SavingNinja has published his next Thought Experiment. Here’s this month’s question: “You wake up one rainy morning and after checking on your accounts you find out that you’ve been ‘wiped-out’ by a cybercriminal. You’ve lost all of the money and assets that you’ve ever owned and you can’t get them back. What will you do?”
Well for starters, I would probably freak out briefly due to the shock of it all.
Ok, But What Would You Do Then?
In short: nothing.
Seriously?!? WTF?!? Please Explain
Mr W still gets to keep his online business. The company accounts are empty but the portal is still online and his customers are still there. The portal generates enough income per month to more than cover our current expenses.
At the moment we don’t touch that money, living instead from the rental income from our properties in Germany.
If we lost all our rental properties and investment portfolios in Germany, we’d simply start living off the income from Mr W’s online business. We’d withdraw enough to live on each month and it would be taxed at 15%.
Admittedly we’d have no money to cover expenses until the next customer paid, but that would only be a matter of days since customers pay throughout the month.
Even assuming we’d have to survive for two whole weeks things wouldn’t be that bad. There’s enough food in the house to last us months. We have enough clothes to wear. If we have to pay any utility bills in that time we could borrow a couple of hundred euros from friends to tide us over and then pay them back as soon as the next customer paid.
But What About Investing?
We could also take extra money out of Mr W’s online business and invest it in ETFs and/or real estate to start rebuilding our investment portfolios.
We’d never get back into the real estate market in our former city in Germany because it’s at a ridiculous high at the moment and it’s just not worth it. The real estate market in Timișoara is also high at the moment but it’s not as bad as in Germany.
Sounds Great. What’s Not to Like?
I’m fine with living off our rental income because it’s just as much mine as it is Mr W’s. I paid my way 50-50 in our German real estate investments except for the last two flats, which we bought after I took a massive pay cut so we could have kids. For the last two flats I paid one third and Mr W paid two thirds.
I’d have a problem with being 100% financially dependent on Mr W and his online business, however. It’s good to know it’s there as a safety net but I do have my pride and ultimately I’d want to have my own source of income.
Luckily since we’d still be FI even if we lost all our current investments, I’d have the flexibility to start earning money if I chose to. I’d start my own online business. I have some ideas but I’ve chosen not to go down that road at the moment since I have other priorities. I’d have to reduce the amount of time I spent on other projects such as FIREhub, but we could find some volunteers to help out which would free up my time.
Initially I’d supplement my income by picking up freelance translation work from higher-wage countries. I could easily make €500 a month doing that on the side. That would give me some breathing room until my online business was up and running.
This is something I may even do at some point anyway. Once the kids are both in school I’ll reassess my priorities and see if it’s worth having a crack at online businessing (that’s definitely a real word btw).
But Mr W’s Online Business Could Go Tits Up
True. Unlikely, but true. In that case we’d have to get creative. We could cut out all non-essential spending. We could start eating only what we grow in our own garden. I could pick up as much freelance translation work as I could get to cover our expenses while Mr W builds up a new online business (he has loads of ideas already). Then once Mr W’s business was up and running I could start building up my own online business and gradually cut the freelance translation work down until my business covered my half of the expenses. Whatever happens, I reckon we’ll be ok.
Well, that’s my two cents on the matter. It was actually quite reassuring to write this post. Our worst case scenario isn’t actually that bad. Oh, and it was really fun creating the image for this post!
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