Savings Rate: level 99

Hey guys

As I promised in my previous post 2016 Goals, I’m going to talk about my savings rate.

First of all, for a 20-year old it’s very nice getting paid to study. This brings me a nice paycheck every month. In comparison with my American colleagues who need to lean money and start in debt, this is a major benefit. Some are even paying off their debts long after they’ve graduated, which is obviously not a great start for an investor.

Secondly, my young age offers a few more advantages. I like to call this negative income as it saves me money:

  • First of all, I still live with my parents. 5 days on 7 I’m at my work so I don’t see the point in paying rent for a house or appartment I can’t spend time in. I still like living at home so as long as I can and want to stay here, it’s a money-saving situation. In my case renting would just be a complete waste of money. And if there’s anything we don’t want, it’s wasting the precious.


  • Second point: as a poor, young student my parents give me food and some money during the academic year. This brings my groceries cost down to €0. Yes, I’m a lucky bastard.

So, very nice, few expenses. But now what do I pay for myself?

My biggest expense is my car. I know owning a car does cost a lot of money but in my case it’s still acceptable. I often need a car to get to my work because train is very time consumable. It would take me about 2h30 to commute between work & home and by car it only takes like 50 minutes to 1 hour. Also, I carry quite a lot of baggage and after the train I would need to take the subway and then still walk like 15min equiped with 2 heavy bags with all my food and stuff. I prefer the car. I really like driving and I think of it as fun. It feels like real freedom and if fuel wouldn’t be so expensive, maybe I would make some rides for fun.


So how can I cut expenses on my car? First of all, it was kind of a present because of lucky family circumstances with promotions and stuff so I received the car. Second point: I share the insurance and tax bill with my dad. Because he doesn’t like someone else riding his car, we made this compromis when I received my car. The fuel I have to pay for myself in most cases. So now the yearly cost: Insurance 160 + Taxes 130 + Fuel 500-600 + Maintenance 200 (estimation). This comes down to around €90 a month for my car.
If I compare this to what other people pay, I think this is a very acceptable price for what I get.

So do I have other expenses? I like going to small restaurants where you’re served a very decent meal for less than €10. During school, I do this on average once a week. This comes down to €40 a month and sometimes I get a drink with friends, go to the cinema or buy a gift for special occasions. Let’s say this costs €30 a month.


Last but not least, I really like going on holiday. As I mentioned in When I Break The Chains, I want to travel the world when I’m free. These holidays normally don’t cost much as I try to look for deals or other promotions. Last year there was rather a splurge in my travel budget as my holiday to New York cost around €2,000. But hey, no regrets, it was by far the best holiday I ever had. A ratio 3 holidays or citytrips a year, lets say this takes a €1000 out of my yearly income.

New York City

My martial arts hobby costs me around €250 a year, my gym €0 (free gym in school). Health is even more important than money to me so I like to be ‘mens sana in corpore sano’.

As I have listed my income and expenses, I will now make it more clear in a table . This is a preview of my 2016 income and expenses. I am going to make monthly saving rate posts to see how I do and if I’m maintaining my savings rate.

Yearly income

Paycheck + bonus: €20,200
Tax refund: €1,100
Parent funding: €1,200
Family gifts: €2,000
Dividends (yay!): €680
Savings intrest: €200
Total estimated income: €25,330

Yearly expenses

Car: €1,100
Restaurants: €400
Entertainment & Gifts: €360
Sports: €250
Holidays: €1,000
Total estimated expenses: €3,110

–> Estimated Net Worth Increase: €22,220. Hey, isn’t this more then the €20,000 I wanted to invest in the stock market as one of my 2016 Goals? Exactly, it is €2,220 more. What do I do with this? €950 goes straight into my pension fund to reduce taxes and I also have a Home Invest Plan for €1080, which benefits me when I buy a house. These two other types of investments thus take €2030. I am left with another €190 which I take as a margin of safety on unexpected expenses.

This means I should be able to have an awesome savings rate of 87,7%!

This won’t be an easy goal to accomplish as I obviously forgot some things I can’t think of right now and which take the rate down.

I know I won’t be able to maintain this high savings rate for the long-term. In the mid-long term I will be looking to buy a house and extra expenses will come too. But, as long as it’s possible, I want to keep the rate damn high!

I am very conscious that I’m in a lucky position, with my parents still funding me and stuff. At least I try to do something good with the money and eventually it’s not wasted on poppin’ bottles in the club.

To end, a motivational pic which I think is very true.



9 reacties op ‘Savings Rate: level 99

  1. Robin

    What are you studying?
    I’m currently in my 3rd year of engineering, so I could have studied it at the KMS
    I’ve always been interested in studying at the KMS but living 5/7 days at boarding school never seemed fit for me at the time.
    Being tied down to the military for x years of service in return for the paid education is a trade off I don’t think I can make. Especially now I see that my interests are turning more towards statistics and finance. Don’t think the military has much room for such jobs.

    But you’ve really sparked my view on the KMS again, i’ll be checking out some open days if I can.



    • When Do You Retire?

      Hi Robin

      It’s true that you could have studied engineering through the KMS. Indeed it’s sometimes hard to live 5/7 in a very strict and disciplinar school but as you get older and you work your way trough the years (5 in total), you receive more freedom.

      Being tied down to the military for 8 years afterwards is the backside of the medal, but I think it’s a very necessary rule. If people would get paid for studying, a lot would leave the army after graduating, like “thank you, goodbye” because they weren’t interested in the army but just in it for the money.

      For statistics and finance it may be hard to find a job in the military, but I don’t know the specific needs so if you feel the urge, you can just pass by an info centre and ask for some information.

      If you can visit the school, you really must do it. Even if you don’t want to apply or something. In March there’s always an Open Campusday where everyone can visit the school and have a guided tour. It’s really nice to see how things are going on there and what facilities we have, because let’s face it: not many people know the KMS.


  2. No More Waffles


    Impressive savings rate, which is obviously helped by the fact that you’re still living at home (without having to pay rent to your parents) and the fact that you receive an income while studying.

    When I heard about the military school and university programme for the first time I hit myself on the head for not going that route too… Can you imagine how much further I’d be if I had saved €20,000 every year between 18 and 25? That’s seven years of hardly any income as a student while you are making big bucks.

    Keep it up and you’ll be FI in no time!



    • When Do You Retire?

      Eventually the savings rate will go down when I settle but the longer I can maintain this, the better.

      At our young age it’s not very common to be busy with the financial markets and dividend investing, although we will almost be free when the average adult starts thinking about investing. Guess we’re among the happy few 🙂



  3. Robin

    What are you studying?

    I’ve always been interested in studying at KMS but living 5/7 days at boarding school didn’t seem fit for met at the time. Currently i’m in my 3rd year elektromechanical engineering, so I could’ve done it at KMS.

    Being tied to the military for x years after you finished your study’s also seems like a big trade in for paid education. Especially now I’m getting more and more interested in statistics and finance so I don’t think the military would have allot of suitable jobs in that area.

    But you’ve definitly resparked my interest in the KMS, I’ll be checking out some of the ‘open days’ if I have the time!



  4. ambertreeleaves

    Woow… Tat is a great forward looking saving rate! With that, you will have more than a good start once you go and live on your own. They say the first 100K is the hardest;;; In your case, it is 5 years away!

    I have considered KMS for a split second myself, but decided to get the engineering in a regular school. With what I know right now… I might do it differently

    Geliked door 1 persoon

  5. arakelian

    awesome savings rate of 87,7%! Woooow. Keep the road, Jack! 🙂 it is perfect, in 5 years you will have more than 100 (because the interest and dividends are coming).


  6. arakelian

    small remark: you didn’t estimate budget for:
    -clothes & shoes
    -books & cosmetics
    (ok, I am a lady, I need these to be clearly budgeted overwise I can spend on these more than I gain)


    • When Do You Retire?

      In those subjects I consider myself a lucky guy. 95% of the food I consume is paid by my parents (I’m just a 20 year old poor boy, you know). Only if I visit a restaurant with friends or girlfriend I have to pay it myself which is fair enough.
      Clothes, shoes, books (actually none except study) & cosmetics are also funded by my parents.
      That’s why I didn’t take them into account 🙂

      Geliked door 1 persoon

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