Financial Independence in 9 Years at Age 32 – How Did We Do It?

In this post, we’d like to share with you how we reached financial independence aged 32, in 9 years from the point we moved in together and started working in Germany.

It was 1st October 2005 when I arrived in Saarbrücken in Germany for my one-year Erasmus scholarship, my suitcases mostly filled with large amounts of food from my mum. She was afraid I’d starve so she packed my bags with lots of jars of tinned bean dishes and zakuszka (homemade Transylvanian aubergine salad). Altogether I had about €2000 of which I had borrowed €1000 from my dad. My net worth: €1000.

This is where my life in Germany started. Today, almost exactly 10 years later, we have two kids and are financially independent (I count the date I started working as the starting point of our FI journey, though).

How did we do it? Here’s our story:

So back to October 2005:

At this time I was already dating Mrs W who got a job in Heidelberg. That’s about 150km from Saarbrücken, so we decided to give the relationship a chance.

All I was focused on was making sure I could pay my bills; I had to find a part-time programming job and try not to touch the €300 a month scholarship money for the simple reason that I’d have to pay most of it back if I didn’t pass most of my exams. Luckily being a student in Saarbrücken was really cheap. My 11m² room cost about €120 a month including high-speed internet. Meals at the student canteen cost €1.85 each (those times are over…).

I managed to find two part-time programming jobs and not touch my scholarship money. It was enough to live on but only just. I will never forget the night I took Mrs W for a date to a dancing class that was advertised as being free and it turned out we had to pay €10 each at the end of it. I almost cried. My budget didn’t include that sort of luxury spending.

It was the financially tightest but probably most exciting year of my life. I always had to watch my spending but still managed to have a great time travelling and partying. It was the year I got into the habit of tracking my finances down to the last cent. I had to. I wanted to return the €1000 to my dad as soon as possible. I did that within six months and was very proud of myself. It was a great feeling.

Mrs W already started working full time in August 2005, so she had a slight advantage. 🙂

The year was over. I moved in with Mrs W on the 1st of October 2006. I spent the first week applying for jobs. Then I went for interviews the second week. The 16th of October was my first day at work as a programmer for small start-up. I couldn’t believe I actually had a salary… it was great! My spending habits didn’t change very much though.

Milestones on the Road to Financial Independence

Milestone #1: Becoming Self-Employed

The happiness didn’t last very long though. My work permit expired after six months and… surprise, surprise…the German bureaucrats were not very nice to me. Apparently Germany had enough programmers (bullshit!). The best solution turned out to be to become self-employed. When I started researching I realised that self-employment had some interesting advantages over employment:

  • I didn’t have to pay into the state pension fund: I liked that, that meant more take-home cash.
  • I could work for whomever I wanted: Cool, I could keep my previous customers – more cash!
  • Health insurance was cheaper: Fine by me!
  • It gave me much more flexibility.

That’s exactly what I did. Ten minutes and €20 later I was self-employed. The story is longer but I won’t bore you with the details. I couldn’t believe that it’s so quick and easy to become self-employed in Germany!

And that’s how I was able to stay working for the start-up while keeping my old customers as well. I was still dependent on one company but I was free to work for whomever else I wanted as well!

The next few years were quite boring as far as FI goes. We basically lived a standard consumerist lifestyle. We both had jobs. We didn’t earn very much but much more than we could spend. We had no debt so we just did what everybody else did around us: spending money on shit that we basically didn’t need like new furniture, a new DSLR camera, tech gadgets, more tech gadgets, etc. (Note from Mrs W: The tech gadgets were all Mr W – my hobbies were much cheaper!). We also did a fair amount of travelling, but I wouldn’t count that as stupid expense…we love travelling!

Becoming self-employed was not only an eye opener but a serious kick in the ass as well. It changed my life profoundly and was the major freedom-turbo on the way towards FI. Why?

  • Because I was forced (by law) to keep and look for other customers(working for just one customer is illegal), projects and side hustles. It wasn’t easy but for me it was very exciting and fun.
  • I was forced to use my brainin so many situations where normal employees are on auto-pilot-rat-race mode.
  • I was forced to look forpension alternatives a.k.a investments. Without that, I wouldn’t be here to tell you about financial independence!
  • And so many more reasons… I think I should write a separate post about that at some point.

Milestone #2: The First Side Hustle

Sometime in 2007 I was sitting in my office at the start-up (where I basically spent most of my day) and I thought: hey… I don’t think many people in Romania know about the process of becoming self-employed in Germany. So why don’t I start a business finding Romanian freelance programmers and helping them become self-employed in Germany so they can work for German companies.

I knew how to find programmers. I knew there was a demand for them in Germany and I knew the bureaucratic part (since I’d gone through it) so there was a business opportunity. It worked! I was suddenly a full-time programmer, a self-employment-consultant, a salesman (selling my services) and a head-hunter all at the same time!

I made nice money with about an hour’s work a day on top of my regular income as a programmer until the 2008 financial crisis started having an impact on the job market in Germany. That was it. It wasn’t working that well anymore and we had made enough money (especially with the side-hustle-turbo) to afford a down payment on our future flat…so I just stopped doing it. It was an invaluable experience: a great life lesson that came with a whole host of new skills. I knew I could always go back to it if I wanted to.

At that point we had no idea about FI but we still managed to put aside a huge part of our income to save for our flat.

Milestone #3: Our Flat

This is Stuttgart and we’re talking about the city centre, which means the number of 3-4 room flats for sale was something like 13-15.  Of which normally 10 were overpriced and 5 were absolutely shit and still really expensive.

Anyway, I was optimistic. I was looking for flats every day. I had my instant notifications set up on the property websites. I knew that speed was going to make all the difference and one day, after six months of looking, once day in spring 2009 we found two flats that matched our criteria. Good locations, quiet, fairly new, affordable…the sort of flats that exist in theory but the chance of finding one is close to zero. We looked at both of them on the same day and shook hands (by phone) on one of them the same night – midnight, to be exact, from our bed! I even tried to negotiate and – I still can’t believe it – it worked: the seller went down €5000€! (In that sort of market situation that was insane!)

No, that’s not our house

We put about 50% down and we had a three-room flat with a small balcony in the city centre. Check!

We thought (at that time) that it was expensive. Which it really was back then…but looking back at it now, after prices have gone up by at least 50%, it was a bargain.

We moved in a week before our wedding so that we had access to both the new and old flats at the same time. That’s very handy if you have to provide accommodation for wedding guests from lots of different countries. The plan worked well.

Milestone #4: Rental Property No. 1

What do you do after you’ve bought your home and furnished it? Exactly! You get bored and start looking for more flats: rental properties!

I knew that since I didn’t pay into the state pension fund I had to do something to make sure I wouldn’t have serious problems when I get older and can’t work anymore. Mrs W was employed all that time so her pension was sorted. But what about me?

So, instead of playing video games every night, I went online shopping for flats. We went to have a look at some, started learning about the market, prices, ROI, etc. At the same time, after paying the monthly mortgage on our home (which was hardly more than our rent before) we still saved quite a bit of money.

After about a half a year (in early 2010) we found a fairly new two-room flat (50m²) with a balcony and a parking space and a very civilised tenant already living in it. We didn’t know much about rental properties but after running some numbers and asking some banks, property consultants (not always a good idea btw…), we decided to buy it.

Our consultants advised us not to make a down payment (we had about €30,000) but to get a 100% loan from the bank and invest our money somewhere else. Whether that was a good idea or not is highly debatable, however, that’s what we did. Again: we weren’t financial experts (nor are we now) and yes, those advisers got a big fat commission from us.

By mid-2011 we still didn’t have any idea how we should invest our €30,000 that we didn’t end up using for the down payment and we kept on saving money, so we just put all we had (minus a small buffer) in a five-year fixed-term savings account with a 4.25% guaranteed interest rate. No, we hadn’t heard about the 4% safe withdrawal rate.

Milestone #5: Rental Properties Nos. 2 and 3

It was mid-2012 and we were constantly looking for flats and learning about property investing. By this time Mrs W was also infected with the investor virus. We found another 50m² flat on the market at a very good price. We made an appointment with the seller (a building company) to have a look at it but they sold it a few days before the viewing. We were angry and I called the estate agent to give him a piece of my mind. I asked him whether they had any other flats for sale. It turned out it was a good question to ask – they had several almost identical flats for sale in the same building. BINGO!

I remember the conversation with Mrs W where I asked her, “Hey, should we buy two flats? “ So we did. It was a BARGAIN!

We made a 20% down payment on each flat. Both already had tenants in them so basically we didn’t have to do anything to them for a good while.

At some point one of the tenants moved out, so we furnished the flat and started our experiment with furnished rental properties. To keep it short, it was a very good plan. We’ll write more about it in a different post.

Milestone #6: Rental Property No. 4

We just couldn’t stop. Our minds were focused on property investing and we could tell in seconds whether an offer was worth even properly looking at.  We found another bargain in mid-2013. Same setup: about 50m², two rooms, central location, 20% down payment.

It was already furnished and all we had to do was freshen it up a bit. We rented it out fully furnished expecting the tenant to move out as soon as he had time to properly look for a cheaper place. Turns out he didn’t bother. Two-and-a-half years later he’s still there, happily paying his rent.

Milestone #7: Rental Property No. 5

In early 2014 it was time for a new investment: another bargain. Only this time a one-room place. (We’d realised after running numbers on so many flats that the smaller the flat, the higher the ROI.) The flat was already half furnished and didn’t need any work. It took us a day to find a tenant.

The ROI is fantastic! Small places have great ROIs. That’s a general rule (although it’s not the whole story).

Milestone #8: The Napkin Plan

While we were in the process of buying rental property no. 5, went for dinner at a Chinese restaurant. It was one of those rare occasions when a set of grandparents was visiting and we able to look after our baby daughter for the evening. It felt sooo good to have a break! And such breaks have to be used wisely. We did our best.

I got a napkin, we asked the confused waitress for a pen and we started writing numbers down. Did I tell you I love numbers? We still have that napkin btw…

We wrote down two questions:

  1. How much monthly income do we need to cover our expenses?
    Answer: €3500 net a month (just a rough estimation based on current and planned expenses)
  2. How much net rental income will we have once all the flats are paid off?
    Answer: €2713,75 a month

So we had a gap of €800 a month.

At the beginning, my plan was to have an income that would replace a pension. As of the napkin plan, we were officially on the road to FI.

Yes, it’s overly simplified and we needed to factor in many, many more things, but seeing the numbers written down had a huge impact on our journey to FI.

We now have a much better idea of what our estimated post-FI expenses are going to look like. We’ve been track all our expenses in detail for years now. That’s crucial!

Milestone #9: The Online Business – Side-Hustle

Around the same time (in early 2013) I started a website as a hobby. It quickly started generating income (some passive and some less passive). Then I started another website. Since then they’ve grown so much that in 2015 that income alone could have covered all our expenses. It’s not all passive, but most of it could be outsourced.

It’s such a good feeling to get advertising orders or ad income while playing with the kids or sitting on the sofa sipping a glass of nice red wine.

That was a big surprise and an eye-opener. It’s like building a money-making machine. My initial investment: €0, but quite a lot of time, most of which I really enjoyed!

Milestone #10: Switching to FI Mode with F-You Money

At the end of 2014 I realised I’d been working for mostly the same company for eight years. I made a decision: next year I want to work only 100 days for them. I want to use the rest of the time for my family, for my website that had great potential, and for giving online marketing consulting for short projects with a much higher hourly rate.

With the power of F-you money, I did exactly that. And it worked a lot better than I expected, basically catapulting us into FI!

Mrs W was on parental leave until the 1st of August 2015. When we looked at our simulations in early summer it was clear to us that it didn’t make any sense for Mrs W to go back to work. So she quit her job and became self-employed. Freeedoooom! …Kind of…

Mrs W now works a few hours a week on short projects and is learning about the benefits of self-employment. Managing the household, meals and two very young kids isn’t something that should be done “after work” or “when I find the time”. They’re THE most important jobs in a family. She’s amazing at it! Especially since the “job stress” is out of her life.

Since then we’ve both been at home and we’ve switched to our definition of FI mode. At least the first stage of it. It’s great!

How Are We FI when We Still Have Hundreds of Thousands of Euros of Debt?

We do actually have lots of mortgages left. We are allowed though to make extra payments each year. If we pay the maximum allowed extra payments, then we’ll be debt free by the end of 2019. So how can we say we’ve reached financial independence already? Well…we already have the money for all the extra payments plus all our expenses for the next few years almost entirely in cash or in the stock market. So basically if we stopped working now and our passive income streams continue to generate income, we would still be able to cover all our expenses until the rental income kicks in.

Thanks to a tool called Excel (Heard of it? It’s great!), we can simulate different scenarios where the worst case is good enough for us. Plus with every passing week, and unexpected income hitting our account, that worst case scenario is looking better and better.

Sorry if we disappointed some of you with the fact that we’re not investing much at all in index funds (ETFs) and stocks or building up a dividend strategy. Sorry for not posting a sophisticated portfolio and a monthly stock performance update. We do things differently. I explained here why we haven’t built our financial independence strategy on the Safe Withdrawal Rate.

Actually, we do play with stocks and ETFs but we do it on a much smaller scale at the moment and our FI is not dependent on that. We do however plan to invest more in ETFs in the future since we’re most probably going to keep earning more than we spend and we don’t plan on buying any more rental properties. All the surplus is going to go into index funds unless we come up with a better idea.

Passive Income Is More Important Than Net Worth

The goal is to cover our expenses through passive income. Net worth is not part of the equation. What is relevant is how much of our income is passive. You can have a net worth of next to nothing, but if your regular passive income covers all your expenses, you’re fine! That’s why I encourage you to build up a business first of all rather than wait until you can save a half a million (in index funds or rental properties). In our case, we more or less accidentally did both. You can do it too!

Enough text. Here some numbers:

Some explanations:

  • Our expenses are higher in 2016 and 2017 because we’ll pay more tax on our higher income.
  • The extra mortgage payments are eating up all our current passive income, which ends up negative until the end of 2019.
  • In 2020, BANG, the rental income kicks in and that’s where the magic happens!
  • All the red stuff is reserves we could virtually use up…but in reality we won’t touch much of it since we’ll keep earning.

Why Did We Invest in Rental Properties?

We did invest a lot in rental properties but we did it because we think we found the flats at very good prices and we didn’t have a better idea. Today it’s a different story. If we started today we would probably not invest in rental properties at all since the prices have gone through the roof. So please don’t go crazy and buy the first flat you find! Chill, and calculate the ROI! Always! Ah…and loooocation! More on property investment another time…

So, this was a short version of our story. If you want, we’ll write about some of the points in more detail. Feel free to ask.

Should we invest our extra money in the stock market rather than paying back our mortgages ASAP? We’d love to hear what strategy you’re using to reach FI. Or, if you’re already there, how did you do it?

We’d love to read your comments!

  • attila

    Thanks for sharing this story, it is really inspirational! I would be glad to hear more about the following things (maybe giving you tips for further posts? 🙂 )
    -freelancing (how hard was it to find customers, did you always have projects?)
    -side business (how did you find out the business area, did you do validation/research, what did you have to learn to it)
    -your difficulties and experience with landlording and tenants

    I am asking these since you did exactly what I want to pursue as well. I am also an engineer, however not in SW – this might make my way to freelancing a bit more difficult. Also, I have business idea (since a long time) and it might take some time to build it up into a -rather- passive income. So it would be really interesting to hear your thoughts about freelancing and side businesses.
    Regarding the RE part, I am planning to buy and rent similar sized flats in a small town in Hungary as you did. However, handling rental properties remotely (e.g. from 600 km distance) seems a bit complicated. My parents are still living in that town, but I do not want to throw the complications of the tenants onto them.

    Thanks for the post once again! 🙂

    • szia Attila!
      thanks for your feedback and comments. It’s good to see that I’m not the only “crazy” hungarian 🙂
      Indeed these are topics for further posts, but I’ll still try to answer them.
      -freelancing (how hard was it to find customers, did you always have projects?)
      In the online marketing, web programming business it’s not difficult to find customers. I had 8 years experience when I properly started feelancing (1 year ago exactly). If you go out there (professional networks) and let people know what you’re doing, they’ll come. I also did adwords and had an online chat on my page connected to a mobile app. Everytime somebody visited my page I got a buzz on my phone and started asking them how I can help them. That’s how I found one of my customers. I didn’t have many visitors. I paid 6-7 euros per click :). All in all, the main source of customers were professional networks (i.e. linked in and such) and people in my network spreading the word.

      -side business (how did you find out the business area, did you do validation/research, what did you have to learn to it)
      🙂 “market research” …good one! You overestimate me. So, the answer is: no, I didn’t care who else is doing what I wanted to do. I grabbed the phone and started calling potential customers (headhunting) see what the feedback was. After 50 calls or so, I had the feeling that I could do some business. So I did.
      I am not a perfectionist. I use the pareto (80/20) rule in almost everything I do because I don’t have patience. I didn’t have to learn anything to call potential customers and ask them whether they are interrested in what I have to offer. Anybody can do it. Just don’t give up after the first lead that tells you to f**k off.

      -your difficulties and experience with landlording and tenants

      Short answer: overly positive. A lot better than I expeted. Although recently one of my tennants dissapeared. Luckily her dad paid the rent. More on that in a new post. Renters in Germany tend to respect the law. In Hungary that might be a different story. It would be to risky for me. We wanted to buy a flat in Budapest, but for reasons you mentioned (distance), we gave up the idea.

      To your plan: you seem to know what you’re doing and I’m sure you won’t jump in risky RE. The question is WHERE do you think RE prices (and rent) will increase. The ROI has to be good. The price of the RE is only relevant in context. Only because it’s cheap, I would not buy. But I’m not a real estate expert. I might be just lucky going with my gut feeling.
      If i started again today, I would probably not go much into real estate. Too much effort, research, time. I would start a business with only investing my time.

      One more thing: just because your field is not so good in becoming self employed you should not give up the idea of learning something new that has potential. Just forget your diplomas for a bit and look around. What would you learn? Youtube can teach you almost anything sometimes literally overnight.
      Sometimes I am invited to (massive) companies to hold workshops. One time they wanted me to talk partially about a topic I had not much idea about: “google webmaster tools”. Literally the night before I watched some youtube videos about it and prepared my slides. I didn’t become an expert but after an hour I know a lot more then they did. They were just lazy. And mostly these sort of people are lazy. They rather pay somebody a f*ck loads of money to come around and talk to them rather then using Google. Luckily it wasn’t about brain surgery 🙂

      • Mathias

        Hi there,

        I would love to learn more about valuing real estate. What is your minimum ROI you’re looking for and how to your calculate that?

        • Hi, the ROI (total cold rent/total price including expenses) of the flats we bought varies between 6-10%. Before we bought the flats we estimated roughly how much we could ask for it. This is just a very very rough number that just helped us compare different flats before we look into it in more detail. Obviously there are many more parameters (costs, tax advantage etc) that needs to be taken into account. To be hones we didn’t do all the detailed calculations. We just used the rule of thumb and our gut feeling.
          I’ve found an excel sheet somewhere which, after tiping in some key values it calculates in how many years is the flat paid off (by itself). We used that as well.
          So, if we had the feeling that the ROI is good, the prices is not crazy, the investments needed are manageable and we’ll find tenants for it, we got it. We ran some numbers before we saw the flat, and when we saw them, we had minues to decide. Good deals don’t wait.

          • Mathias

            Thank you for the details. Other blogger seem to do much more complicated calculations, of course they are based in the US and I don’t think there method this is easily transferable to Germany. I’m looking for quite some time for buy to let real estate here in Hamburg but it seems that currently I’m one of many with the same idea.

            Some more questions if you don’t mind. For the ROI calculation did you take the transaction costs (like tax and commission for the agent) into account? And is the ROI based on the current rent or on the rent you are think you are able to achieve? Obviously you should be able to command higher rents with furnished apartments, how much more is it percentage wise when you had to guess?

            Sorry for being nosy, if it’s to personal just ignore the questions.



          • I don’t do complicated calculations 🙂 When I look at ROI, I alway base it on the total cost including all the fees/taxes. The planned revenue is based on the rent I think I can ask for unless there’s a tenant in it in which raising rent is very regulated in Germany…so I just use the current rent.
            The rent for an unfurnished appartment here in Stuttgart is about 11-12 euros/ m². If it’s furnished, 15-20 is realistic.

          • alemao

            Hi Mr. and Mrs W.
            I discovered your blog recently and am now going through all of your posts. I liked this one particularly, it’s highly motivating for my own path to FI, which ist partly traced already…and I’m very confident to reach FI by 2025!
            I would like to write a few words on RE experience. I own three flats already, so the foundation for FI is laid.
            You write that you ROI was 6 to 10%, which is great, however, that figure is partly misleading. If ROI was “only” 6 or 10% I would not have entered RE Business. In fact, financing your investment creates a massive leverage effect: the less you invest own capital/equity, the higher your return – ROE in this case. A 100% financing with you only paying the charges (property acquisition tax, notary, and registry), can bring up to 40 or 50% of return – try to make that in the stock market! If you get the charges financed to, your ROE is unlimited, since you produce cashflow with an investment you didn’t pay a dime for – and your tenant even pays the whole mortgage. You see, it doesn’t take (your own) money to make money! 😉
            However, I’m sorry to disappoint you on another subject: back in 2005 the writing-off rate was cut from 4 to 2% (btw: the rate is only applied on the construction itself, NOT on the land), since then, writing-off rarely lowers your income tax, especially when taking into account the extremely low mortgage costs we see at present. However, the long-term effects are enormous, since somebody else is paying your “savings plan”. And return will always be higher than the additional tax burden!

            Love to read more of you! Regards

            (edit) P.S.: I highly recommend: “Erfolg mit Wohnimmobilien” by Thomas Knedel; I’m sure you’ll see a lot more clearly after reading it!

          • Hi there and thanks for stepping by.
            About the ROI. The ROI i wrote there is the total cold rent/purchase price as i explained above. Of course, you are right, it has nothing to do with the roi of the invested capital.
            Writing off rate: we pay 2percent as well. Did I write something else somewhere?
            The AfA does have a huge effect on your taxes. A family of 4 has a tax free income (steuerfreibetrag) of about 32000/year. If you have let’s say 8000eur of AfA per year and you live mostly from your flats, you can have 40k income without paying any tax. Our expenses are much lower.
            Good luck on the way to FI!

  • Ms. Canadian Expat

    Wow, great post and thanks for sharing!! Really valuable stuff, especially for us expats-in-Germany. 🙂

    The part where you say that freelancing changed your mindset significantly is what I am feeling now too. I’m still in the process of getting set up, but there is so much more to think about now that I’m not employed in a big company. It’s a bit daunting for me, but also exciting and fresh. I feel like the possibilities are more in my control, and that I will have so much more creative freedom in the work that I do, and don’t have to stick with something just because that’s what my department does. Not to mention that I think going freelance will also catapult me into ER sooner, or at least provide the flexibility to dip in and out of a retirement (a semi-retirement!) if desired.

    To answer your question about paying off the mortgage vs stock market, why not choose stock market for some diversity? Especially if you’re already cash flowing positively. Never hurts to get another passive stream. 🙂

    And, that zakuszka sounds delicious!

    • Hi there! Good to see you feel the change. It will get even better!
      In terms of stock market. The first time I invested in the Stock Market was August 2007. I saw ever chart going upwards. Seemed like a nobrainer. Then we all know what happened. Now in 2015 I have the feeling I have a Déja Vu. So the plan is to get rid of most of the mortgage, and by that time hopefully the market lost about 50% of the value. I say hopefully, because I think the market overvalued at a level that has nothing to do with the reality anymore. It’s just my humble opinion. At the same time I do speculate on stuff that I think is undervaluated.

  • Ms. Canadian Expat

    P.S. It’s so NOT disappointing that you invest in real estate more than stock market. Especially German real estate!

    Is putting 0% down called fremdkapital? And why (our are you?) regretful for going this route and not putting a downpayment for some of your flats?

    • I am not disappointed on going deep into RE. But today (2015) with the stuff I know now and with the current prices, I would do things differently and focusing on my business. RE is solid here.
      Putting down 0% means what it looks like: you get the all the money (inlcuding fees) from the bank without you taking any money out of your pocket. We only got 1 flat like that and we’re simply not sure whether that was the best decision for us at that time, in those circumstances. I just simply don’t know. It’s too complicated. And I’m shit at maths. 🙂
      There are a few factors here that makes things more difficult to calculate.
      Even though we didn’t use any of our money to buy that flat:
      – we can put the interest each year against your tax, which is quite a sum
      – you can put 2% of the RE value against your tax each year
      – the tenant is slooowly paying back your principal
      So, if you have a high income, you could virtually buy a flat with 0% downpayment for the only reason to pay less tax. Some people do it.

      • Ms. Canadian Expat

        I had no idea mortgage interest could be written off here. That’s some food for thought. My husband is more interested in RE than I am so I will talk to him about it. It does take a long time to find something decent in a big city though. We had been looking for a year and almost bought a primary residence earlier this year. Luckily it fell through as we had to move 40km away. I have a feeling if we bought a primary res, like you we would have caught the RE bug and wanted to invest too.

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  • Wow! Absolutely love your story. It’s just more prove, that everyone can make it to FI if they just go for it.

  • Dman

    Congrats on your FI and ER! I quite like the different perspective and it is applicable especially as I am an Auslaender in Germany too. Can you shed some light on how you account for vacancies? How do you find good tenants? Isn’t the law here in Germany very renter friendly? What happens, say, when a tenant doesn’t pay their rent?

    • welcome Dman! and thanks for your comment! This has to be a topic for a series of posts, but in a short format:
      – how do we account for vacancies? since the flats are quite central in the city and prices are relatively high, people are mostly very thankful to be accepted as tennants in the first place. Competition amontg tennants is very high so vacancies are very low. We only had 2 weeks of vacancies only in one of our flats because we had to do some renovation after we bought it. Apart from that, no vacancies. We bought are first flat early 2010.
      Every flat is cashflow positive after we pay all the expenses, mortgage etc. That cashflow is used to create a cash buffer for vacancies, unexpected expenses, legal insurance etc. That buffer just grows and grows every month so that we sometimes just take a part of it out and use it for something else.
      – How do we find good tennants? We don’t have a magic technique and we didn’t only have good tennants (the rent however was always paid). Over the years you just develop a gut feeling I guess.
      – Isn’t the law here in Germany very renter friendly? yes it is. And you have to be careful who you let in. The statistical chance that you have a shit tennant is well under 1% though…
      – What happens when, say, a tenant doesn’t pay their rent? Legally that is not enough in Germany to put somebody on the street. We didn’t have such a case yet but that’s why we have a legal insurance for the flats. We hope to be in a better position to act that way. But again, the chance is very very low.
      Another important thing here is that I rather have 5 small units than 1 big one. The probability that we have problems in 2 (or more) flats at the same time is almost 0. That’s enough for us.
      And there’s the Kaution (Deposit). That will account for about 3 rents or event 4-5 months worth of mortgage payment. That’s a good buffer as well. We tend to ask for a high deposit. If people have the money, it’s also a sign that they can afford the rent. If they try to negociate on the deposit, it’s a very bad sign. We’ve lerned a lesson here 🙂

  • Mr. and Mrs. W,

    Very interesting read, thanks for sharing! Love finding another European blog, especially when its owners are already FI. I think you guys are the first ones this side of the Atlantic.

    Rental properties aren’t my thing, but it’s kinda crazy how you figured the entire FI thing out on your own “by accident”. Keep it up!

    Looking forward to read more.


    • hey hey! Weclcome NMW! I don’t thik we’re the only people FI in Europe 🙂 There are thousands if not tens of thousands who are Fi but they don’t know. Many people don’t realise what life is all about.
      Well, w didn’t really figure “the whole FI thing” out ourselves. We started it and then we read some Rich Dad Poor Dad, MrMoneyMustache, (even Donald Trup, to have a very different view as well :)) and then things get pretty clear!
      Good luck to you and loking forward to reading more from you too!

  • “Mrs W already started working full time in August 2015, so she had a slight advantage. ”
    Do you mean 2005?
    Great story. Congratulations! I’ve always thought that only from the US you can read stories like that. You had a lot of luck, a lot of talent and kind of a good timing. Interesting that you reached the FI without ETFs. Small flats aren’t that bad, but at the moment they are very expensive in the area of Stuttgart. I would pay the depts first and then look what options you have with your additional money. Happy new year!

    • thanks for stepping by! And of course you’re right, we meant 2005. Looking forward to reading your blog as well!

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  • Ed Super

    Wow, ihr seid genial, bin auf euch durch das Buch v. Gisela Endres aufmerksam geworden.

    Wir sind auch auf dem Weg zur finanziellen Feiheit – derzeit haben wir (meine Frau und ich) insgesamt 4 Wohnungen (3 davon werden vermietet), die nächste folgen bald – Lage der Whgen. ist Stuttgart und Umgebung.

    Ihr habt das geschafft, woran wir noch arbeiten und arbeiten lassen 🙂

    Grüße, Eduard

    • hey Ed. (i’ll write in english so the others understand)
      It’s good to hear that you’ve found us over Gisela’s book. It’s good to know that more and more people are reading it. Looks like our ~25 pages were not a waste of time.
      Congrats to your flats! You’re on the right path!
      We’re still in stuttgart a week or so, so if you’re up for a beer, you know how to get in touch with us!

      • Ed Super

        Hey Mr. W thanks for your quick respond – I really glad to know someone who already did the similar steps and achieved his / her “GOAL” 🙂

        Are you only this week (19) in Stuttgart?


        • yeap

          • I’d like to ask you for a beer at Thursday the 11th of May at 6 or 6:30 p.m. in Stuttgart – location up to you?


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  • theFIREstarter

    Excellent to read the full story!
    Sounds like you made lots of great decisions along the way to turbo charge your time to FI. I wish I’d been so switched on at such a young age with the rental properties thing but it was hard enough to save up just a deposit on one flat!

    I agree that the horse has bolted with house prices, well it has in SE England where I live anyway and I don’t think I could stomach buying somewhere far away.

    I think the business idea is the best path for me but I haven’t really thought of anything decent recently to get going with. Need to get brainstorming 🙂

    • thanks for stepping by! Don’t worry about your past decisions (or lack of them). Look ahead. If you’re seeking ways to start a side hustle that’ll generate passive income with little time invested, you will find things. It’s justa question of time. It’s all about goals. If you set yourself a realistic goal, you’re very likely to reach it. Good luck!

  • Florian

    If you had to start all over again, what would you invest in? You already mentioned that rental property prices went through the roof but I am not a fan of ETFs either. Are there any other options?

    Kind regards

    • Hi Florian!
      Indeed I probably wouldn’t invest in real estate in Germany, at least not in a big expensive city. The numbers just don’t work. Instead I would focus a lot more on building up a (partially) business that I enjoy. I would then invest the money either in RE in eastern europe (maybe with AirBNB) or, if the market is realtively cheap, I would put a good part in ETFs.
      Starting a business is a road that mos tpeople igner and are afraid of but it has the highes potential and can catapult you in the shortest time to FIRE.