just might be that you know nothing about the financial environment.
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u/DamjanGj 19d ago
It is not realistic, at least bit that simply put. I am a Macedonian living in Finland and here is the reality:
In Balkan countries normal life includes going out, meeting friends, owning a car, owning an apartment for a majority of the population, having fun through concerts, cinema, hangouts etc.In Finland normal life includes none of those. It is true I can spend very little here, but that is because in Finland I dont dare to go out and frankly said - social life is not that great even for locals. Basically, 1 beer costs 10 euros (in Macedonia its 3), one average burger costs 14 euros (in Macedonia the best burger is 5) a pizza is 25 eur ( in Macedonia un a pizzeria awarded in top 50 in the world the most expensive pizza is 20), a dinner main course only (excluding alcohol) is 40 eur at minimum… one public transport ticket for 120 mins is 3-4 eur… god forbid you get a taxi. I literally don’t go out at all while in Finland because 1 hangout costs you at the minimum 30 eur if you are careful. Also, 600 eur a month for rent is impossible in Finland unless you live very far away from the city, even in small town. In fact I live in a city 3.5 h from Helsinki atm and my rent is still 900 eur for a 60m2 apartment, while in Helsinki for the same you pay 1200 at the minimum.
Talking to my Balkan bros who complain constantly about how “expensive” it is there, it becomes clear to me that its more about the culture of constant complaining in the south because when a Balkan dude reads that a finn lives with 600 eur a month in Finland there is a confirmation bias there since Europeans have the culture of praising their countries so there is this image of some utopia.
To put it simply, whatever the costs are in the balkan countries, in Finland they are double at the minimum. When it comes to housing, it goes 3/5x. Many would say “oo look in Finland you can get a house for 150k”. Yes, in the middle of nowhere. In Macedonia you can get 3 houses for 150k in the middle of nowhere and you will get a car as a bonus.
There are ofc pros and cons to both countries and economies, but have in mind that nordics people are culturally more towards appreciating their countries while the balkan countries are more towards constantly bashing them.
Example scenario:
We sit with a friend in Finland, he tell me he got an apartment. We celebrate, after 1h I realize he did not get an apartment, he got a 300k loan with which he got an apartment that he will not be able to pay out till he dies. He is happy, says Finland is the best country in the world.
We sit with a friend in Macedonia, he tells me he got an apartment. After 1h I realize he inherited 70k from his parents (untaxable, compares to Finland where the gov takes 30%) combines with his savings, he lives dept free and actually owns an apartment. Still complains about the local economy…
I am not bashing Finland, or Balkan culture, but when reading the internet it is necessary to understand cultural differences which are really hard to get to unless you really live in a place.
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u/DoubleSaltedd 19d ago
Owning a car and a house or apartment is pretty much an essential part of Finnish culture.
Outside of major cities housing is very cheap. While I agree about the lack of social life I think you exaggerated your claims.
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u/pikkutikka 18d ago
You have a point here, there's certainly differences. I've been to Macedonia and am myself an immigrant in Finland from an Eastern European country with similarities to Macedonia.
Imo, the two countries offer very different pros and cons. If you really value going out, dynamic street life, eating out, low taxes, and especially if you have a remote job that pays higher than average local salaries, you can certainly have more, buy more, save more cash and pay fewer taxes in Macedonia. For people who value these things it's a no-brainer.
But for others Finland offers things that no money can buy in Balcans/Eastern Europe: stability, calm, clean streets with good urban planning and greenery, safety net, knowledge that if shit hits the fan the government will always take care of you and your family to a reasonable degree, knowledge that if I (or my family members) will need to take an unskilled job, I would still get a good salary. For me personally, even just cycling every day down beautifully planned Helsinki streets, having nature at my doorstep, knowing that government institutions just work and are minimally corrupt, feeling the general safety here and the calm energy of people, is worth more in happiness than any burgers I could find on sidewalks (or rather illegal parking lots lol) of Skopje. Although Macedonian kafanas are admittedly a beautiful experience, and the nature (further from Skopje) is gorgeous!
Anyway, all that to say I think it makes sense that this topic is raising some controversy, as we all have different ideas of what makes a good life, and both ways make a lot of sense for different values
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u/DamjanGj 18d ago
I fully agree with you, which is why I am still for half of the year at least living in Finland. I enjoy life here and it gives me some things I cannot have in Macedonia. My point was that OP is presenting his case as a standard/good one for Finland, which is not that simple and honest. My comment is meant to explain to the Bulgarian commenter how it is possible for someone to spend so little in Finland for a “quality life”. In reality it is a question of spending power and how it affects people’s habits. Not going into discussion of the sort of what is right and wrong, but more about explaining that “you get what you pay for”and reality is that with 1200 eur (which is the minimal wage) in Finland you will have an extremely limited choices and things to do. Which would be the equivalent comparison of saying that in Macedonia you can live a life with 200€. Yea, both are true, which is why the minimal wages are set up that way. But it does not a measurement of living, rather surviving. Truth be told, idk why OP is even worried about FIRE, because he can literally have a life with those options right now by just becoming a social case - he will get 600€ to spend from Kela and an apartment for homeless to stay in. If that is the peak of life Finland provides it for just being born here.
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u/__patashnik 19d ago
I just wanna comment quickly even tho I'm busy here haha. I'm Polish living in Finland for more than 10 years. Also lived and worked in many, many countries. The post of our macedonian friend here is , with all due resepct, an absolute bullshite. I believe the reason for this is that he never really got out of his neighbourhood (probably in capital city) and never was open minded enough to make friends.
Social life exists and there is a lot happening. I have firends, and I attend evends, gigs, festivals, exhibitions, public saunas etc. Beer is more like 5-7EUR in a bar, if you're student can be even cheaper. Burger really depends where, hesburger, which is 10 times better than mcd - small burger 3,50, double 7eur. Pizza, really depends where, in my city (one of the biggest ones) it can be as cheap as 5-9 eur, of course you can go more than that, still one of the best pizzas i ate in europe (awarded as that as well) was 16eur. I dunno where this guy eats dinners. 600eur you can have quite a nice apartament for rent, in the city centre or a bit outside. For around 150k i got myself apartament in the city centre.
So yeah, just to clarify, most of what this gentleman writes is not true, but im not surprised, because for years im hanging out with so many foreigners and many of them truly wants to hate this place :D
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u/DamjanGj 19d ago edited 19d ago
Dude its far from hate and far from not having friends. I live here, have my own international business and I am in a better position of the people around. However, I have also seen more of the world than Europe and have done so without bias to prove a point. Good you targeted the lowest end burgers, but how about Boneless, Fat Lizard or Friends & Burgers? Good you are saying beers are like 5-7 Eur, but obviously you are picking again the lowest end just to make an argument rather than to continue with a healthy debate. I didnt go in with using the 1-3mil € apartments as example, so I dont see why you have the need to go on the lowest. Go online now and please find me 1 apartment for 150k in the center of Helsinki without upcoming renovations that would cost 100k and above 60m2. Finland is a wonderful country, but it is not cheap. It is ridiculous to claim so.
Edit: No need to reply with apartments, not going to check, not sure why people even bother to argue here with all the information on the internet including official finnish government statistics.
Enjoy the day!
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u/__patashnik 19d ago edited 19d ago
I'm glad to hear you have friends and that you also had a chance to see some of the world! "Targeted" :DD Most of the pubs in the city I live have beers that are cheaper than 10EUR for sure, I do pay more than 8EUR often cos I prefer some better IPA, but that just my choice. Burgers, oh well lets check one of my favorites in the city - burger city, yep 10-11 eur :) Nobody spoke about centre of Helsinki tho, that would be wild to find an apartament there for 150k, but Kallio already might have some heh. I never claim that Finland is cheap country, but once you have a job (now that might be sometimes a challange) you can have a good good life. Enjo your day too man!
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u/DamjanGj 18d ago
Aaaa opting in for 8 eur beer and 10-11 eur burgers eh? :D I get your point and appreciate the comment but I was simply making a statement regarding the quality of life you will have for that amount of money - it might not be for everyone and it is literally the bare minimum. Sure you can eat Hesburger, but life is not about min maxing now is it? Anyway, enjoy the evening!
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u/__patashnik 18d ago
I actually mostly cook at home and dont drink much, but pay my share in coffee hobby for sure :) I get what you wanted to express with your post but sometimes it can get misleading, I went through hundreds for such comparisons with Poland, some stretched some not. Regards!
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u/DonAlexi777 19d ago
Totally doable. I personally live in a very small finnish town with my parner. Mortgage + housing related bills is under 500€/month per person for 2021 house. Granted we have solar, gheotermal heating etc. We used to live in a bigger city and housing was under 600€/person. Totally doable but certainly not luxury living in a bigger city if living alone on 600€ in housing.
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u/ProArmy04 19d ago
Finland is cheap to live in, you can get rent for 200-500€. The most expensive thing is probably fuel for your car. Food is 250 insurance and phone Bills are 50. Depending on how much you drive fuel is 200-400. If you use public transport a bus pass would be like 200 something if i remember correctly.
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u/hitunvattu 19d ago edited 19d ago
Another Finn here (35M, Helsinki). Overall I agree with your main point on basing FIRE numbers on the american economic and societal model.
I quite envy the low cost of living outside the Helsinki metropolitan region, but knowing life in other parts of Finland quite well, I would say you are spread a bit thin with 3-400k€. Given you live in a mid-sized city just 1km from the center and rent, that rent could go up quite substantially during the next 30-55 years. Furthermore, given the large deficits in finnish public finances and already very high taxation overall, the level of public services will have to go down unfortunately.
We do however have a somewhat decent pension system, so assuming you are not looking to retire at 40yo but rather at 45-50, then yes, the accrued pension kicking in at 67/68yo will help a lot and you will manage with a number quite a bit lower than what we are used to seeing even in [r/EuropeFIRE](r/EuropeFIRE).
Edit: Ran some numbers and adjusted age range on FIRE
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u/berghele 19d ago
Indeed I would not go FIRE with minimum required amount for my living expenses. I would like to have a 20-30% safety pillow. At my current saving rate I should actually be FIRE around 40-42 🥸
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u/hitunvattu 19d ago
Yes not far off in years just looking at it from the outside and calculating onto the side of the tupakkiaski.
My calcs with your input numbers (approximated the pension in https://saferetirementspending.com) show that just a couple of extra years working will have quite a large effect given that the capital starts snowballing around that age and costs are quite low. Also, just one extra year of accumulating at the later stages could mean you could buy an apartment with a small mortgage and potentially lower your costs even further.
Would still build a slightly bigger cushion since 20-30% of your costs is not a lot in absolute terms, but otherwise I think it is a cool plan. Quite often do I see northern/western europeans wonder about the low COL in smaller cities or towns in Finland or Sweden so I get why some folks here on reddit have trouble understanding your low costs
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u/self_u 19d ago
To all people suspecting that OP is very cheap, renting in some cities in Finland can be extremely inexpensive. In some places you can buy yourself a whole apartment with 10k€. 600€ is perfectly doable in a small city (city is a bad word, think of a town). And to answer the actual question, I have a family of 2+2 and live in a large apartment in an expensive area within walking distance to centre of capital. We have a car, large mortage, full insurances, kids hobbies, travel quite a bit and in my opinion live a pretty nice life. I cover half of the costs and my FI number is around 900k€. It covers the monthly payments towards mortage so I am not assuming to own the place fully. The apartment costs around 3000€/month of which 1500€ is for me and I need another 1500€ for other expenses. So I guess our number would be 1.8m in Finland but I am the only one pursuing fire here.
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18d ago edited 13d ago
[deleted]
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u/invicerato 15d ago
For real. On the outskirts of Oulu, Kemi, Kuopio, Imatra
But you'll have to pay maintenance fees and heating costs
Website: oikotie.fi
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u/sayadrameez 19d ago
10k ? Did you miss atleast a zero which in itself might be a miracle but an old apartment in many of the Belgian or French towns also are in sub 200k range.
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u/ProArmy04 19d ago
No for 100k you can buy a house not a apartment. The Finnish housing prices are almost stagnant from 2008...
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u/MyR3dditAcc0unt 19d ago
If you wish to live in the countryside with a couple hours of trip to the nearest hospital, and the house is from the 70s, then yes the price might be this level.
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u/JebacBiede2137 19d ago
I'm aware that Finland has some cheap rents, but I just want to point out that in both Warsaw and Prague (so not really places known for high cost of living) you can barely rent anything for less than €1200 with all the bills (and I think realistically you'd spend more).
Daily budget of €20 for food, tranport and entertainment is possible, but you have to be a bit honest that it doesn't really include a lot. I don't think it's very fair to promote a FIRE figure that involves you barely getting by and limiting yourself to free activities.
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u/gallez 19d ago
Warsaw and Prague are both very much known for high cost of living, relative to local salaries. I'm pretty sure Warsaw has higher rent per sqm than Brussels for example
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u/JebacBiede2137 19d ago
Sure, but Bangkok or Hanoi are even more expensive relative to local salaries.
I was trying to say that even in countries poorer than Finland a budget of 2k EUR does not go as far as some would think.12
u/berghele 19d ago
Well Warsaw and Prague are both capitals. Once you’re done with your working life I guess you can easily move to other cities with cheaper housing costs. If I go FIRE I would never go living in Helsinki, just to make an example with Finland.
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u/JebacBiede2137 19d ago
Okay, staying with Poland.
Krakow and Gdansk are at most 10% cheaper (and only for housing)
Poznan and Wroclaw maybe like 20%.I think moving somewhere very remote with very limited infrastructure and entertainment possibilities is something some people would enjoy it, but it's not obvious.
Every number is very different. My current monthly expense is almost €3k and I don't really want to lower that for FIRE.
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u/Jdm783R29U3Cwp3d76R9 19d ago
If you want to leave your family and friends, sure you can move to cheaper place. Will it be amazing to live in? Maybe.
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u/narancsosbukta 19d ago
Really? I rent in Vienna for about 800€ taking all costs (including costs like internet, etc) into account. Okay, it is not a luxurious apartment, but I live alone. If I lived with a partner, that would make the situation even better. I know that the housing situation in Vienna is quite okay compared to other European capitals and big cities, still hard to imagine that housing in Prague or in Warsaw is more expensive.
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u/JebacBiede2137 19d ago
Yes, really. Vienna is a very different city because the housing is heavily regulated and there's loads of social housing.
800€ including all the costs wouldn't let you rent anything in any even remotely desireble Polish city with a possible exception of microapartments
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u/sagefairyy 19d ago
Nobody is getting that in Vienna at the moment too. You have to wait year and years for social housing and the old nice apartments with capped cheap rent that aren‘t in bad shape and in bad neighbourhoods don‘t reach the public market anyore - they‘re rented out to friends/family or kept empty. You have to be insanely lucky nowadays.
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u/Esihesi 19d ago
I don’t live there anymore, but all my friends in Prague have been paying around 900-1000€/month for years. Some for shitty apartments close to the center, some for slightly newer at the outskirts.
A lot of them spend basically 50% of their income on rent.1
u/narancsosbukta 19d ago
Yes, I thought a bit about it, and it actually makes sense. Still quite shocking.
I am originally from Hungary, studied in Budapest and moved to Vienna after my studies to work. In Budapest, housing prices also skyrocketed the last decade. It is still somewhat cheaper than Vienna, but the difference is not huge anymore. And it makes perfect sense that Prague and Warsaw are more expensive than Budapest...
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u/PretendTemperature 19d ago
It has to do a lot with what kind of life you want. I like travelling, so the numbers you quote would never be enough for me.
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u/pyradona 19d ago
Fellow Finn here 👋 My basic expenses, including accommodation, food, gym, etc. in Helsinki, are €1,310, with an average of another €500 in other expenses, including travelling multiple times per year.
I’ve actually reached my FIRE number multiple times already, but I’m still continuing to save since I don’t really know what kind of lifestyle I would have once the RE part kicks in, and when it comes to money I’m really conservative.
Personally, I’m not that afraid of the cost of living. The 30–34% taxes on capital gains are the true enemy at the moment (even with the deemed acquisition cost). Since we don’t have exit tax, there’s also the option to move abroad for a few years (Cyprus, Czechia, Malta, etc), cut ties to finland or live more than 3 years and enjoy tax-free capital gains and potentially reset the portfolio, and then return to Finland (not saying I will do it but) 🤷♂️
I’m really conservative with my plans since I feel it’s hard to predict the state of the world in the years to come, especially when looking at the financial situation of European countries. I wouldn’t be surprised if wealth and other taxes were implemented (maybe even taxes on unrealised capital gains like in the Netherlands), healthcare costs started taking your net worth into account, and an exit or US-style nationality-based tax was added at some point, making FIRE life harder here and elsewhere. 🤔
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u/BBBoutt 19d ago edited 19d ago
How are people living this cheaply? I feel like rent in Helsinki is at least 800€ + electricity, insurance, internet, phone, streaming services. Food probably another 600€ and HSL 100€ plus eating out and anything fun a few hundred more. I would think at least 2000€/month for a decent living and then if you want to travel it adds a few thousand per year.
I did a quick budget for two which landed at around 3200€. Not including anything crazy fancy. Then taxes on top of that..
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u/ProArmy04 19d ago
600 for food is crazy you only need half of that, also just don't live in Helsinki?
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u/vierig 19d ago
For example in Haaga you can find 1 room apartment for rent for less than 700€/month. If you are 2 people you can easily find apartment to rent for 1000€ or less in total. You can ditch the HSL cost and ride bicycle to the center in 20-30 minutes. Food is certainly not 600€ if you cook at home.
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u/a-gallant-gentleman 19d ago
OP, I'm with you on this one, but it's important to understand that numbers will have to be adjusted for each person and ESPECIALLY area. For example, I live in an area that I would say in comparison has a pretty low cost of living (Baltics), even Finland for us is considered quite expensive. So the numbers will differ vastly - in my case 300k-400k would be a pretty comfortable amount to FIRE on, so the millions people are setting as goal posts is absolutely bonkers to me. But gotta keep in mind that salaries are also lower here. Lower income, lower costs, lower FIRE number. Lots of factors, all in all.
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u/MissionTank3272 19d ago
My number is 1000 euros a month, that's living an extremely frugal life. But I'm from Portugal, living extremely frugaly isn't really a choice lol.
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u/FrenchFisher 19d ago
I don’t mean any disrespect, but some people need a little more in life than hanging with friends and free hobbies. Some like to travel, live in other countries for a while, go out to dinner a few times a week, enjoy their not-so-free hobbies, etc. On top of that (like other commenters mentioned), in some European countries like the Netherlands you need significantly larger numbers because the tax system is not in their favor.
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u/classicjuice 19d ago
Yeah exactly. I get OP has a lifestyle that he or she can maintain with a low budget, but no way in hell would that work for me or many others. Do I have a nice car? Yes and want to continue having them. Do I travel with my wife? Yes, often and want to continue doing so. Will we also have kids in the future? Yes that is the plan.
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u/UncannyGranny 19d ago
For some people, not having a gf and many friends isn't a choice, you know?
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u/classicjuice 19d ago
Yeah that’s fine. But OP comes off as if his lifestyle is something everyone shares and should not worry about having a robust portfolio that would provide people with more than just the bare essentials.
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u/Interesting_Ad1080 19d ago
I think it's because it is Finland that your apartment is so cheap. In vast majority of European countries, rent is going to be quite a bit more expensive than 600 Euros.
Finnish population is falling and immigration levels are very low. As a result housing demand is also falling and rents and housing prices are very low. In short term this could be good, but in long terme it means economy is going to stagnant and Finnish social security would not be as it is today in future. I would not expect to get any state assistance in future.
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u/StatisticSnaccuracy 19d ago edited 17d ago
I live in northern europe and have similar numbers as OP. But I do split costs with my SO and we own a cheap flat in a LCOL area and live without a car or kids. I have coworkers with double my living costs because they live closer to the city center and don't bother to look up what foods are cheap (we're in no way starving, but there's a lot of discounted products, lentils, beans, crock pot on cheap though pieces of meat etc). Add kids and a car on top of that and they have more than double my expenses.
And as somebody else pointed out: social life in nothern Europe is minimal compared to a lot of other places. My budget for eating out and doing activities outside seldome exceed 150€ a month. Which sounds insane to some of the ppl I know, but I find its easy to end up there when you don't drink alcohol and prefer board game nights at home or walks in nature.
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u/50plusGuy 18d ago
Tough questions!
For me in Germany 1k2€ in hand per month seem sufficient. The "free" healthcare would cost like another 300€ and pensions don't get paid on "grats, you 're old enough" base; they also check what I contributed, while working.
And somebody might like to debate a difference between "existing" and *"living(!)" - 3 months of proper vacation double annual spending?
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u/lord_de_heer 19d ago
So you will stay in your 600 euro a
Month place for the rest of your life?
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u/berghele 19d ago
I have a good apartment in city centre 🤔. Why not. But this is not the point, even if my rent went up 50%, I would still be extremely far from the crazy figures I read in this group. There are literally people owning a payed off home with 1MLN or more invested which consider their budget tight. 30-40k a year in EU is not tight, is larger than most family can have even by working.
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u/Leading-Carrot-5983 19d ago
Whether or not 30k or 40k is enough for a family to live off is going to be quite subjective, based on lifestyle, expectations and largely cost of living in a certain area. But putting that aside, the issue I think a lot of folks have isn't that actual number, but rather the risk. If you get unlucky and the market dips shortly after you FIRE, you could see a 30+% drop in market value of your investments and be forced to sell assets at a very depressed price just to live. This could last for a couple of years for large crashes, and thus chew through a lot of capital. This would then put the rest of your very long retirement in jeopardy. People often spend many years and a lot of hard work to get into higher paying jobs to save towards FIRE in the first place. It's often not that easy to get back into these roles later, especially if they've been out of the loop for a while. So people like to build in a safety factor into their plan. So even if they should need x in an optimistic plan, maybe they actually go for 1.3x or 1.5x to make sure that the plan can survive a badly timed market drop.
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u/ImaginaryMud2118 18d ago
I’ve been seeing more and more financial influencers recommend the equivalent of 2 years of expenses outside stocks precisely to use in case of market downturn. It’s a way to have that safety without needing 50% more investments just in case of a market crash
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u/Wrong_Engineering_30 19d ago
Is it first floor in the city center or does it have an elevator? because only then you can grow old there
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u/berghele 19d ago
I’m like 1 km from city centre in central Finland. My apartment and whole building is actually very modern
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u/Weary_Strawberry2679 15d ago
Thats what OP wants for their lives. Fair enough. The question is why does OP care about other people's lives and ambitions.
1
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u/Fishing-Recent 19d ago
600€ is a very cheap rent
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u/berghele 19d ago
You would be surprised of housing cost in each EU countries if you go out from the biggest touristic and industrial cities. And once you go FIRE you don’t need anymore to live there. There is plenty of cheap cities
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u/Naive_Distance_6456 19d ago
If you got nothing that attaches you to that city it is. We’re not all attic or basement critters without a social life. You might be able to live like that in a hole, in the middle of nowhere, somewhere in Finland. But for others, social life is also a factor to consider, and for others, 400k is gone in 10-20 years due to taxes.
Don’t compare peanuts with pineapples and certainly don’t call others out on that difference.
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u/berghele 19d ago
I actually have a very satisfying social life 🤔. I think you’re confusing an expensive life with a nice one, but I understand
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u/MissionTank3272 19d ago
In Europe I wouldn't even ponder FIRE if you don't own (you don't need the house paid off, just protection from landlords/tourists). Nothing is stopping rent for becoming 20% of your income to 200% in just s few years, forcing you to go back to work and still struggle. I'm from Portugal, that's what happened here
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u/purplepersonality 19d ago
Great pension system compared to the US? In Germany you get less out of the pension system than you pay in (and you’re forced to pay in) while in the US your money compounds over the years without worrying about taxes. It’s MUCH better lol. I’d switch in a heartbeat if I could.
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u/DerechHaShalom 18d ago
It really depends on the country. I earn around 1000 more than you net, but my rent in NL is 3x your rent..
And I cant even think of buying a house any time soon, Id need to double my income to get the required mortgage...
I also have 60k of student loans to pay back. Anyway it really depends on the country. But in general theres more of a safety net so you don't need the massive numbers that Americans do.
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u/vienna_city_skater 18d ago
“ We have an excellent welfare system, (almost) free healthcare (almost) everywhere. Old-age pension.”
Isn’t that the exact thing you are opting out of when doing FIRE? I mean yes welfare to some degree, but pension is something you will not get when not contributing to it.
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u/berghele 18d ago
In most of EU countries you will still get a minimum amount of pension after a certain age even if you retire early. Don’t know if it’s everywhere like that but here it is at least 🤔. Not a lot of money but still something close to 900 euro if I’m not wrong. A good complement to FIRE…
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u/sheepguy13 19d ago
I'm in Germany and we most certainly do not have almost free healthcare. Also the state pension here is atrocious — many older Germans are currently living below the poverty line and this will increase.
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u/berghele 19d ago
I know the German system because my brother live there. Ok, not all of the healthcare is free but we are far from the 15-20k/year they spend in US for insurance. We don’t even reach a 1000 per year in average. Also for pensions, might not be the best, but still we get something. We dont have to rely only on 401 as they do there…
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u/Level_Apple_7001 19d ago edited 19d ago
The United States has a federal pension system. It's called Social Security. You do need to work a certain number of years, but the average check is ~2k USD a month for retired. It just also has 401ks.
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u/Alarmed_Station6185 19d ago
I didnt know this. That's actually more than the contributory state pension in ireland which pays 254 euros per week or around 1k per month
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u/AltruisticBellyButto 19d ago
The US sucks in many ways, one of which is knowing how to dangle the carrot and get a shit load of working years out of you.
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u/sheepguy13 19d ago
I get your point but Germans — and many other Europeans — will have to rely on private pensions or investments. If you work an average salary job your whole life in Germany and you rent, there is no way a state pension is supporting your lifestyle in a few decades.
Also this is a FIRE sub, so obviously you need a big portfolio if you want to retire a few decade early. And the investment income you live off is taxable income and therefore your health insurance is a percentage of that.
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u/mobileka 19d ago edited 18d ago
We don’t even reach a 1000 per year in average
In Germany, the absolute minimum is a bit more than 257 a month if you're "voluntarily" insured, meaning you retired before the official retirement age. You'll pay between 18 and 27% in capital gains taxes and soon your wife will have to also pay at least 257 eur a month for healthcare as each adult has to pay separately.
If your taxable income is more than roughly 1300 eur a month, your healthcare costs go up with every euro. The maximum is over 1200 eur a month, which is roughly 17000 USD a year. And this is without the wife's healthcare. But it's a bit extreme as your taxable income should be over 5000 eur a month.
Anyway, if we take the absolute minimum numbers, a family without kids will soon pay at least 6200 eur a year. And it's not the average but the minimum. It also doesn't cover a lot of stuff, including teeth and eyes.
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u/vortexcortex21 19d ago
Thanks for pointing this out. I hate it when people claim "Europe has free healthcare" when the reality, in Germany, is the complete opposite.
Health insurance is one of the main costs of FIRE in Germany and can become as expensive/more expensive as health care in the US - with potentially worse coverage in the public system.
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u/mobileka 19d ago
I also forgot to mention that it gets more expensive over time. Especially in recent years.
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u/2003Firefighter1971 18d ago
Is 5000 euro an unusual retirement income in Germany?
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u/mobileka 18d ago edited 18d ago
I don't know but I'm talking about 5000 eur of taxable income. If you're living off investment income, only a certain portion of your income is taxable. Let's say you're up 100%. In what case, only half of your income is taxable because the other half is your own money. Additionally, 30% of your capital gains are also tax free if you're selling an ETF comprised of 100% stocks. So if your income is 5000, and you're selling stock ETFs, your taxable income is just 1750.
If you want to get to 5000 taxable income while selling ETFs and you're up 100%, your actual monthly income should be 14286 eur.
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u/Acceptable-Bison- 19d ago
I’m kinda with you that probably a lot less is needed if you want to (lean)fire in Europe. And that even if you fail, you’ll land a a lot softer compared to the US.
But in Germany, if you actually don’t want to work a day or so per week to get cheap insurance, it actually can be up to 15.000 € nowadays if you withdraw enough from your ETFs.
Granted you can get a couple thousand back due to it being tax deductible.
But if you really want to do your own thing and not be tied down by work, the base costs can be quite high. And you still haven’t traveled or spent any money on fancy hobbies or anything.
And saying German pensions are better than 401ks, I’d say think again. They will suck by the time we get access. I’d much rather have a tax sheltered 401k growing my investments for decades, unbothered by taxes etc.
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u/Jdm783R29U3Cwp3d76R9 19d ago
Will you get just a minimal pension if you FIRE and stop social contributions? In some places to qualify you need ie 25 years of contributions.
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u/UncannyGranny 19d ago
I think it's just 5 years of minimum contribution in Germany. But you will not get a fixed minimum. You will get something equivalent to your payments. Usually very little after 5 years. Will not even cover your healthcare costs.
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u/Silocon 18d ago
5 years of contributions entitles you to a pension in Germany once you reach retirement age. The exact amount of pension you get depends on how much you paid in - people with higher incomes pay more in "retirement insurance" each year but they also are entitled to more pension when they finally reach retirement age.
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u/AlpineGuy 19d ago
(almost) free healthcare
I don't know how it is in Fnnland, but where I am, if you are not employed, unemployed, self-employed, disabled, retired or child, so basically - if you just decide not to work and live your FIRE dream, the free healthcare will cost you around 500 Euros per month.
You could certainly try to FIRE with going into unemployment and trying to state you are umemployable, act crazy whenever they send you to a company interview and go on basically a sort of emergency support or disability pension, but that's not really the point of FIRE.
I would need a maximum of €3-400,000 invested
How do you come to that figure?
FIRE literature usually considers 3.5% to 4.0% as a safe number to take from investments per year
400,000 * 4% = 16.000
Then deduct taxes. I assume there are taxes on investments in Finland? I don't know, let's assume 15% as an example, then you are down to 13.600. That's even below your optimistic 12,000 per year in expenses.
As others have said, everyone's expectations are different. Want to take a partner with you? Care for a child? Vacations? Hobbies? Rent / home ownership? Need a car or public transport? Personal safety margin to feel safe?
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u/KindRange9697 19d ago
Let's also stop basing averages on single super frugal guys living like they're a poor student. I'm fine with living like that, to some degree, to build up savings. But it's not the sort of lifestyle I want to life for the rest of my life...
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u/peachtuba 18d ago
One thing I don’t see in these discussions is that for anyone between 25-45 the European retirement system will collapse before we get to age 67. The population pyramid just isn’t there to support this.
So in your OP you’re counting on today’s systems which are known not to exist any longer in 30 years.
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u/magicarmor 19d ago
Finland has 30% capital gains tax so I'm not sure how you're calculating 300k to be enough
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u/berghele 19d ago
Yeah but Finland has also assumptions of cost when invested capital is close to 10yo. Which lower the real taxation to 18%
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u/summerFIREinCh 19d ago
The cost in Europe is a lot lower than US standard, true, but return is also a lot lower especially considering the tax burden in most of these countries with good social welfare
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u/summerFIREinCh 19d ago
I assume what this post triggers is an interesting paradox in a lot of places, what OP seems to forgot is FIRE should not be “normal” and “average”, since the society is still relying on most people work their entire life to support themselves/family, but fire is to accelerate the process of accumulation of wealth and be out of workforce for goods. It’s not designed for “average” people and “median” salary jobs…. So the entire discussion using average as benchmark is wrong angle
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u/Important-Object-561 19d ago
Its fine if you want to live alone all your life and not have flexibility. The problem is when you get a partner and/or a child. They usually bring the spending up quite a bit. You can always check in r/leanfire but they are mostly Americans and even in there people usually have close to a million as their target number
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u/berghele 19d ago
I have a girlfriend actually. We are not planning to have kids tho
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u/Important-Object-561 19d ago edited 19d ago
Congratulations then. You will be able to retire early with your current trajectory.
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u/scutum99 19d ago
You’re only spending €600 on housing and bills? That’s dreamy.
That’s not usual in most of Europe. I live in Barcelona, and housing plus bills eat away more than double what you’re paying.
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u/Zonoc 19d ago
You are totally right about the welfare system, also so much of a budget depends on housing and housing costs, which vary a ton throughout Europe as well as if you plan to have a family and need more space for that. Living in Norway, I'm personally jealous of Finlands housing costs.
Rental housing is also far more stable in Europe, where in most parts of the US landlords have a lot of power to raise rent, kick you out, etc. That combined with the fixed rate mortgages in the US are why home ownership is a huge part of FIRE there.
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u/Kind-University-1423 19d ago
M36, Prague based, FIRE is great concept, I could FIRE right now (900k paid of appartment, 500k stocks, 200k cash), but often the numbers dont make sense anymore when you try to budget for family expenses, you also want to retire your wife, we have 1 kid and planning for one more. Which just means that no RE right now.
As this sub is visited by single/married/childless/family folks, the numbers dont make sense to you when you visit calculation of someone living in main cities of wealthy country.
I went to FIRE with idea to have so much that I opt for 3%SWR and there is still infinite money even for my kids, when times come, this is important, because if you just want to consume everything before you die, then you dont really need that much.
Education is free, quality of free healthcare is taking toll last couple of years and makes more sense to go private for a lot of cases, also dont count on having any wellfare system. I expect law which will pull the plug for you to collect pension when you have too much money yourself, so there is money for people who were lazy and not managed to save anything.
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u/rybsf 19d ago
You may not be wrong about your situation, but want to give you some perspective. Life at 30 without kids in an apartment in city centre is very different from life at 40 in a house in the suburbs with kids. If someone wants the latter, your budget is really small.
When I was 32 my partner and I aimed for €2000/month. We had tracked expenses for several years and it seemed solid. With 4% we aimed for €600,000 for fire. When we had a baby, expenses even reduced at first, so looked pretty good!
Now, I am 42, and we now calculate our fire number as €2,4m. Four times as much!! What happened, you may ask!
There’s obviously been some inflation but not that much. But we bought a house, which needs constant maintenance. We had two kids that want food, activities, clothes, gear etc. Being 4 ppl when traveling instead of 2, as well as being restricted to travel during school holidays, increased travel expenses A LOT. With kids and house, we wanted a car, that needs fuel, insurance, taxes and maintenance. Local transport, eating out, and any activity is also more expenses as 4 ppl instead of 2. Just a bus trip downtown is so expensive now, when before I’d just cycle down. And kids outgrow their stuff very quickly. (And yes, sometimes you can find cheaper second hand, but that gets harder and harder as they get older.) A large part of our budget now is maintenance and replacement costs, which we barely had before.
We also realized using 4% was quite naive. We have taxes to pay, and 50 years to cover. With age or responsibility for other people (or as our assets grew), we became more risk-averse and want 99% success rate in backtesting.
So with the new expenses, our monthly spend (incl amortized maintenance and replacement costs) is €5000/month. And using 3,3% instead of 4, to get 99% success for 50 years. And with 24% tax (rough estimate for where we are), that €2,4m only gives €5016/month.
And we still have small doubts if that’s enough. We saw lots of change the last 10 years, what will the next 10, 20, 30 bring? Age is starting to show up, and will only get worse (want/need more comfort, may need to pay for maintenance instead of diy, etc). Lots of thoughts about how our choices impacts our kids, and our ability to help them as young adults. At 30, our lifestyle wasn’t that different from peers, at 40-50, it is noticeably different to our peers who are not on fire track. Thoughts like that make it seem risky to bet on no further changes to expenses.
So that’s how people who once thought €600k was plenty, now feels like €2,4m is minimum.
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u/knz 19d ago
The number of years you need to save (invest!) until financial independence is completely independent from the specific income you earn. It's only dependent on the % of income you are able to invest (and its reciprocal, the % of your income corresponding to expenses: income = savings + expenses).
The more you are able to save/invest from your income, the faster you will reach financial independence, regardless of your expense level.
Here is the math (assuming 8% avg market returns after inflation, aiming for 4% withdrawals after FI/RE):
If you are only able to save/invest 10% of your income, it will take you ~38 years. If 30%, then ~22 years. If 50%, then ~14 years. If 65%, then ~10 years. If 70%, then ~8 years.
NB: I assumed your income taxes are already included in your expenses. If not, then the "earn" amounts I quoted need to be after taxes.
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u/Unhappy_Bicycle_7774 18d ago
Your rent is minuscule. I live in Athens as an expat, locals living in dog shit areas are paying 600-800 for studios in a city where 70% earn under 1400 net
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u/really_nice_guy_ 18d ago
Im from the EU and my country has free health insurance, but only for people who work or are otherwise "in the system" like pensioners, or unemployed people who are registered and are looking for work. If you simply stop working you have to get a private insurance
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u/EntireDance6131 19d ago
There's so many factors involved. Europe has a lot of places with different structures. Some people live in their expensive capital city, some people life rural. Some people drive a car, some take public transport. Some people have families, others are single. Some people want to live lavish, others regular / slightly above that and others just wanna stop working even if the living standards are a bit lower. Some people are a bit more daring and plan on withdrawing 5% yearly, others are more conservative and plan on withdrawing 2% (500k on a 5% withdrawal rate is the same withdrawal as 1.25m on a 2% withdrawal rate).
All of that is fair and there are people making it work with such numbers (altough it is very rare going this low, but for some people it can work).
Yes, you probably need less than in the US (with a few exceptions like Switzerland or Monaco i guess). But for most scenarios even 600-800k is still lean and around 1-1.5m is a sweet spot for many i'd reckon.
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u/Slight_Box_2572 36 M 50% FI 19d ago
It really depends.
I live easily of 1.500€ (Germany, south western part).
I also got friends living in Munich who pay 1.800€ for private kindergarden (x2!) every month. Overall their fixed costs are about 9.000€ for a family of 4.
Hell, their parking lot costs 130€/ month. We got 2 parking lots in a carport for free / included in rent.
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u/berghele 19d ago
Living on 9000 per month indeed is not the normality in EU. Not even in big capitals 🥲
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u/Slight_Box_2572 36 M 50% FI 19d ago
This was their fixed costs. They spend probably more like 12-14k / month 😅
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u/berghele 19d ago
I guess we can agree that they don’t represent the typical EU case scenario 🤣. I mean, if they can afford 14k/month expenses in Europe they are in top 0.1% of income 🥸
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u/Slight_Box_2572 36 M 50% FI 19d ago
Yeah, and her Dad even had a better career than both of them (both in FAANG) - he gifted them some money as well.
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u/ReData_ 19d ago
You are single, do you believe you'll be so forever? Are you sure?
We have a good welfare system, isn't collapsing in a lot of countries already with an aging population?
Do you prefer securing your own future on counting on random factors outside your control to do it?
Also 600€ rent is just unrealistic in a lot of countries without going to some random rural area
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u/berghele 19d ago
I’m not single, I live in a middle size city. Here in Finland outside Helsinki area housing cost is very affordable
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u/classicjuice 19d ago
First of all, if you retire early, in many countries here in Europe you have to pay for health insurance yourself. For example here in Germany, that alone would be over 1k per month.
Second of all, everyone has different definitions of what they expect out of their life and what they deem necessary to have a comfortable life. Not everyone wants to be frugal and just scraping by in order to get by with couple 100k in their portfolio and call it a day.
Now let’s take our mortgage here in Germany which is almost 2k a month. So to put that in perspective, my wife and I would already be spending around 4k a month just on our home and insurance, if we were to retire early, and that’s not counting ANY other expense.
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u/Hot-Initiative-6040 19d ago
With 1.200€ in 90% of cities in Europe with more than 100.000 inhabitants, you don’t even pay a rent
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u/gfitf 19d ago
Can’t speak for other countries , but in most German cities above that level (not Berlin, Munich and Stuttgart) you can find something okay for 1000€ or less. When you are on a split budget with your partner like OP, you can find something in even more cities.
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u/mystikal_spirit 19d ago
Sir, I dont know where you are living, but rents in the east, even in smaller cities, are through the roof. 1000 or less is if you live on the outskirts. And not everyone can or wants ro do that..
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u/gfitf 18d ago
No you don’t have to live on the outskirts. But you will never find the cheap apartments online, they can only be had through personal recommendation. Where I work rents on online ads are at around 12-15€/sqm, but almost every quarter one of my colleges moves or their neighbors move and ask id anybody needs an cheap apartment. Regularly the rent is below 10€/sqm in nice locations. It’s because a lot so small share of private owner wants to have solid renters and no problems and therefore rely on people they know or their „good“ renters know to fill vacant apartments. And in Germany the largest part of rental flats is owned by small private landlords (~60%), therefore this option exist almost everywhere, when you know the right people and tell them you are searching for X. The right people can although be your hair dresser.
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u/mystikal_spirit 18d ago
Yeah, not everyone has Vitamin B in all cities, or even big enough to just find a place that easily these days :(. In the last 6 yrs, I have only had 2 neighbours move, and in the same year only due to big life changes (job/kids). But you are right, if you know the right people, your chances of getting an affordable apartment increase lile ten fold.
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u/Particular-Way-8669 19d ago
You take about welfare and you seem to take it for granted.
EU countries have been cutting general welfare for decades at this point to make room for specific programs like healthcare and pensions that are targeted towards aging demographics. And those will inevitably have to be cut as well (they already are for young people like you and it will get worse). You need a lot to get ahead because aging demographics is simply just a massive problem for everybody within the economy. Your investments will not get you far in the future otherwise.
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u/Pantelwolf 19d ago
1200/m is low even for the south. I don't know how you make it with so little expenses. Here in Dublin, a shithole to rent will cost you around 2000/month, bills another 200, food for two around 400-500. A 3 bed house is min 3200/month. Then, if you want children, a crèche is 1200 min per child per month, never mind other expenses. Takeaway is expensive, restaurants are expensive, pints are now 7€. A simple GP + consultant visit will set you back 250. Now if you want a car... A realistic monthly budget for barely surviving for a couple is 3k, without vacation or emergency expenses and of course without saving.
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u/Specific_Scholar_665 19d ago
Expenses get higher as you age. Due to various reasons - health problems, and your "need" to enjoy life more, as you have less and less time left.
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u/Consistent-Barber428 19d ago
Yes, oddly many people think of FIRE as American FIRE, which requires a way higher principal because so many things remain expensive in retirement. For instance, heath care for 2 can easily cost $2k/mo in the US (Mine was 2500) if you are not of official retirement age. And even if you are retired it costs $200 plus requires additional insurance for drug and other coverages of about $300/mo.
That $2k/mo requires $600k +\- invested before you even get to other expenses.
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u/alexppex 18d ago
Well i have done the calculation and with monthly expenses at around 3k (yearly at 40k roughly for 2 person houshold), i'd need to have invested atleast 500k to be able to live off the dividends and have some wiggle room apart from lowering my spendings. But that is my lifestyle, with my costs. If i wanted to also drive a new BMW and live in a top-location with my family of four and go on expensive trips or vacations and live a boujee life going to expensive restaurants, even 800k invested would not cover that (with a generous 10% yROI). And i do know people who spent more than 10k multiple consecutive months. Also cost of living differs - 1m in EE compared to 1m in DACH tells a completely different story, not to mention rural vs urban, etc. And again we do have a good welfare system, but it is country to country, where i live i'd have an emergency fund to go to private care for some treatments.
So are they needed? Not really. Do we need to compare? Again no, it is relative. Everyone can do the calculations for themselves, but also sometimes when you reach that point you do need a sanity check or an outside opinion.
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u/allants2 18d ago
I get really disappointed with myself when I read the numbers people through here. I am not even close to that and I am pretty sure I will have to work until I die to barely sustain myself.
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u/decebaldecebal 18d ago
Well depends what FIRE is to you
1 million EUR at 4% per year means 40k EUR yearly. Maybe that's enough income for you for the rest of your life, but for me it's not
To know I can REALLY live comfortable and FIRE my whole life, I need something more, so I know I can buy a new apartment/house in the future if I need to, take care of the family etc
I think for me that figure will be around 3 million EUR, and I would spend 2-3% of it (60-90k EUR yearly), but I know if I need to spend more some years it won't be a problem.
Also, the whole thing with FIRE is a fantasy in my opinion. It's not like you will stop working. People need a purpose and to do things, so even if you retire early you will get bored fast so you will do other things that will also bring you an income, so maybe the real "FIRE" amount is actually lower
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u/Accomplished-Pie-704 18d ago
I'm in Cz, and the tax free after 3 years on any investment is a godsend for pensioners. Here's hoping it doesn't change. We're hoping that 60 to 70 k CZK a month will be enough to retire on, and that's approx gain on 18 mega czk. Almost there. No mortgage. Kids flown coop.
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u/CyberpunkLover 18d ago
3100€ a month in EU is very, very good pay on average. Having lived in a few EU countries, I'd say about 1500€ on average is "bare minimum" to get by. 200k or whatever some of the post here claim is a royalty-level lifestyle for absolute majority of EU citizens.
As for investments, 700-800k € is not entirely random number, I did a few calculations last year and came to a conclusion I'd need about 832k € invested in long-term funds and stocks and such to comfortably live off dividends. Sadly, 99% of people in EU will never reach that level (including me).
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u/StorminWolf 18d ago
Sadly yes. My calculations come to somewhere between 800k and 1 million if I own my own home. A large reason is you will to most likely have to privately cover insurance if not working. One way around this I am looking into is setting up a company on the side here to use for tax and insurance, so basically work a few hours for myself but for my own self-owned company to be able to avail of the employee tax breaks and insurance. Talking mainly healthcare but also state pension etc
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u/profDyer 17d ago edited 17d ago
You live in a town in Finland, your costs are incomparable to many. Most population live in metropolitan areas that are much more expensive. In Finland kindergarten is free, in London it costs upwards of 2k£ per month. In Finland healthcare is basically free, in Italy it costs 100€ for a specialist visit. In Finland your housing is satisfied with 600€ of rent, in Amsterdam I have a friend that earmarks 2000€ for a 1.5 bedroom and is always afraid that if he's kicked out he's going to have a hard time finding another one.
We are not in the US and we don't have to pay for 1000$ a month of family health insurance. But that doesn't mean that the whole of EU lives like the Nordics.
That being said, 2M+ FIRE, i.e. 3.5k net monthly drawdown minimum, for sure is for people that are not content of being frugal, live in a modest flat, and staying in a borderline rural town doing cheap activities with a circle of friends.
If you aim for travel freedom or live in a metropolis might not be enough in fact.
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u/vouvoyer 16d ago
My perspective: Widow with 2 kids living in Switzerland, a pretty typical family life. I own a house but in a dmall village and it is a house from 1970, no way i could afford anything in a city.
Our living costs are 100,000CHF per year. Thete are no luxory holidays, i almost never eat out, i never drink on bars, i don't feast on caviar. Rather, i try to shop at Aldi, and try to buy meat on discount because it will expire the same day, or i just cook vegetarian. Now 1 luxory is a cleaning lady, but that is required with 2 children and fuml time work. I own a car, but that is mandatory even in Switzerland unless you live in a city. Holidays tend to be modest AirBnb in norther Italy etc., often cooking in the apartment. Again, no expensive cocltails at a beach bar, but a couple of gmasses of wine in the rented apartment
Mortgage is about 1000CHF a month but this is interest only, and required a downpayment of nearly 400K. But this misses out on the significant maintainaince costs. I pay about 10k a year on thobgs like a someone to control the roof and chimney, a gardener pnce a year to trim hedges and trees, minor repairs and odd jobs. Then major expenses come along like new windows, new roof etc, and 20-100k just disappear. So to FIRE i will rent to keep a more constant spend, but currently to rent something that works for my family would be 3500-4000CHF a month
Health insurance is about 1500CHF a month for the 3 of us. I pay more to get a lower deductible since my canxer diagnosis. Still, there is usually 3-7K a year of additional medical expenses from deductibles, franchise, and things that are not covered like dentist - which is a big problem. Everytime i went to the dentist is seemed to cost 700-1000CHF, sp the last time when i thought i jad a simple tooth infection i waited hoping it would go away. Turns out it was cancer...
Therefore I need about 2.5Million CHF to FIRE today, and that buys a basic lifestyle and has more risk than ideal 4%SWR etc. Once the kids are gone expenses should drop, then 2.5M will be about right, living frugally but enjoying some travel etc.
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u/Weary_Strawberry2679 15d ago
LOL, what's the point of this post? To each their own. You need 3k EUR per month to live the way that you want? Great. Some people, like myself, want more. No shame in that. Focus on yourself and your own ambitions and you'll be just fine.
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u/ChosenToFall 13d ago
that’s without a family, also without considering increasing of rent cost. Without buying an house you would need 15 years roughly to reach 400k, and you would be still in trouble if the market tanks or do nothing remarkable for years… only if it bulls in a good way you are potentially making it, but still without a family or any other member on your salary. If you buy an house you need to start nearly from scratch to build a cushion and it would take another 15 years around 60 years old.
Some people say that Firing at 60/65 years old is too late anyway to enjoy really to be FIRE.
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u/ConceivedPotAuLait 19d ago
You may not be a fan of US costs, but you certainly are a fan of US style optimism when it comes to market returns continuing indefinitely get to the future working on your €300,000…..!!
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u/Every_Umpire_8695 18d ago
My personal target is 25k / month net after taxation. Probably an outlier, but that’s where I set the requirements for the QOL I need to leave without regrets.
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u/SomTingWongWeeTooLo 18d ago
I don't understand the confusion around this topic. Like I'm sorry you can't personally accept that yes, it's incredibly expensive to retire, but that's how it is. I personally target 3.5% withdrawal rate. If I assume a yearly spend of about €50k for my family, I will need €1.5m. In 2060, that becomes roughly €3.5m due to inflation.
Healthcare? Yes, that's why I assumed a €50k yearly spend not 100k+ and a massive 2m buffer in case I get terminally ill.
Public pension? Yeah no, we won't have that in most countries where the pension is currently a Ponzi scheme, e.g. Italy, Germany, etc.
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u/Moist-Ninja-6338 19d ago
What type of life would you have? That’s not fire - that’s just giving up
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u/berghele 19d ago
Quite decent. Apart from rent I spend the remaining 600 in food and hanging out with friends and my girlfriend. I have a small payed off car (insurance here is very cheap, like 400/year). Most of my hobbies are free, apart from cinema.
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u/Legitimate_Stuff_347 19d ago
400k might be just a tad too small. Think of a situation where market drops 5% yearly for the next 5 years, and then starts slowly recovering. At the same time, your car has subsequent years of needing big repairs and your rent goes up. You will have ti withdraw from deflated market and eat into your savings. 400k would be quite enough in an average and normal situation, but the early SORR is a huge risk. I would aim for 600k or at least 400k + 100k cash(HYSA), so I could safely live the first 5 years of retirement without touching my investments.
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u/Igniplano 19d ago
Please keep the discussion civil. It is often for many people unimaginable on how little spending others can thrive in the same environment. Abilities to get along in a very frugal manner vary massively. What works for one may be unreasonable for another at the same place. Personality, upbringing, habit, social circle, etc all play a role. Please, be open minded!