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In August 1929, John J. Raskob, an investor and developer who became famous for building the Empire State Building, said the following about getting rich by saving money: “No one can become rich merely by saving. Mere saving is closely akin to the socialist policy of dividing and, likewise, runs up against the same objection that there’s not enough around to save.” I always thought that saving money was the way to riches. The platitudes […]
In the past (before I temporarily killed this blog back in 2020) I did yearly updates on Box 3 and what impact this had on the Cheesy Index. But it’s been a while since I looked at Box 3 and the impacts on our FIRE numbers. Something to do with our lifestyle inflation. But with all the fuss about Box 3 lately, and because I need to prepare a FIRE 101 presentation for the upcoming meetup, I figured it was time to give it another go. However, not just for me, but also for you my dear reader. So today I present to you: Box 3 and your FIRE number. History Lesson Quick history lesson on Box 3 and it’s taxation setup for the Netherlands: In 2001 the third tax box is introduced in the Dutch tax system. Box 1 is taxation on regular income from work/pension/benefits. Box 2 is taxation income from special interests (i.e. if you own more than 5% of the shares of a company). The newly introduced Box 3 is taxing the income from your wealth (assets minus debts). The Taxation in box 3 is pretty straight forward for the period from 2001-2016. It assumes you made 4% on your net wealth, which was taxed at 30%. So it boiled down to having to pay 1,2% tax on your net wealth (with a minimum threshold on which there is no taxation). For real estate, where leverage is applied, this worked in one’s favor, as you would have high debts and thus relatively low wealth and higher returns. Thereby lowering the absolute and relative taxation (this is one of the reasons we originally got into real estate). But due to dropping interest rates, people with just savings got screwed. They sometimes paid more taxes than they received in interest. They protested at various Dutch courts and won. So the system was/is being overhauled. Savings were to be taxed less, investments to be taxed more. This all started from tax year 2017. The assumption in the system introduced that year was that if you have a higher wealth, you would have more investments compared to savings. If you had more wealth, your relative taxation would gradually go up with it. Fast forward to 2024. We are now taxed 36% on income from wealth (up from 30% in 2017). Savings are assumed to return 1.03%, other investments are assumed to return 6.04% and debts are assumed to cost you 2.47%. Together with some other changes, this drove up the relative tax burden on our (and your) net wealth. Only upside, the minimum threshold, before Box 3 taxes are applied was upped to €57.000 per person (double if you are a couple). Box 3 and your FIRE number: Tax History The Math Okay, let’s run some numbers and make some graphs! I looked at a couple of things: What is/was the taxation for various wealth numbers from 2016 – 2025. Just to see how the same
🎙️Episode #375 – It’s NEVER too late. I share inspiring stories of investors who started in their 50s, 60s, and 70s and achieved financial independence…. The post Is It Ever Too Late to Start Investing in Real Estate? appeared first on Coach Carson.
Welcome to another monthly dividend update. I have been posting these monthly dividend updates since the birth of this blog in July 2014. Why do I keep writing and publishing these monthly updates? Because they … Read more
Can you believe we’re in the final stretch of the year? If you’re wondering how to end the year strong, especially when it comes to your money moves, you’re in the right place! As your financial big sis, I know this time of year can feel overwhelming – between holiday shopping, family gatherings, and trying to figure out your money situation before January rolls around. But here’s the thing: these last few weeks can be […]
We chase financial independence and early retirement, believing these achievements will provide a better life. But what if the pursuit of such goals is actually trapping us? Listen to the Podcast I’ve drifted in and out of the meritocracy trap over the years, but mostly, I’ve stayed stuck in its sticky web. I quickly learned … Continue reading “A Midlife Crisis Without the Sports Car” The post A Midlife Crisis Without the Sports Car appeared first on CLIPPING CHAINS.
Happy Holidays, everyone! I hope you are enjoying the holidays as much as RB40Jr. He loves winter break because he doesn’t have to go to school. Life is so simple for a kid. This year, we are flying to California to visit families for a week. Normally, I don’t like to travel during Christmas because the airport is so busy. But we are all getting older and we want to spend the holidays with families. It should be great. Recently, I heard on the radio that practicing gratitude can increase happiness. That makes sense. 2024 was full of ups and downs, but we should focus on the positives this holiday season. Most of us are very lucky. We should acknowledge it more often. Peak Portlandia! First off, I want to announce that I have reached peak Portlandia! Check it out. I foraged these ginkgo seeds from a street tree, roasted them, and served them on a plate I made. Boom! I am done. There is nothing left to achieve in Portlandia. Hahaha. Mrs. RB40 and I were strolling around the neighborhood when we saw some fruits on a ginkgo tree. I never looked at the fruits closely before, but I recognized the squished seeds on the ground this time. I used to crack these nuts with my grandmother when I was little. Whoa, these nuts are a delicacy. I didn’t know they came from ginkgo. We collected some fruits and took them home to experiment with. The ginkgo fruits were super stinky and not edible, but the nuts tasted fantastic. I haven’t had these nuts since I was a kid. Mmmm… Coincidently, I made a ginkgo plate last month in my ceramic class. Serendipity. I went back to get the rest of the nuts on the ground the next day. This time, I boiled and put a little sugar on them. They were great. FYI, you can only eat about 10 of these nuts per day. (5 for kids.) They contain ginkgotoxin and can cause severe poisoning if you eat too many. There are many benefits too. Ginkgo is used in traditional Chinese medicine. Thank goodness for the internet because I would have eaten this whole bowl. I just checked Amazon and 10 seeds cost $12. That is not cheap. Health is okay 2024 wasn’t a great year regarding health. Mrs. RB40 and I are getting older and we are facing more health issues. However, we are still healthy enough to do everything we want. We are thankful we have great doctors who care about us. Unfortunately, my primary care physician is retiring early next year. RB40Jr had surgery to put a Cochlear implant in his ear to improve his hearing. The surgery went well and his hearing is starting to improve. We are thankful for that. However, the insurance denied our claim because they said the implant was experimental. We’ll contest the denial, but that can wait until next year.
The stock market outlook remains in an uptrend, despite the lump of coal delivered by equities last week.
Looking for information on the upcoming paycheck? Find details at When Is The Next Military Payday? Navy Federal Credit Union (NFCU) is a very popular bank for military service members. NFCU has several types of checking accounts, and their Active Duty Checking account offers a variety of benefits including free checks, ATM rebates, and early crediting… | Read More… The post 2025 NFCU Military Paydays – with Printables appeared first on KateHorrell.
Send us a text Join us on Average Joe Finance hosts Mike Cavaggioni and Tanya discuss their reflections on 2024 and share their goals and strategies for a successful 2025. They emphasize the importance of being present, setting intentions, and reflecting on achievements and shortcomings to improve for the future. They also touch on planning […] The post Podcast 282. The Finance Forum: End-of-Year Reflections and 2025 Goals with Mike and Tawnya appeared first on Average Joe Finances.
Discover the best Christmas decorations in NYC and revel in the spirit of the season. Tis the season to be jolly! People travel from all over the world to experience Christmas in New York City. The city turns into a winter wonderland with holiday markets and shimmering lights all around. Over the last five years, […] The post 12 Dazzling Places To See Christmas Decorations in NYC appeared first on The Thought Card.
Investment psychology The emotional tail wags the rational dog Today’s post presents some key insights that investors can learn from behavioral psychology. They revolve around the notions of risk averse behavior and risk seeking behavior. In the early 1970s, Amos Tversky and Daniel Kahneman, two Israeli psychologists, started working together on the subject of people’s attitudes to risky choices. The standard theory in psychology at the time, indeed in all social sciences, including economics, was […]
Warren Buffett (the world’s greatest investor) once exclaimed that ‘if your company has an economist on the payroll it has one too many employees’. And of course you can look to the headline of this post for another telling description of the use of economics in making investment decisions. We can put any ‘market guesser’ in the economist category. And in the annual parade of investment buffoonery economists and investment firms sign up to demonstrate […]