Welcome to the Route 2 FI interview series. I’m starting this series to get inside the heads of people that inspires me on my way to Financial Independence.
Today’s guest is Loui from WannabeWalden.
He’s a young FIRE-seeker at age 28.
Loui has some really interesting ideas that most people in the FIRE-community don’t want to talk about. In this interview we will get deep under his skin to reveal these ideas.
For those of us who are still on our path to becoming FI, it’s inspiring to read stories about how other people do it. Loui started his blog in august 2018 and he has a lot of great advice, so be sure to check his website out and show him some love.
I hope you’ll find this interview interesting and might learn some things that you can put into action in your own life.
Ever since I can remember, I have been frustrated about life. It was not something that I knew I was. But I have always been wondering if there isn’t more to life than an education, meeting a spouse, buy a house, get a family, retire at 70 and die.
In 2015 I was just about to finish my education as a building constructor here in Copenhagen (Denmark), when I first stumbled across FIRE. I got introduced to the blog mrmoneymustache.com, and I was blown away by how Pete Adeney had all of my frustrations written down on 400+ blog posts and solutions to them. So I ended up spending a week on reading his blog, instead of doing the studying for my final exam. Thanks Pete!
A lot have happened since then.
2015 – I finished my education as a building constructor.
2016-2017 – Been working at a big engineer company, and saved aprox. 60 % of my salary
2019 – Still going strong in another engineer company and striving to save 75 % of my salary
In 2011 I finished the final exam as a mason. And I have been practicing rowing on elite level since 2009. Because of that I decided to move on, and start to study as a building constructor.
I did that for several reasons. The first reason was because it was to damn hard to lay bricks all day, and then move on to the lake, and row for 20+ km.
The second reason was because I hoped that by studying I could focus more on the rowing, and hopefully study less than 37 hours/week.
I would definitely have been way closer to my retirement if I had kept working as a mason. But I didn’t have the knowledge to save that kind of money back then.
I work as a building constructor for a 700+ employee engineer company. Being in the construction sector is a very volatile job.
It is less volatile as a building constructor than a mason, but there are times when there is nothing to do. And there is times when everything should have been made yesterday. And thats our current state. We have so much to do at my job. So it is not unusual that I work 50 hours/week.
Luckily the company is not too far away from where I live (7 km). That is a high priority for me. So that I can bike to work everyday. I’m big proponent of intermittent fasting, so most of the days I won’t eat breakfast. And from the moment I get up, to when I’m on the bike it often takes less than 15 minutes.
It is the first time in my life to experience myself to think of work when I’m at home. I’m pretty good at handling stress. But it is not an environment I strive to be in for the next 40 years of my life. That would crush me.
I’m super thankful for the young Loui who decided to become a mason and a building constructor. It is a job that has extremely many ways of how I can contribute to the world. Even in my retirement. I have dreamt about doing some philanthropic work with my skills. One of them is designing a house people can build themselves, and would cost less than 50.000 $.
Another dream I have is to go back to Sri Lanka, where I met a guy who would love to build his dream house for his kid and wife. And he had calculated what the total cost would be, and that was around 3000 $. Just showing up with 3000 $ and 6 months to do nothing but build his house would be so awesome.
That was a great introduction. Now let’s get on to the questions, Loui!
What is the story behind your blog name “WannabeWalden”? Are you the new Thoreau?
You need to pay close attention to “Wannabe” in Wannabe Walden. There is nothing I would love more than trying to do the same as Thoreau (editor: writer of the famous book Walden).
I don’t think there is much more to life than being alive, surrounded with some loved ones, a roof above your head, some healthy foods, helping other people out and physical activity.
But I don’t have the guts to do it right now. I deeply admire people who pull the plug with almost no money to their name. They have found a way not to worry about life, and that is one of the greatest gifts.
The other day I met a man who has been on the road for 16 years, and he started the journey with 2500 €. That is freaking admirable!
Thoreau did his spiritual journey in a tiny house he build in the woods. I want to do it slightly different from Thoreau.
I would like to live on a boat.
When I have the guts to move on to a boat, I might rename the blog to “Walden on Water” 🙂 (just kidding)
The first post I read on your blog was “How Much Money Is Enough? Fuck the 4 % rule” which is rather controversial in the FIRE-community, and that’s what I loved! Could you please tell us why we don’t need to rely on the 4 % rule ?
The ultimate result of FIRE is the freedom it gives us.
And it can learn us two things.
- We are rich in the proportion of things we can let alone
- We can’t buy our way to a happy life
So with that in mind.
What would we rather do?
-Spend 5 years on saving and investing, and only have about 10-13 times your annual spending (7-10 % SWR)?
– Or spend 12 years to achieve 20-25 times your annual spending (4-5 % SWR)?
It is really rare that people stumble across FIRE when they are 20 years old, and have a job where they can put away +50 %.
So if we have to hit the “25-times-our-annual-spending” mark it is not unusual that we will be around 35-37 years old. If the ultimate goal of FIRE is freedom. Why do we then set our self up to “hit-the-mark” so many years from now?
What is the point of planning for 25 x your expenses?
Every single person I know who have quit their job and claimed the FIRE title, still makes some money.
If we aim for the 4 %, we automatically say that we are never going to earn another dollar our whole life. But why spend 5-7 years more in order to reach 25 times our annual spending, when it seems like that we are still going to earn some money for the rest of our lives.
Life is short. And I think the majority of us would be way happier with leaving our job earlier, even if we had to earn 10-15.000 $/year (for a couple of years), if there would come a world apocalypse.
By doing so our money would do the heavy lifting. If we can save and invest our way to 10-15 times our annual spending, and work a bit on the side with stuff we love; then the magic of compound interest will turn that saving into 20-30 times our annual spending in a decade or so.
That is to me way more liberating, than staying way to long in a full time job to claim the 4 % portfolio.
Could you tell us about your investing strategy. I know you use leverage for your portfolio. Could you explain why and how you do it? How do you know how much leverage you will use? Do you have a long term plan for this?
My investing strategy needs to be as simple as possible. And I’m trying my very best to have the least amount of human decisions involved in my investing. Not only involving from me, but from the outside as well.
And that is because the human psychological brain is really bad at investing. We get hyped when everything goes well, and super scared when everything goes bad. Which should be opposite.
The way I’m doing investing is by:
- Invest in world indexes
- Try to have as much money in the market as early as possible
We get taught that it is clever to diversify between different assets. Which is, indeed, clever. But there is very little talk about how to diversify across time. And that is why I’m using leverage.
It doesn’t make much sense to have little money in the stock market when we are young, when time is on our side. The paradox is that when we are old (after lots of years with savings) we got a lot of money in the market. At that time you can’t afford a huge loss, because the time is no longer on your side.
So if we can leverage early on and pay the debt off as we get older, we will be more equally exposed across time.
How much leverage I’m going to use depends a lot on my job situation. At the moment I might turn it a bit down. Because I have some future plans about a mini retirement. So in order to have peace of mind during that mini retirement, I might not leverage so hard (if at all) the next couple of months.
On your blog you’re telling the readers that you’re going to retire in only 5 years! Could you please tell us about your plan? Do you consider barista FIRE / Coast FIRE ?
I think Coast FIRE is a very neglected term of FIRE.
Coast FIRE is where you save and invest a decent amount of money, and then you leave the money in that investing account for several years (if not decades) and just let compound interest do the work.
Reaching a Coast FIRE level can be done quite quick. Let’s just say that you read this article in an age of 25 years. If you are able to save and invest 100.000 $ before your turn 30 and you get an annual return 8 % it would look something like this:
Age 40: 215.000 $
Age 50: 431.000 $
Age 60: 1.006.000 $
Age 70: 2.172.000 $
That means because you are disciplined young adult, and can save up 100.000 $ by the age of 30, I’ll guess you are able to live on 15.000 $/year as well.
You still have to earn 15.000 $/year (in order to live), but you can chose to work seasonal or part time and you can do it in a sector you love.
On your 47th birthday your portfolio would be big enough for you to solely live on income from that (15 k x 25 = 375k). Just because those money have been working for themselves. While you have been travelling around the world, starting up companies, volunteering or had a 5 year maternity. It is completely up to you.
Yes, you may have to do some occasional work. But if you wanted to work less, you could simply just scale your spending down to a lower level. You could for example work in the summertime, earn up 10-20k and then leave for another cheaper country, and stay there for a year or two. Without messing up your future financials.
Could you describe a typical day in your life? What do you want to use more time on when you become FI?
At the moment I get up around 6-7 AM, and then I will be on all day till I’m home around 9 PM.
Some days just feels like I never have a break in those hours. And that is something I would love to do differently.
Taking things a bit more slow. But at the same time I like stuff to happen. I’m a very impatient guy. Which can be a gift, but it can certainly also be a curse. Even though I’m saying that I would like a more slow living, I’m not quite sure if that is ever going to happen.
A typical day would look something like this:
7 AM : Getting up, brush my teeth and hit the bike for work/training.
4 PM : Jobs done. Back on the bike for training.
7 PM : Trainings done. Back on the bike hitting home or to see some friends.
10-11 PM: Back to bed.
When I was training at the national team in rowing, it was normal that we had 2 training sessions a day. One in the morning, and one in the afternoon. If I had a training session in the morning, I would of course have thrown a portion of oatmeal down before I would hit the bike.
What my ideal FIRE day would look like:
6-8 AM: Getting up, drinking coffee, meditating, writing and a bit of reading.
9-10 AM: Some training if I felt like it. (Which I often do).
11-14 PM: Some kind of manual labour. (Building houses, or bringing food on the bike eg.)
15 till bed: Friends and family time
Do you have other life goals than FIRE?
-Living on a boat, and crossing many of the big oceans. The atlantic, pacific ocean.
-Inspire other people to consume less, and claim their freedom.
-Being a good dad, exactly like my own dad ( a copy of him).
-Some sort of philanthropic work with my construction skills.
Has taking control of your money and mastering your personal finances always been your mindset as an adult?
Not at all.
It wasn’t until I read MMM for the first time, that I found my “why” to save money. I still have 15.000 $ in debt from when I studied. Im quite sure I wouldn’t have that debt if I was familiar with FIRE earlier in life.
Like anybody else in the middle class I thought I could consume my way to happiness. Which is not the case.
What are some of the most influential resources (books, blogs, podcast..) that have shaped your money mindset or financial situation?
The habit that has changed my life the most has been reading.
I read a danish book on investments called “A safe investment” by Karsten Engmann Jensen. Not that the book was blowing my mind. But that book guided me to start investing. And because I started investing, I got to know some people on social platforms for investors (Shareville). Where I got introduced to MMM. Which has made a huge impact in my life.
By reading we can really shape our lives. If we find a topic exciting we can read a couple of books about it. And then we have distilled knowledge from people who are experts on this topic. Maybe they have used their whole life on this topic. And we are able to read and learn about what they find most relevant about this topic in only 10-12 hours. This can still amaze me from time to time.
Is there an area or area(s) of your own personal finances that you’re still looking to better master and improve?
I think I’ve spent way to much money on food (about 300-400 $/month). I don’t eat too much out. But I do like to grab a pizza or kebab with my friends. Which can end up a bit more expensive than cooking something myself.
When I do eat out I try to go for places that will cost me 20 $ or less. I’m a pretty good chief myself. And I get offended when I pay 20+ $ for a meal I think I can cook better myself.
I have a background as mason. Imagine if I renovated your bathroom, and you thought that you could have done it better yourself? That would be catastrophic. When I pay for food I would like it to be made by people who are better than me. So that I can feel the difference.
You started blogging in august 2018. Was there a specific launching off point or what influenced you to go down that path?
No not really.
Since I had read MMM earlier, I knew that this was a path I wanted to go myself. It was a quite extreme feeling reading his blog. Here there was a guy answering all sort of questions I didn’t even know that I had.
So if I can give just a couple of people the same feeling as I had back when I read MMM, everything will be worth it. And that’s why I started Wannabe Walden.
Is there a mission statement or underlying purpose to what you intend to accomplish with WannabeWalden?
There is two reasons why I think FIRE is worth sharing and teaching others.
The first one is that I think the majority of people is not coping well with how we work at the moment. People are getting stressed out, gets anxiety and don’t have room in their lives to be together with their loved ones.
And what is holding us back to keep showing up at work? Our spending.
We keep telling ourselves that the spending is making us happy, and that it is worth working 40 hours/week. But we end up unhappy.
No one is teaching us this. We are rich in proportion to the stuff that we can let be left alone. The majority of stuff is not going to make us happier. We don’t need it.
The second reason is that we are standing in front of an huge climate crisis.
And one of the biggest reasons for this is that we consume too much. It just seems so stupid that we keep buying stuff, so that we can fill that endless unhappiness hole in our life.
And while we do so, we are at the same time destroying our precious earth. We are going to destroy our own existence while we are busy trying to be a happy individual.
I think that in 50 years from now on, people are going to ask each other which side of the fence you were when we could do something about our clima crisis.
Did you own a gas fuelled car and could drive around wherever you wanted? Did you fill your stomach with all kind of exotic meat everyday?
Or did you care, and tried to make a tiny difference?
I don’t want to look my children and grandchildrens in the eyes, and tell them how I didn’t care back then. And tell them that it’s too late now.
Are there specific short-term and long-term goals you’re working towards with Wannabe Walden?
Not at all.
I try to live a life without goals. I think way too many people do stuff they hate in order to reach a goal they think is going to make their life better.
The actions should be the goal itself.
I row and train because I like it. Not in order to win a gold medal.
I write on Wannabe Walden because I like to write. Not in order to reach another goal.
Everything that shows up as a result of my actions is just a pleasant surprise.
The only “goal” would be to keep myself on track with my whole journey. But I don’t have any goals on how it should end. I will let karma determine that.
If you could recommend 3 of your blog posts for Route 2 FI’s readers to check out, what would those be?
What is your net worth and what does it consist of? (Is it in stocks, real estate, something else? Do you currently have any debt?)
World index stock funds = 93.000 $
Cash, 5 % high yield account = 9.500 $
Total assets = 102.000 $
Student loan = 15.000 $
Stock leverage = 30.000 $
Total assets – Debt = 102.000 – 45.000 = 57.000 $
At what age did you start investing?
I started in 2007 (age 16). I was “adviced” from my bank Nordea, to buy Nordea stocks. What a terrible advice that was. But I had no other idea than following my clever bank manager, so I bought aprox. 1000 $ worth of Nordea stocks. I think the price was about 7,5 $/share.
Only a couple of months went by, and the Nordea stock price went from about 7,5 $ to 3,75 $. I was terrified.
For almost two years I read the free newspaper on the train station looking at the stock price sites. And I promised myself that when the Nordea stock was back up on what I initially paid for it, I would sell it, and never buy another stock again.
As you probably understand, I was an uneducated stock investor. Doing all of the wrong things, as well as buying individual stocks. Not buying at the dip. To sell it again.
I have later on done my own investing studies. And almost every people is best suited with buying cheap index funds, and just stay the course. Buying up every month, with as much money you can afford to buy for.
What has been the average rate of return on your investments? Have you done calculations of what your average return would be if you did not use leverage?
I do not focus too much on my returns. It is a factor I can’t control myself, so I can’t see much reason to give it to much (if any) attention.
In 2013 and 2014 I had individual stocks. And the return was through the roof. Like 35 – 50 %/year. But it had nothing to do with skills. It was pure luck. And it was not to much money that I had invested either.
I later on moved over to index funds, and have been a happy investor since. Sometimes I think it is a bit to boring. But that is how investing should be. If I want excitement I can just go to the casino.
My overall return from august 2013, to this day is about 172 %. But as I said earlier. When I got the insane returns in 2013 / 2014, there were almost no money in my portfolio. People can check it on Shareville -Wannabewalden them self.
What has been your average annual income up to this point? And what is your average savings rate? How much do you spend annually?
My average take home pay has been around 37.000 $/year.
And my savings rate is about 58 % of that.
I spend about 15.000 $/year. But I really want to scale that down.
Do you think anyone can become a millionaire today?
No. But you don’t have too in order to retire early. And that’s the key.