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 Eelis Vatanen from The Wealthy Finn
He’s a young FIRE-seeker at age 35.
Eelis has a pretty grand net worth already, and in this interview we will get deep under his skin to reveal his ideas and get to know him better.
For us who are still on our path to becoming FI, it’s important who we get our information from.
I hope you’ll find this interview interesting and might learn some things that you can put into action in your own life.
They say you’ve won the jackpot when you’re born in Finland. In many ways it’s true and just being part of this society makes you rich in so many ways: awesome healthcare and world-class education system for “free” (yes someone pays the bill always). And in the case you are not fit for work, the society again will take care of you. Due to high taxes, getting wealthy on a salaried job though is difficult.
I’m a frugal person by nature. After I graduated more than 10 years ago, I started accumulating savings without even thinking about it. As the balance on my bank account grew, I realized I should perhaps put that money to work. I’m a bit obsessive and a bit of a perfectionist, so it wasn’t enough to just invest, I had to measure it and perfect it, or at least try.
I lead a fairly regular life. Most likely for a personal finance blogger a bit too grandiose. In 2017 I calculated that I spent 6000 on traveling ?. I also love good food and I drink too much coffee. I balance these by changing my habits to be more environment friendly, exercising and trying to combine charity with my investing.
I have a master’s degree that combines economics with a technological twist. After high school it was difficult to decide what I wanted to do, so I went for something as broad as possible. I ended up in a role that combines business needs with technological possibilities.
Having this particular background has definitely aided in my journey to FI, but it is difficult to imagine where I would be without it, too. I make about 80 000 € a year doing something I like and what I have a special talent for. I feel my education is only a small part of why I’m in this situation now, but I do feel like I’ve made good choices: choices that fit well for me in particular.
I’ve always been in IT, managing software development, doing product ownership and being responsible for technology functions. I’ve worked for larger corporations managing teams of 10, and I’ve worked in startups solely being responsible for technology stacks.
I used to be a ‘corporate guy’, trying to climb the corporate ladder. That world is so addictive. It’s well gamified, rigged so that people would be hungry for the next promotion, the next “level” and the raise that comes with it. My advice to you is: unless it is fun, don’t do it. You’ll waste your life pursuing something fake that you think will fulfill your hunger for being successful, but there’s always a next step after this one, and a new ladder when this is done.
Nowadays I work in IT consultancy, managing a team that does cloud computing implementations for customers. I work a regular 8 hours per day. As I live pretty close to work I spend about 40 minutes daily for my commute. Including getting ready etc. the 45 hours a week is still something I would rather spend doing something else. I wish I would have the energy every day to go jogging, to go to the gym, to play my PlayStation and to cook healthy, tasty meals. Now, I have time and energy to do perhaps two of those things.
Oh, and I watch too much Netflix.
Once I’ll reach FI, I’d ideally continue working in technology strategy space. I have enough experience to be able to evaluate different venues a company could take with e.g. cloud computing. Providing vision in such projects could be fun, without being a full-time thing. Also, as I mentioned charity earlier, I’d like to find ways to help the planet and others on it through charity.
Let’s get on to it, Eelis!
What is the story behind your blog name “The Wealthy Finn” ?
I wanted the name to explain that this is a finance blog, written in English by a Finnish blogger. I decided to start blogging in English since there didn’t seem to be any English FIRE blogs from Finland. Not that the country matters. In fact, my strategy is to keep it as country-agnostic as possible. But Finland has a good brand, and I decided it could be beneficial to ride on that. Hah! ?
The first post I read on your blog was “The ability that predicts health, wealth and success” Could you please tell us more about that subject? Are you good at delaying gratification yourself?
On some things I am. When I started working, I first decided to save 5 000 € before I allowed myself to upgrade my TV with one that cost 500 €. It took me 4 months, since I had next to no expenses. On others I’m not. I have an addictive personality and get hooked up on video games, nicotine, caffeine etc. When I’m hooked, I find it hard to control impulses.
Looking at my habits at this very moment I’d say I’m better than average at it, but I tend to lapse at times.
Could you tell us about your investing strategy. Could you explain why and how you do it? Do you have a long term plan for your investing?
I anchor a lot of my investing strategy on the stock market and trying to understand where it is going, as an asset class. When I believe stocks are cheap, I’m shifting weight into them. At this moment, when I feel stocks are expensive, I’m trying to find returns elsewhere.
Over the years I’ve learned the value of diversification. Having diversification in my portfolio means I no longer obsess about a single asset class performing optimally at all times. On Friday I lost close to 2k€ in stock valuation and it actually felt good. It meant having underweight on stocks was perhaps going to pay off after all. It’s too early to say of course.
I currently own half of a rental apartment, half of my home, p2p loans, corporate loans and stocks. I also own a camel in Somalia, some physical forest in Finland and a tiny bit of cryptocurrencies (down -50%).
The long term plan is to have enough so that I don’t have to rely on a salary while keeping my current standard of living.
On your blog you’re telling the readers that you’re planning to hit 1 million euros (1,13 million USD dollars) when you’re between 40 to 45 years old. Could you please tell us about your plan? Do you want to retire early, or will you continue to work?
Yes, the plan is to hit 1 000 000 euros, originally by 40, but as always, the original plan was a bit too tight. Having only 5 years left to go, I could with extraordinary luck arrive at 800k+ by being 40.
I will likely stop going to a 9-to-5 day job, but I will likely continue to do something, like consulting in technology strategy. I might also start a company of my own, if there was a field I felt really passionate about.
I don’t think I would enjoy doing nothing. I will likely continue to write a blog and definitely will do charity more.
Could you describe a typical day in your life? What do you want to use more time on when you become FI?
On weekdays i eat breakfast at work, I work for 8 hours and either go for a run or to the gym for an hour. After that I get to spend time with my wife, cooking dinner, watching Netflix and seeing friends. There’s usually some side project I’m working on that I might spend an hour on before going to bed.
I love good breakfasts and it’s one of the deal breakers when choosing a hotel. When I’m FI, I’m going to enjoy my mornings and breakfasts more, I’ll spend more time exercising, cooking healthily and it’ll leave me more time to do nothing with good conscience – a healthy life without stress and hurry.
Do you have other life goals than FIRE?
Nothing as big as FIRE.
I have always wanted to become a successful entrepreneur, but I might be willing to compromise on the ‘successful’ part. I’ve started a few companies in the past, but looking at the likelihoods of success and the time it takes to call an opportunity, they haven’t been promising enough for me to dare to go all in. So it’s still a goal for the future.
Once I’m FI, the risks are smaller and the pressure lower.
Has taking control of your money and mastering your personal finances always been your mindset as an adult?
More or less, yes. I’ve always been frugal, never spent uncontrollably on anything (except maybe on traveling the last few years). I’ve always known how much money I had and how much I can spend.
What are some of the most influential resources that have shaped your money mindset or financial situation?
The blog that got me interested was www.taloudellinenriippumattomuus.com, written by Pasi Havia, who stopped blogging 5 years ago. While books like ‘Rich dad, poor dad’ and ‘The richest man in Babylon’ are entertaining and motivating, they’re very shallow in their content.
Ben Graham’s ‘The Intelligent Investor’ is a good oldie and stands time incredibly well. I liked ‘The Guru Investor: How to beat the market’ as it summarizes well 10 numeric strategies for undervalued stocks.
I would also recommend reading the academic paper from D. Piotroski: ‘Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers”.
Is there an area or area(s) of your own personal finances that you’re still looking to better master and improve?
Quantifying risks is so difficult. With stocks, you can calculate volatility, but with things such as p2p lending, how can you forecast how they will behave in a downturn? Diversifying a portfolio is crucial, but unless it is done in a way that there is little correlation between the assets and the asset classes, what’s the use? So risk-adjusted returns is a theme I need to get better at.
Proper valuation of a stock is another theme. I have given it a few tries and eventually given up, but I believe I will keep trying until I get confident in it.
When did you first start blogging? (finnish/english) Was there a specific launching off point or what influenced you to go down that path?
After graduation, once I had worked for a couple of years, I had accumulated some 30 000 euros and as the years after 2008 had been extremely stock market friendly, I felt like I was unstoppable. I didn’t have a lot of friends who’d like to discuss investing with me, so I thought I’ll just start blogging about it instead. It was a way to reach like-minded people.
I had read Pasi Havia’s blog and I wanted to get as good at it as him. By then I had also done the compound interest calculations and realized that there was a small-but-finite chance of reaching 1 000 000 € by the time I turn 40.
So, I thought it was as good time as any and that if I was going to do it, there was no reason to postpone.
Is there a mission statement or underlying purpose to what you intend to accomplish with The Wealthy Finn?
I’m still working on this one, but firstly, I don’t believe it’s a zero-sum game for bloggers. Instead, I believe the more we collaborate and help each other, the better it is for everyone. So, while I like to tell my own story as much as the other guy, I believe that if I can help others, it will benefit everyone – me included. That includes helping other bloggers.
I’m trying to think of ways to apply my technical skills to build an audience for other writers, being generous in linking to other blogs and to create interesting conversation pieces that can live their own life outside of The Wealthy Finn.
Are there specific short-term and long-term goals you’re working towards with The Wealthy Finn?
Not yet, but likely soon. I’m planning to do a 2-year goal plan for the blog that would include email subscribers, monthly visitors and twitter+facebook followers. I would like to reach 10 000 monthly visitors in two years. For now I’m at about 200 so there’s some good way to go.
If you could recommend 3 of your blog posts for Route 2 FI’s readers to check out, what would those be?
These posts perhaps gives the reader a good idea of what’s more to come on my site.
What is your net worth and what does it consist of? Numbers please!
My latest blog post explains my current asset distribution fairly well,.
So the size of the pie is about 400 000 euro, but it’s excluding some things such as cash, forest, car etc.
At what age did you start investing?
I think I bought my first stocks around the time I was 20.
What has been the average rate of return on your investments?
What has been your average annual income up to this point? And what is your average savings rate? How much do you spend annually?
Average income probably has been around 70 000 euro.
In 2017 I saved 36% and my life costs was 28 300 € in 2017. If you don’t mind Google Translate, there’re more details in the Finnish post here.
Do you think anyone can become a millionaire today?
By luck, yes. By determination – not everyone is that privileged.
It would be naïve to claim that everyone could have 500 € extra every month, for 45 years and get an effective 5% interest on it after taxes.