Hey!
Accompanied by all the big enterprises reporting results, I can’t stay behind in reporting some numbers of course!
As the stock market has been rising lately, so did my net worth. However, there was an enormous rise in net worth. Why? This was due to 2 main factors: 1) subsidies 2) gift.
The subsidies are coming from the government linked to the apartment I bought. Long story short: this should be a little over €100,000. The gift I received came from my parents and was €75,000. Whether or not it is ethical to accept gifts, is another debate. My main rule of thumb was to not accept what I could not pay myself.
In the calculation of the mortgage, the intrest costs for the coming 20 years are already included. I leant €160,000 and the intrest costs are around €32,000 in total. I value the apartment around €320,000. There are some other costs involved linked to the mortgage, notary, administration… These are deducted as you can see above. I will still have some costs to furnish the apartment, so any frugal tips are welcome!
It’s gonna be hard to achieve impressive results in the future as my monthly cash flow will be reduced by around €800 due to the mortgage. However for every €800 I pay, €640 stays in my pocket and only €160 is paid for intrest over the years. Assuming an appreciation of housing prices in the future, this will help boost the net worth. This will hopefully offset the opportunity costs of not being able to allocate this money into the stock market.
Side notes:
– The only regulation for receiving the subsidies is to put your place of residence at the apartment for 20 years. As this does not prevent me from buying other real estate, I don’t consider it a dealbreaker.
– By stumbling upon this opportunity, this implies I already reached my Financial goals by age 25.
–> Even without the gift I crossed the €250,000 mark on my own. This means I will have to put up a new goal.
– It took me more than 2 years of searching the real estate markets to find a unique deal like this. I consider the apartment both an investment and living opportunity. Some quick calculations showed that, hypothetically, even if I would never live in the apartment and pay taxes/maintenance every year, I would still end up with a decent profit.
How are your goals developing?
