Reader Case Study: Working to FIRE in Finland

68 Comments

1. I don’t think I have any specific recommendations. I just wanted to let you know how supremely jealous I am of your current lifestyle and all the benefits and amenities you enjoy in Finland. I literally started to tear up and cry reading about how Alex was able to take such a long paternity leave to care for your child. My family would kill to have that as an option to us. And the ability to work a 4 day week until your child is in third grade? That is AMAZING! You said that you are surprised that Finnish people have the highest happiness index, but what you have described in your post is a life of contentment. Please don’t interpret this as saying that you have no problems or no unhappiness. I am simply envious of the beautiful life you have created. Good luck on all your goals and dreams and aspirations!

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   1. I was thinking the exact same thing while I was reading. I’m sure there are things in your life that you would like to change, and the unpredictability of pensions in Finland sounds stressful. From an American parent’s perspective though, I really envy the support that your country gives to families. Your life sounds so lovely! Best of luck in pursuing your future goals.

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      1. Thanks Katie, yes the problem with the pensions are the low nativity. We have an aging population that us working people have to fund. Let’s hope the negative nativity trend is about to change! Anyhow, I am better off than many of my likes as I do save and invest more than most people. We do enjoy the possibility to stay home with our babies. Most my friends are think I started working very early, when my son was 8 months. Usually moms go back to work, at the earliest, when the child turns 1 years old. It was also wonderful that my husband got to stay home for 10 months as well. The bond between father and son sure changed to something so much closer due to this time together. Thanks for you comments!

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         1. I hope the lower birth rates to not change. The world is overpopulated as it is, and the climate crisis can be blamed partially on the population! That said, many countries are in this fix of meeting obligations of older folks (who already met their own obligations to generation before).
            Governments are going to have to get smarter and perhaps more creative — and perhaps tighten their belts in other ways (such as the US and military spending).
            Anyway, perhaps frugal folks can help governments figure out how to balance the budgets in coming years.

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            1. That seems unlikely as citizens are promised and demand more and more from government and become incensed at talk of reductions. Keep in mind that in the US the largest spending by government is on benefits for senior citizens and just like Finland, fewer and fewer workers are funding the promised benefits.

            2. Yes, overpopulation is a huge problem. And even though I believe everyone of us needs to do as much as we can to help decelerate climate change, Finland is a tiny player and if we have a few hundred people more or less won’t impact global warming. Governments will definitely have their work cut out in implementing correct changes to stop climate change. If they listened to us frugal people they could definitely learn a thing or two!

   2. Thank you so much for the kind words. I am very appreciative of what the wellfare state provides, all in all it is worth the high the high taxes we pay 🙂 And as you say, there is no perfect system. However the Finnish one has served me well and as a new mother I really see what a great security (& quality of life) the wellfare state provides 😊

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      1. The thing that really struck me so hard (*so hard*) was how, though your taxes are indeed very high, no question, what you ”get” is… unimaginable for us in a tinpot banana republic (South Africa, yes, it really is… bad). I just love the notion that when you pay in, you actually tangibly get services and education and various other things for your money, and that you have every right to it, that every child has the right to education, good education, right up to tertiary. No one needs to go hungry because of ”no money”.

         Obviously there are down sides and things that need upgrading, changing and adjusting. I realise your winters are long, cold and dark, and that nowhere is perfect, nor perfectly run, but my envy at the moment is high!

         I might have missed it totally but are there any ideas for another child at any point? That would presumably delay retirement a bit, if not quite a lot, but either way, you and your family are seriously doing well and have my real admiration for working towards a meaningful, happy, productive life. I’d say try out the Air B n B with the property you have, and if it works out, grow very slowly and organically. Being a landlord is quite stressful, or it can be, and some people absolutely thrive on it, but others actually hate it, no way to know till you try!

         I loved reading about your life in Finland and the real details of how ”normal” people live and healthcare, work, education etcetera works. Fascinating.

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   3. I am in the same boat. I’ve long been a fan of the Scandinavian countries, and your social policies are a major reason why. It seems attainable for most people to live comfortably, with critical things like education, childcare, healthcare, employment protection, and retirement made affordable and provided for all people. I know it is not perfect anywhere, and we have some big issues looming over us in every society, however – you seem to have wonderful priorities and live a very admirable lifestyle.

      The only tangible recommendation I have may seem contrary to your FIRE goals, but you mention being really tired, managing a chronic illness, and also wanting more energy to spend quality time with your son, exercise, fill up your own tank, etc. With your career, role as a mom, and passion for building out your homestead and AirBnB comes a lot of extra projects, without much downtime / margin to recover.

      Perhaps taking an evening off during the week with no extra projects, or one “unscheduled” weekend a month could help restore your energy, and also give some mental space to feel your way forward in your many future goals. You sound incredibly driven, creative, and hard working, but also like you may be burning the candle at both ends, given all that’s on your plate. 🙂

      I hope this does not come across as judgmental – you’re extremely inspiring, and I simply wanted to point out something that is not often discussed, but I think overlooked in modern society. Sometimes we simply need time and space to decompress.

      Wishing you and your family the very best, Jen.

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      1. Hi Dana,
         You could not be more correct and you are not judgmental at all! I seem to have the hardest time nowadays prioritizing myself. I really need to exercise and meditate more, this should actually be my main focus for the fall! Thanks your input!

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2. I loved reading Jen and Marc’s story. For a frame of reference, I am British and living in the USA for 11 years. I am 46 with an 8 year old and the breadwinner. My approach to FI changed from my late thirties to early forties. I had a couple of very fit and healthy friends go through cancer treatment and their experiences were radically different based on their financial position. Even in a country with strong social welfare not having to worry about finances, going back to work, taking care of your kids and focusing on healing makes a big difference. My FI strategy changed from one of acquiring assets to cash flow so that if challenging things come up (sick kid, sick me) they are easier to deal with or if opportunities present themselves (my kid is passionate about something expensive! or I am!) that we have the funds to realize those adventures. Most of my assets are in real estate. It is scary at first! You have a great start with your airbnb. Go for it, get it up and running and if you love it do some more! I focus on covering different bills ….first it was car insurance payment, then groceries, then mortgage payment etc. I am close to having most of my bills covered and am now working on other living costs. There are unknowns in pensions (look to Greece ……they pushed their pension age out) and as you point out that is unguaranteed money. Working on your own guaranteed cash and treating everything else as a bonus maybe a good head space to get into. You are doing great at cutting expenses. This continues to be a journey for me……..I keep learning different areas to cut that do not impact my joy. It sounds like you are already in this headspace which is awesome. I would focus on growing income and savings. Loved hearing your story. Good luck and keep Frugalwoods updated. Kate PS your home and setting look incredible!!!!

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3. Thanks so much for these wise words! This is a great perspective on my “situation” and there are some common points in our stories! You are probably spot on with prioroties changing with a child coming along. Ours is still pretty cheap 🤑 but I have a feeling that will change as he grows older 🤣. And when that day comes we want to be able to provide the possibility of hobbies and trips. You also right about the pensions, which means I need more money to retire. But I just have to face that fact move forward ( even though pur pension system is a lot more stable compared to the Greek one ). Thanks again !

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4. I loved reading about your life in Finland! With regards to your pension, we here in the U.S. feel shaky about our Social Security System as well. Most folks I know getting fairly close to retirement (I’m 56) have grown up wondering if we will still have our benefits around after we retire. Most people I know don’t even factor it in and save through our own retirement/savings accounts. If we do receive our benefits, we will consider it a bonus.

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   1. Thanks,I’m glad you enjoyed my story 🙂 The biggest problem with the Finnish pension system is that our nativity is exceptionally low, so there is continuously less people paying for the previous bigger generations :(. Corona has at least temporarily changed that trend increasing nativity, let’s hope it continues like this. The system itself is quite robust.

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5. I absolutely fell in love with your beautiful country when I visited Helsinki a few years ago!

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   1. Nice to hear! You’re always welcome back. I have also enjoyed the US many times and hope to be able to travel there again soon 🙂

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6. Hi- I have a suggestion for a goal, though it is a relatively small one. Your cars are old enough that you could start setting aside a fund to replace them. And, of course, consider what you’d be replacing them with. I know the Avensis comes in a hybrid version, but you don’t mention if that’s what you have. My last two cars have been used hybrids, on purpose, for the ecological and financial benefits, but also because I live in Ireland- so, as in Finland, all the cars are imported and petrol is about $5 a gallon. My car is a 2011, so I’m thinking about our next car as well, and hoping to buy electric next time. I don’t know what the situation is in Finland, but in Ireland you need to pay an electrician to survey your house to ensure it can charge an electric vehicle safely, before the charging apparatus can be installed by the government’s electricity board. If your house it older, your wiring may need upgrading first (also out of your pocket). If you are already considering updating the energy infrastructure in your house, you might want to consider how you would accommodate an electric car. Definitely a project that requires planning and funding. Good luck.

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   1. Hi Cara, Thank you for you thoughtful comments! We do indeed drive an Avensis 🙂 And I love our old dented baby 😀 To be 100% truthful we have no plan for our current car park. I’d love to replace our current cars with something more ecological. As I changed jobs, I am not so reliant on car and we could almost manage having only one car. We both work from home and will be able to work from home at least part time also after corona. We will probably drive the current cars until they drive no more and then maybe go electrical. I am planning on buying an electrical bike to use for my commute as well. It will anyway be a good idea to have a sinking fund for a new (to us) car. As for the electrical connections I have not heard about what requirements there are on home-owners. I will look into that as well, as our electrics will have to be replaced within 5 years this is a great point you bring up. Greetings to lovely Ireland, I actually did Irish dancing in the past and loved it so much! I love Irland so much, a visit is new well over due!

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7. So cool that you live right next to the water. What a wonderful place to raise kids!
   Paying of mortgage was one of the most freeing experiences ever!
   Let us know when you get the AirBnB up and running.
   Perhaps you could start retirement funds in Finland.

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   1. We also think it is cool to live near the water, just bought a SUP board and can walk with it to the beach. Paying off the mortgage would be a great feeling, but on the other hand our total interest is 0,6% at the moment. Investments of most kinds seems to pay a lot more.
      We are so close with being ready with the AirBnB, I laid the last floorboard today 🙂 Hopefully I can list it within the end of the month, so looking forward to that.
      The retirement funds we have are the pension funds regulated by the government. It would be nice to be able to have more freedom in how my retirement money is invested. We pay quite a lot of money into them.
      All the best to you!

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8. Jen and Marcs new house and property look absolutely gorgeous! I am jealous of so much beautiful nature surrounding their home. Here in the states the things you already have are what we are fighting for.Long paternity/maternity leave which is paid,4 day work weeks,free healthcare etc. Nothing is ever perfect though and I understand that. My advice would be to get that cottage rented out and use the money to pay down your mortgage and boost your investing. With no mortgage you are free to purchase more rentals, work less, invest more etc. Your options open up.

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   1. Thank you, the property is our little baby, but nice to hear that you like it too! We surely hope that the US will go in the direction of more free time to spend with loved ones. What joy is there to have a lot of money, if there is no time to enjoy it! The AirBnB is for sure has the best potential for earning some extra money and also gives us the possibility to accelerate the schedule for buying our first separate rental. Let’s hope our son let’s us put up the skirting boards tomorrow 🙂 After that I think the cottage is ready for photos!!! Being mortgage-free would indeed be tempting, but at the moment that big mortgage doesn’t bother me that much. If/when interest rates rise, it will however be another story and we will throw more money on it. However, if we bought a rental, in a year or so (as Mrs Frugalwoods suggested) I would not like to have a big loan on that. Here in Finland we any way have to have a quite big down payment, 25% when buying a primary home. Thanks for taking the time to give some advice!

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9. Just here to say Hi from a 4th generation Finnish-American 🙂 There aren’t a lot of people of Finnish heritage in the U.S., so it’s always fun to hear from native Finns!

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   1. Hi to you too! Yes, we are a small nation. I do have several relatives that emigrated to the US/Canadian border areas in the past though 🙂 When I lived in the US my aunt used to get this Finnish-American newspaper, and readers seems to be located far from each other. Terveisiä Suomesta / Greetings from Finland!

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10. Loved this case study!!! I can relate to many aspects of this. I am also very into frugality and minimalism, but don’t really have specific FIRE plans and don’t necessarily care to retire early… sometimes I wonder why I spend so much time reading FIRE blogs, haha. I think what appeals to me about it is the intentionality. A lot of advice around FIRE involves knowing your goals and what you are working towards, but I also think you can be motivated by the benefits and options that a frugal/minimalist lifestyle brings right now even if your long-term goals aren’t clear. What works for my husband and I, when we discovered FI/minimalism and started being more frugal and intentional, we started having monthly money date nights. We used personal capital to track our expenses, and at the end of each month we would make something special to eat and review our expenses and talk about it- no judgement, just talk through the expenses and whether in retrospect they seemed worth it. It was shocking in the beginning how mindless some of our spending was, like we would see several hundred dollars in the restaurant category and not even be able to remember how we had spent it all until we looked at the individual transactions. Then we would talk about whether we saw any expenses we could cut. If we weren’t sure we’d experiment, try going a month or so without whatever we were thinking about cutting. Month by month we whittled away at our expenses and became a lot more mindful about what we buy- you think about purchases differently when you know you’re going to have to face them at the end of the month, haha. Now we’re kind of on autopilot so instead of going line by line through expenses every month we have a few money date nights a year and we tend to talk about things like what to do with bonuses or what large expenses we have coming up or big things we want (like home renovations, travel). We never budgeted- we’ve tried before and that just doesn’t work well for us. But going through that process – tracking expenses, meeting regularly to review, and experimenting with cutting expenses just to see how it went – got us to a point where we feel like our spending is really optimized for our life. We’ll reach the FI goal eventually, but in the meantime we don’t feel deprived since we know what we are spending and why. And we have a lot of security and options because we’re spending well below our means.

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    1. Brittany, it sound like you and your husband have a great and fun system set up! You are right that minimalism and frugality in itself brings me meaning and joy. It feels so good to buy used things and try to be ecological generally. The fact that I am more frugal has made my current life better, as money matters don’t stress me out as they used to. After doing a lot of thinking I think my goal is to continue working. But what I want is to choose my working hours (reduce them) as well as being able to do work that won’t necessarily be as lucrative as now. I do know budgeting is so important, and we should track every expense. Let’s see if this could be a start for that. Your story sure inspires me to do that!

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11. Kia ora from NZ, we are a similar size to Finland, we are also a welfare state but unfortunately don’t share your happiness level but it’s aspirational for us:). My 2 c worth on your questions:
    1. Yes stage one is research, read widely and find different blogs / books. My favs are frugal woods, our next life and your money or your life. Stage two is changing your behaviours – all of them and goal setting! Stage three is the grind but really important part of enacting your plan but enjoying your life while you do so. Stage four is the self actualisation piece if your post FI life.

    2. Little changes add up, frugal woods month long Uber frugal challenge is hands down the best way to create awareness and change. It’s only a month:)

    3. Liz gave great advice, you need to know what your now income and expenditure are on an annual basis. Then you can do the standard 25* that number to get an indication of your fire number. During stage three you will refine this.

    4. Our next life has a great way of putting the layers in. Have a read of their book work optional.

    5. We were keen on real estate too… not so much after the experience of being a rental owner particularly to students. We now concentrate on passive investments through growth funds – they don’t call us asking about changing a lightbulb, break things, cause enormous damage! Do your rental market research very carefully and target a market that you are comfortable renting to and make sure you know all the costs, budget for maintenance and people breaking things and all the taxes, if its costing you money per month to top up the expenses then it is not an investment.

    6. Our Air B&B goes well as a longer term let. You might be just a weekender or holidays place. Know what works in your market. Definitely charge a cleaning fee and be very clear on what you are and aren’t in your listing. See if there is a local air B and B face group group, have a look at others listings in your area or a like area and start small. Good luck:)

    All the very best on your journey.

    Trace

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    1. I have heard a lot of good things about NZ, though. Your beautiful country is on the top of our bucket list for places to go! It would be a nice place to spend a mini retirement in.
       It feels like I have done a lot of research, but I kinda jumped over the part where I really, really thought about my goals. I just right into the cutting costs and trying to increase my incomes. Thus, now is the time to really think about that by researching and trying out different things.
       Yes the FI number is really hard to figure out at the moment when we have so many special costs due to buying the house.We, of course will have to factor in all future renovations & reparations as recurrent costs as well.

       Thanks so much for all your advice, especially the on about the real estate and the blog Our next life, that one I have not visited that one yet!

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12. We have what I deem welfare states in the US and trust me, I’d never lump Finland in with them as all benefit, not just the rich.
    Working FT with a child isn’t easy (and isn’t any easier with two), even if you telecommute. BUT I will say as the child gets older, you’ll not be quite as tired.
    I do think you need to focus on saving more money – the US has SS but even back when I first started working (44 years ago), I never counted on social security, much less a pension. I’ve never had the desire re: FIRE – I love what I do for a living. But we’ve always lived below our means which pays off in the long run.
    Even if you can’t heat your home exclusively with wood, it will save you money (and is a relaxing warmth).

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    1. Thank you for the encouraging words! It already feels a bit better with the tiredness, so I am hopeful that next winter won’t be as bad as the last one. I will for sure focus on saving more to increase my investment portfolio. The numbers look worse than they actually are due to the acquisition of the house. I save and invest around 30-50% of my income on a monthly basis. So the pension will be a bonus, I will any way not be eligible for the pension until I am 66 years old, and that date might be pushed back even more. It has been pushed back several times already!

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13. So interesting to read about living in another country! Fitting exercise in can be hard with work and young kids. I try to either 1) do 2 things at once – talk with friends or family by phone while walking or exercise and watch tv, 2) incorporate spending time with my kids while doing something active. For example, I’ve been swimming laps while my younger daughter is taking swim lessons this past week. I used to walk with my kids in their strollers a lot or bike with a kid carrier. As they got older and could play on their own, I’d walk laps around the playground. Since I also own property by the sea, I would look at how climate change may affect your area with sea level rise or flooding like is happening in parts of Europe given how close it seems you live to the water. I am envious of a quick walk to SUP though! It will be a great exercise to do with your son when he’s a little older.

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    1. Yes, it would probably be a good idea to take a dance class at the same time when I plan taking my son to a toddler dance class. They usually offer suitable classes for moms at the same time! When Alex was born I used to go out on long walks with the stroller, however, when he turned one he decided he was done with sitting in the stroller. I can’t keep him in that thing for more than a few minutes 😀 That doesn’t mean we cannot figure something else out. He actually does still enjoy riding the bike with me, I will make it a priority to bike to the grocery store with him on a regular basis.
       As for climate change I have no direct worries. If something major would happen I guess it would more go into the category of freak accident, or it will be some new climate change phenomenon we still don’t know about. It is actually safer to live close to the sea compared to a river here. There are many rivers that regularly flood. Due to the tectonic uplift (a think mass of ice pushed our land far under the sea lever during the ice ages) the score line moves farther and farther away each year ( 0.4 inches where I live). It is however not a bad idea to research what could happen here. And climate change is changing so many parameters we didn’t have to take into account before.
       Thanks for the motivating words!

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14. Hi I’m also in Ireland and am working towards FI. I hope to be in a position where work is optional by age 54.

    I find the US fire blogs are great for inspiration but the actual numbers are very different due to taxes on investment in Ireland. I dont know the specifics in Finland but I’m guessing you also have high tax on investment returns. In order to do us style fire of 4% drawdown, the 4% would need to be twice my annual expenses to pay for the taxes, in order to have true FÍRE using the US plan.
    So instead I have a spreadsheet where I add up all my income for the future until retirement (retirement age is an input I can change), my state pension when I am eligible (assuming rules do not change currently I am eligible age 68), all my mortgage payments until it is paid off, all my childcare costs until kids will no longer jedx childcare, and finally all my other expenses excluding mortgage and childcare (I use my 2019 expenditure for that as I was happy with my level of lifestyle that year). I also include the current value of all my savings and investments except my primary residence. I ignore inflation salary raises and investment growth, so I am basically assuming they will cancel each other out (which is a conservative assumption). And I then adjust the retirement age until assets equals expenses. I haven’t fully accounted for taxes in retirement yet but will include that properly. Once a year I update all the figures. Last time I did it my retirement age was 54.

    This means that I am essentially planning to die with zero except my house, but in a welfare state that is not as risky a proposition as in the US, so i am OK with that.

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    1. Sorry I also ignore taxes on investment, so I am basically assuming investment growth will cover the taxes and inflation but nothing more than that.

       Also sorry for all the typos!

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    2. Hi Kirsty!

       As we are both living in EU countries our situations are a lot more comparable compared to the US. I have learned so much from the US FIRE blogs and am forever grateful for that! But, as you say, we don’t have 401k’s and many other US specific things that we don’t have. The taxes on invested funds are at the moment 30%, and I am expecting to pay between 30-40% taxes on that income once I retire and transfer over to living on dividends and divestments. Yes, I will have to factor in the mortgage as an expense, as it will be payed off when I am 63, if I continue paying it off as now. Thanks for sharing your way of doing this!

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15. Move south is the key. Our expenses in Spain are quite a lot less than Finland. ‘Empty Spain’, like Extremadura province is particularly cheap — although more people are moving there as they can work from home. I pay EUR40 for a 15litre wine box here. Doesn’t last long though!!

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    1. Hola Mike, yes Spain is so cheap! I couldn’t believe the prices of going out while visiting Bilbao. If it were only up to the financial side of things I would be there in a jiffy 🙂 But I want to be close to family, so I’ll have to bite the sour (expensive) apple and live in this expensive country.

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16. From your story it sounds like Finland has a defined benefit pension scheme.
    Is there any opportunity to invest in what I would call an accumulation fund or a defined contribution fund with favourable tax benefits in Finland? Or the only tax favourable superannuation/retirement schemes in Finland are defined benefit?
    I think everyone’s FIRE number is a deeply personal decision based on how much they want to live on. I know folk who are happy to live on approximately $12,500 euro pa, up to folk who want to live on approximately $62,000 euro pa. Based on their desired lifestyle people expect to reach financial independence at different times in their lives. Like you, I quite enjoy my job so I’m more interested in reaching financial independence early, but then retiring late.
    In Australia a lot of FIRE folk invest in ETFs either through managed funds or the share market in preference to property. Property has some leverage benefits, but it can be hard work to manage, as alluded too by other commentators.

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    1. Hi J,
       I guess I have such a hard time figuring out my FIRE number since so many factors are moving at the moment. I have no idea on what our “normal” annual costs are living in this big house.
       There is no such tax deferred funds available in Finland. There are so called Pension funds/insurances one can invest taxed income in, but they are really expensive and I really see no reason to invest in them. The best option is to invest my taxed euros in ETF and index funds. As of last year there is also an investment account type where each person can insert up to 50000 euros and buy stocks. The dividends can be reinvested taxfree, you only pay taxes once you take out that money. I cannot transfer my current portfolio there without selling it, transferring the cash and reinvesting it. So, that is not favorable. I haven’t bought anything in this new Stock account as I am mostly buying ETFs and index funds at the moment. I really think our little cottage is a great opportunity to test out real estate investing/management without going all in. If it is not for me I’ll just use the cottage as my office 🙂 Thanks for your thoughts and advice!

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17. Just a correction – marginal taxes simply don’t work the way described, but it’s a very common misconception. If your tax rate increases when you move up into the next tax bracket, it only applies to the amount over that bracket threshold, not your entire income. Therefore, it’s mathematically impossible to lose net income as one’s gross income increases.

    That’s the way it works in Canada, anyway, yet I’ve run into so many people who had this misunderstanding.

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    1. I should note that adding in other programs/benefits can change that, but it’s usually a pretty weird quirk. For example, the combination of low-income tax credits, progressive income tax, federal child benefits, etc in my province creates a situation when if you go from say (can’t recall the exact income amount), $38k income with 2 kids to $39k, you lose out on $200 net. But then it corrects itself when you hit $40k.

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       1. Yes, a known misconception. Marginal taxes (for income tax) work exactly like that in general in Finland. For capital gains and dividends this system is not in place though. Then we pay around 30-34% in taxes progressively, this is taxed differently than income for regular work. I have no idea if we have any such exceptions, I think there might be some tax bracket that is extra unfavorable 🙂

          Reference (All in Finnish, but the green graph depict the marginal tax percentage and the blue the progressive tax percentage compared to income in euro) : https://www.veronmaksajat.fi/luvut/Laskelmat/Palkansaajan-veroprosentit/#bea61847

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18. 1) Figure out the numbers for Coast FIRE, lean FIRE etc. The gap between those two might still be big but it’s a start to make milestones. Otherwise I would recommend to use 100k milestones. As you already made it to the first one, every following will be much quicker to achieve 🙂
    2) Food budget seems to be high comparing to countries like Germany. Are just the basic stuff more expensive or do you buy processed and lifestyle products?
    3) Just find out how much money you expect to earn then and reduce the monthly amount you need by that. Mortgage can be excluded (but not saving money for home repairs!) if you expect it to be paid by the time you retire, otherwise not. So it really depends on when you plan to retire.
    4) You already wrote that you think the system is unstable. You need to ask yourself if you expect to get some money from the system in 2060 or not. It’s a personal preference. When you want to include it, you can reduce the amount you need to have each money again. I can link a spreadsheet I made for this kind of calculation if you want.

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    1. Hi Patrick,
       1) I will do this for sure, why hadn’t I thought of this before
       2) Basically all food is more expensive in Finland than in most orther European countries. Even Swiss groceey stores are cheaper than ours. We try to eat basic food most of the time I we both bring our leftovers to work. Observe that this is not just food but all house hold things we need. We do splurge on some nicer foods for the weekend. Especially now during Corona when we haven’t visited so many restaurants.
       3)That has Kinda been my thinking
       4) I know we will get something, but I fear they will push back the date when I get access to that money. So, I will not be adding that income to my FI-calculations.
       I’d love that Excel, thank you for offering it!

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       1. Here you go https://docs.google.com/spreadsheets/d/1wFAMy2XLppjznapsbbOvmaopkVVO3nhbS1oSpw6S6qQ/edit?usp=sharing

          Just fill out B1 to B20 and get some simple numbers. The expenses after RE are absolute again, not relative from your “normal” expenses.

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          1. Thank you!

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19. Jen,
    It looks like there are many things you like about your life at present, so that’s a win to begin! As you look ahead to the potential of rental income, consider doing what we did. We have a few rental properties, and we began with purchasing a modest duplex. Our theory was that there will always be those of modest means who need a rental home, and if we have two tenants contributing to our expenses, we can hopefully NEVER be without some funds, via rental payments, towards our mortgage. We quickly got so that one rent covered the mortgage, so we could double up without any additional funds from us. Doing this allowed us to build equity quickly, and we used an equity line on the first property to fund the downpayment of the second. We became rental owners about 15 years ago, and I just made the final payment on the fourth of our four buildings. I don’t know if duplexes are even an option for you in Finland, but thought it might be worth a look for you. I wish you well as you consider your options!

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    1. Amy, this is a great point of view. I have not thought about acquiring a duplex. They are not ubiquitous, but duplexes definitely exist. Developing that idea might be converting a suitable single family home to a duplex. I’ll just have to continue researching the market.
       Have you ever had problems with your tenants? How do you choose them, do you have some specific process to weed out bad tenants?
       Thanks for sharing your long experience in the field!

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    2. Piggybacking on Amy’s comment here – I agree, a duplex (or 2-family) is a fabulous way to build equity on a fast track. We are only 4 years in on our first property, but glad to hear that 15 years in, you are sitting pretty! We’ve noticed a dramatic increase in our saving power due to less costly living expenses.

       Jen, I think your AirBNB idea is delightfully similar – particularly if you direct the funds wisely, which it seems you will. Having your rental cottage on your property is a great way of getting hands-on landlady experience (as Mrs. Frugalwoods notes, it’s not necessarily passive!) and you’ll really see if you enjoy it or not.

       As for tenants, it’s great when they pay and terrible when they don’t. Vetting them carefully is the most important thing you could do for yourself. We’ve turned people down (not enough income, pets, smoking not allowed on our property) and have learned it’s imperative to trust your gut. Amy, what do you think?

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       1. Yes, I should think that the AirBnB would make sense financially as the cottage did not increase the price of the property significantly, but if we do a good job we could get a very good ROI on our invested money (the renovation). Thanks for the thoughts on vetting!

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20. Jen – Would love if once your lovely Airbnb is up and running to comment here with a link. Finland is on my bucket list, and perhaps others after seeing your beautiful photos. All the best!

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    1. Hi Dana, I can do this and I got other’s requesting this as well 🙂 My anonymity will be history after that, but I that’s ok 🙂 It warms my heart that our little AirBnB is attracting some attention! Finland definitely has its beauty and if you love nature (and tranquility) it is a very nice place to visit. Everything isn’t super beautiful and the end of fall is a time I don’t recommend coming here, it’s gray, brown and rainy! (As my German friend’s 10-year old put it when they visited in late October one year “Finland is really ugly and boring” 😀
       Finland welcomes you with open arms!

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21. Checking in from Texas, USA and wanted to offer that as someone who is now 100% globally remote, my partner and I are planning on using Airbnb next year (cov-id willing) to slowly travel through Scandinavia, Europe, and Asia. Airbnb is also doing research (I work in tech and this has come through the grapevine) on better understanding host’s perspectives on longer term stays. We’ve been doing it in smaller spurts of month-long rentals in the US, and it’s been great! I highly recommend offering a competitive monthly discount (it’s what we search for since we know we’ll upkeep the space and no turnover) and market rate for daily / weekend rates. As previous Airbnb hosts, we were the “cheapest option in the nicest neighborhood” and loved the longer term guests who saved us from cleaning and the other responsibilities of hosting. Our friends in tech are also contemplating similar avenues (many of us have been doing month-long rentals for years now on Airbnb) so there’s absolutely a market out there and growing for remote folks, who are not tied down to an apartment lease or mortgage. Most important on the list – excellent wifi (ability to get on video chats), Instant Pot or tiny kitchen (doesn’t need to be fancy), pickup and drop-off to the house if there’s no public transit (just on arrival and departure), and access by agreement to washer/dryer. After living in cities all this time, we’ve been enjoying the longer term stays in quieter places (our favorite so far has been a horse farm right outside Prague), and our friends have also been inspired to “live differently”. Wishing you and your family all the best.

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    1. Thanks so much for this perspective. This was so interesting to read! We have most things set up to be able to offer month-long stays. The only thing is that we would have to let the guests come into our house. We will only have a hotplate for two saucepans and a microwave of course.

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22. Hi from England. I recently retired early. Im 58. My husband retired at 63 a few years ago. Dont worry about what you will do with yourself when you do retire. Im sure your time will be filled.
    When I started planning much nearer to the time I wrote lists of things I would like to do. I thought about things Ioved to do when I was a child and as a young women. Before I knew it I had a long list. So the things I do now aside from babysit and see my elderly mother every day. I do lots of gardening. Leaning heavily towards permaculture. As does my husband. I knit alot. Cook everything from scratch. Walk the dog. Cycle. Go to yoga and swim. We love camping. We also live frugaly and sustainably. We dont needs heaps of money and we are perfectly content with what we have.
    We did make sure that all major maintenance jobs were done prior to retirement and we bought a new to us car. So we do feel well set up.
    So just know that you will have lots of creative things to do when the time comes and enjoy your time. Good luck

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    1. Thank you for those reassuring words, maybe I could stress a bit less about that 😊 Any way my first goal is just FI when I’ll be able to work with projects that do not have to make that much money. It sounds like you have been able to create a very nice & balanced life in retirement !

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23. Great case study, Jen! My husband is a Finn and we’re currently on vacation in Finland! The nature is amazing, the country is so peaceful and quality of life is too. Amazing that you’re able to work 80% and have an interesting job where you can actually leave the office after a 7.5 hour day 😃 As a mom with two young kids I can only dream about this!

    Several thoughts from your case study: 1) your heating costs are really high – are there other ways you can adapt/retrofit your home that will generate a positive ROI? 2) great idea with the rental! Was wondering – do you have a family cottage you go to for 4 weeks in the summer like many Finns? If so, could you rent out your home during some or all of this time? Sounds like it’s in a brilliant location for tourists. 3) could you put the rental business income under your partner so the marginal tax rate is lower? 4) it sounds like the Finnish tax system is quite clear/straight forward but would it make sense to talk to a tax accountant especially when setting up a side business to make sure you’re managing your investing and tax planning efficiently? 5) tax on dividends is lower that any other tax in Finland (25.5% I think). Can you design a portfolio that is more heavily weighted in dividend generating ETFs? 6) Would you consider a family adventure for a couple of years later on in Switzerland or Norway for example where incomes are much higher? This might supercharge your savings and capital gains in Switzerland are tax free. 7) this is little but with a large property and berry bushes, fruit trees, and garden your food expenses might be a bit lower in the summer. 8) your car expenses seem pretty low but would you be able to manage with just one car? 9) does it make sense to pay down your mortgage when the interest rate is below inflation and way below what you could make in the markets, even after tax? 10) if you got into real estate, other than for generating passive income, I’d be a bit worried about the housing market. We’ve read that the housing prices have been dropping in most places other than the greater Helsinki area and that the shrinking birth rate, super low immigration is exacerbating this. Might be better off with a financial portfolio. 11) taxes are so high, on investment income as well, that I can’t help but think that the best approach would be to FI and then scale back on work and just do part-time stuff that makes you happy instead of a full break from work and living on investment income. Could you set yourselves up over the next decade with skills that would allow you to do your own thing/work part-time?
    Most important I think is that you guys have designed a beautiful life for yourselves that is well balanced, healthy and allows you to enjoy this precious time with your family!!! Hopefully this takes the pressure off of wanting to FIRE quickly! 🤗 Wish you all the best on your journey!

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    1. Hannah, Nice to hear that also you have a Finnish connection! You probably understand my situation quite well then. And thanks for taking so much time to think through my questions and comment!
       1) Yup, very high heating costs. However, it is both heating and electricity to the house and the cottage. And we had a cold and long winter this year. Still it would be nice to decrease them even more, we already have an air-source heat pump (air heating water that circulates in our house). This is better and more efficient compared to the old oil-heater this house was built with. We know that one problem are the doors, that are not tight enough, and as you can see this item is planned to be done in the near future. Geothermal heating is a bit better than our current system but all the drilling and new apparatus would cost somewhere in the region of 20k-30k. The ROI is not that high, the electrical bill will go down, but not that much that we see this as a viable option.
       2) We are like the only people in coastal Finland that don’t have a family cottage 😀 This house is now like our cottage as we live right by the sea.
       3) This is a good point. We need to look into what the most favorable set-up is. We might even start a business for this. 4) Yes! We have a family friend that is an accountant and I think she has the same kind of set up already. 5) Yes, it is 25.5% in practice for sums under 30 000e (annually). If I purchase Finnish stocks and have a specific new investment account type I do not have to pay any taxes on the dividends if I re-invest them. It is only when I take the money out that I have to pay the capital gains. 6) At the moment we are not looking into living abroad, or anywhere else than where we live. And the much higher living expenses would eat into the profits of living there. Both countries are beautiful and nice to live in though 🙂 7) Yes, that is still a small but 🙂 Maybe next year I will have time to sow more things. Hopefully our apple trees will give us apple juice for the whole year. And we do not buy frozen berries from the grocery store in the winter(soo expensive!) 8) No, but in Finland there is a minimum share of how little you can amortize and we are at that level. However, it is possible to ask the bank to only pay the interest for a while, I do not know if one needs a reason for that. We have not thought of that. Our loan payments would go down to like 100 euros a month by doing that! 10) There is a risk for that for sure. Where I live though the prices have been stagnant for around 6-7 years and now they have started rising again. Renting out a summer house could be a good alternative to mitigate this risk, as that demand probably won’t disappear. Especially if one has a nice one, and I like home improvements of interiors 🙂 However, we are not in the market to buy anything now exactly. Let’s see how I feel about land-ladying next year when I have more experience. 11) This is a good point. As I have been writing this case study and participated in it a thought of starting to work part time next fall has come up. Even though we have high taxes though, working 80% would net 700-800 euro less per month. That is a significant pay cut. I know we can make it work easily though. At the moment it is nice that both of us make the most we ever have. We’ll continue with that for a while. And my husband is going back to 100% next year.
       Thanks again for all your comments!

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24. I just want to mention that most Americans don’t make much money. You seem to think your income is significantly less but you’re making more than most college educated Americans in normal paying fields (not tech or other high paying fields). Plus you have much lower healthcare and education costs.

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    1. Alysia, You are absolutely correct. I am just looking at this from the point of a tech person. I have already had a pretty long an successful career and I make a lot more than most people (also very happy with my pay!), also in tech. But my point was just that if I worked in the US I would probably be making double or triple from what I am making now. However, at the moment I want to live here, not in the US 🙂 If we look at people making minimum wage, they are (probably) better off here and fewer people risk loosing it all. Each system have their perks but for me it is more important to have safety and security than the super-high wages you can get in America. Maybe this did not come through in my text as I wanted to. So in life I am actually content, but would still want to reach FI sooner than later.

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25. Jen –

    Congrats on your journey and accomplishments so far! My comments relate specifically to starting a STR. We closed on our family cabin Feb 2020 (!!) and started renting it Sept 2020 for an additional income stream.

    My advice is to keep it simple. Use one platform to start, well-meaning friends advised us to advertise on Airbnb, VRBO, etc. But the truth is you only need one person or family to rent out your cottage each week/weekend – not everybody. We only use Airbnb and have sufficient bookings.

    When determining price I highly recommend looking into airDNA to see nightly rates for similar properties in your area. Airbnb has a “smart” price tool that initially set our nightly rate super low due to lack of rental history. After two months we increased our nightly rate to be aligned with airDNA data and now the Airbnb algorithm has caught up! We now book for double what Airbnb initially recommended.

    Since you are near water, make sure you have appropriate insurance on your home.

    The most important thing is to have a spotless cottage. It’s great that you can flip and manage yourself as it’s in your own backyard! Guests expect a sparkling clean place and will reward you with a 5-star review and super host status.

    Start with your cottage, keep it simple, and as Liz said, see how it goes the next 6-12 months and expand from there! Best of luck to you and your family 🙂

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    1. Thank you Ashely, We actually finished the cottage this Tuesday! I put it online Wednesday night and today Saturday we are getting our first guests, I am actually waiting for them right now. It is nice to hear that one platform is enough. And it looks like that as we got our second booking for later this month yesterday too. I have not heard about airDNA, I¨ll have to check out if they have data for Finland as well. We also noticed that the AirBnB price suggestions were really low! The first renter is staying 4 night and the second 2. So, our prices,that were higher than AirBnBs suggestion.
       Yes, we¨ll try to start simple and build on what we have.
       Thanks for you input!

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26. I don’t have a lot of investments, but I have an employer pension. I’m not doing a lot of concrete things to build up those pots yet, but I think it might be an idea to exclude state pension from your calculations for FIRE. That way the state pension is a bonus for fun things, so you’re not in danger if state pension age is moved considerably. My mum (we’re in the UK) has a tiny employer pension and tiny state pension. She has a life she’s enjoying but being dependent mostly on state pension is hard.

    I have a chronic illness too, and you may want to consider whether you will be able to work the hours you think as you get older. Will health mean you can only work xx hours a week, will expenses go up, will you need to change the property (wet room not bath), or pay higher travel costs (can’t physically manage times for cheap flights, can’t travel economy)? Same true for your son and his health issues. Boring and frustrating, but my health needs currently cost around a third of my net salary each month, even with basically free standard healthcare. I struggle seeing people investing more than me percentage wise, as I could send a good chunk into a private pension if I weren’t ill!
    Best wishes

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    1. Victoria, Yes, I have decided to exclude the pension from my FIRE calculations as I am eligible at the earliest at about 67. And I wont be working that long!
       I am doing unusually well with my illness, if one compares to others that have it. I know that stress worsens it. Fortunately, I do not think we need to do any special arrangements in our house nor for travel. Our son is fine and if the condition worsens he will need surgery and should be fine if that goes well. I know there is always the risk that one of us would get so ill we could not work, but I see that risk as being as big as for anyone else. And this is a case I cannot plan any more for. If that day comes, we will have to deal with it and change our lives.

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27. Nice to see a fellow Finnish frugal woods reader here 🙂 I recognize many of your thoughts from a few years ago. I had always been conscious of my spending, but when I discovered the FIRE concept in 2016, it was eye-opening. Initially I didn’t have a plan for post-fire, it felt dauntingly far away and I had not properly started in real estate yet. But since then things have started to clear up for me.

    I’ve realized that just looking at the FIRE number and minimizing savings rate does not lead to the right kind of life for me in the near term. We have a 3 year old daughter, we’re still living frugally, but are now more focused on building the investments and planning the future. I’m not planning to go to zero income post-fire and completely disconnect from the workplace social environment, but instead do freelance projects which can be intense for a few months but then have possibilities to have long holidays in between. As you know us Finns have a long 2,5 months school holiday, so I’m planning to be able to keep that as holiday as well so that we could do activities together as a family.

    Regarding Real Estate:
    Like Liz already mentioned, RE requires more work attention than stocks, so you should try it out small scale first before going deep. But it’s also more concrete, and I quite enjoy it, so I’m actually planning the management and purchasing of properties to be the majority of my post-fire activities, together with freelance IT projects that I could participate every now and then.
    We live in Helsinki, and I don’t have renovations skills, so I’m focusing on apartments that are within 1,5 hour driving distance from us.

    For Finnish RE material I recommend you look up Harri Huru’s “Ostan asuntoja” (I buy apartments) podcasts. He interviews RE people from different background, so it’s good for motivation and learning. Then for purchasing units, you can sign up for developers (YIT, Lehto, Peab, Bonava…) marketing lists to get informed when they start taking bookings to new apartments. Couple other companies are sijoitusasunnot.com and asuntoneuvoja.fi, who are purely focused on selling apartments/row housed to investors.
    Instagram has an active scene also. Look up eg. joonatanvoltti (Airbnb), sisujasijoitus (renovations), taloushaukka, suviph, sijoituspomot…
    You can also look me up from FB, Twitter or Instagram and send me a DM if you want to chat more. My name is Lauri Larjo.
    I hope you all the best in your RE and FIRE adventure!

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28. This is a late comment, but I’ve been busy managing my real estate portfolio! (and starting my second career, flower farming), and only now am catching up on some past case studies. Don’t be scared away from real estate investing if you find that you like it. I’ve been a landlady for over 30 years and I quite enjoy it! I meet people who I would never meet otherwise, I take great pride in providing clean and pretty although small houses, and have slowly paid down my mortgages. With inflation now rising it’s great to own assets that tend to increase in price along with rising prices. And if you like to make some of your own repairs and handle routine maintenance that will help you maintain positive cash flow. My best advice is, to however you can do it in Finland, check credit. Do your potential tenants pay their bills? Yes? Wonderful!

    And pay attention to local leasing laws. A friend of mine from France said that no one there rents to anyone without a personal reference due to the difficulty of evicting non paying tenants. If rental laws favor tenants too heavily you may do better focusing on short term, tourist, tenants. But if you are able to collect enough security deposits to cover the time it takes for an eviction in your region then long term tenants are less work. Less work equals you being able to own more properties long term.

    Don’t worry about reaching FIRE super fast. When my nephew first told me he wanted to reach FIRE by age 40 I didn’t know what he was talking about. I did my research, then told him to not worry about the age goal. He is the father of a newborn and wants more children – why work too many hours now and miss time with them? Save, be prudent, live a more modest lifestyle than your income could allow for, and enjoy some of the time on the journey. Life, hopefully, is long past age 40, and balance is important along the way.

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29. Interesting read and the best of luck to this family. One thing jarred for me and was older people being described as a burden. These are the people who brought up this couple and helped created the Finnish state which is, imo, a very progressive country so please remember this.

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