Money Talk: Project Debt-Free by 30
On being ‘exotic’
From 6th gear to full-stop
Min stad, just där solen börjar om
Well, then what’s your not-so-good version?!
An immigrant in Sweden, prt. V
Sverige, vad älskar jag dig
Careergirl’s advice on selling your first property
Money, some people crave it, some people hate it and some inherit a bunch, but everyone needs it… yet no one seems to talk about it.
If money is on the taboo-list, then what does that make debt?!
There are days when I wish I had a car that didn’t reach 90decibels as soon as I’ve passed 80km per hours, or that I could parade around town with the latest Gucci bag. But I simply can’t. Or I mean, I could, but I don’t want to borrow money in order to spend it on something rather pointless as an overpriced bag or a car (no return on investments, increased monthly costs and damaging the environment: the trifecta of bad money decisions).
Stockholm is a strange little bubble where 19year olds parade around town with Chanel bags and if they smash their Iphones 7 they just replace it with a new one tomorrow. I come from a country and family where these things were luxuries. I never grew up poor, on the contrary, we had 2 or sometimes even 3 cars at the frontdoor and I’ve travelled the world. However, coming in to the Nordics, a whole new level of life standards opened up for me. Sweden, as well as Denmark and Norway, have a certain wealth to them that seems so normal to well, only them. Porsche’s, Tesla, Chanel, Rolex watches, fancy dinners and Louboutins. As a foreigner coming into this country I could not for the life of me grasp where all this materialsm came from. With a fingersnap and it seemed to appear.
After studying the financial markets and risks within these countries though, I seem to get it: Debt pays for most of this. And before I draw you in into much economical talk: wages here aren’t high enough to support people’s spending, which means debt keeps on increasing. A debt no one is really talking about, or dares to talk about.
As a working woman and as a woman trying to inspire younger girls to study STEM subjects and later pursue careers within Technology, Engineering or Finance, I want to make something very clear. A debt always has to be payed (insert GOT fans), including your studentdebt.
Sometimes people explain to me ‘well, I have a representative job, so I mean, I need a mercedes when I meet my customers’, or: ‘well, that yves saint laurent was on 40% sale, just couldn’t leave it’. Right, you really need a Mercedes for that? And 40% off a whole lot of money is still a shitload of money. And you really need the latest useless Iphone addition because what, IOS10 is so much worse than IOS11?
For anyone else reading this and thinking ‘how do those people accumulate so much money?!’ they don’t. They borrow it. Sure there are some out there that have had huge realestate succes or know how to invest their money correctly, but in general: a large of the population borrows money to support their extravagant lifestyle. People extend their mortgages (meaning they increase their mortgage above what they currently have on loan or above the actual value of the house) in order to buy audi’s, porsche’s or a rolex. A common theme in Sweden is also the quick textloan – yes that exists – with 19% interestrates in order to shop at a luxury boutique. You send a text and 30 seconds later you have 6k on your bankaccount which you can freely spend, but the interest on interest is sometimes literally sending people into bankruptcy.
I don’t own a €4000 Celine bag because I chose to buy a €4000 Toyota Aygo. One that costs me on average €70 per month to drive, including a full tank, insurance and taxes. I do however own a vintage Celine which I bought for €220, and it took me 2 months to think about buying.
‘You gotta spend money to make money’
While I do believe this is true for an education and real-estate, I don’t see any other reason to indebt myself on anything else, particularly clothes, bags or cars. I have a really good job that pays the bills and has made it possible for me to purchase my own real-estate. At 27, I’m in the top 10% highest earning bracket in Sweden, and I still cannot (or rather will not) afford the current ‘average’ Stockholm spending lifestyle. Which means I don’t live in the intercity, don’t shop every week in Norrmalm, don’t have a wallenberg-boyfriend nor go out to dinner 4 times a week. And I hear you thinking ‘she’s still at the top 10%, how is that possible?’
This isn’t bragging, this is to show the reality. For me, rather than sipping some lovely wine outdoors (believe me: cravings!) every paycheck and bonus I get in goes straight into paying off debts. Because yes, I have debt! And I hate it. It can literally make me feel sick thinking about debt, even though I know for instance nearly everyone has studentdebt and a mortgage. I don’t believe in indebting myself €800.000 to buy an 60m2 apartment mid-town Stockholm in order to perhaps have a return within 1 year of €70.000. You can actually make that type of money also in the suburbs of Stockholm without the 800k risk
When I was 18 and living off state-funded student loans I couldn’t care less about the build up of debt – nor the 4,13% interest pricetag on it! Even though I paid my own way through my bachelors without help from my parents, I also still travelled where ever, bought a new jacket when the colour appealed to me and ate at whichever hip restaurant I wanted. Because, well, the state gave me money to live on. Sounds familiar? Not only did I not save any of my money, I increased my debt more and more, even with part-time jobs on the side. With €200 state given money, €700 euro state funded loans and around €500 of side-income, I was still down to 0 by the end of the month.
If you’re currently studying and you average 4 years on your bachelors, no matter how good the interest rates currently are: think about this €700x12x4= €33.600! Who-ly Mo-ly. That is a lot of money
Debt-free by 30
The ‘laid-out’ plans for every civilian is to pay off like what €200 per month on studentdebt for 15 years? And €350 p/m on a mortgage? For 40 years? Hell no! Not for me! It felt like I would be stuck with these responsibilities for half of my life and come on, I want to be able to live life to the fullest. To be worry free when payday comes. To be able to enjoy that expensive wine I just got. Or to be able invest in biotech, artificial intellegence and green energy! Not paying off these dreary debts. Or… to book a ticket to Hawaii if I ever want to (- I want to!)
After my 26th birthday I made myself a promise. I will get rid of my debt by the time I’m 30! That’s a lot of money to pay off in 4 years time. So to make it more realistic: I will reduce my mortage to 50% of the value of my property, as by that time the interests rates will eventually rise again.
And so it began…
In 2016, instead of spend spend spend, I chose to pay off €12.000 on my mortgage that year, and €14.000 on a loan I had open to my mom when I bought my first apartment. I also payed off €6.000 on my studentdebt. Currently, more than 55% of my monthly income goes to paying off debts, and I don’t even live off a creditcard.
To paint the picture: I don’t live uber-frugal, I go out plenty and splurge on a lot of experiences, but I no longer spend wicked amounts on clothes and interior design: on ‘dead things’ as I call them. I also think twice about sponteneous weekends away (bye bye €500?!). Although I might not always the most fun person, I can at least sleep comfortably at night.
I know there are going to be many who read: jeeez, how much debt does she have?! Before you do, run through the total sum of your cards, car-loans, store creditlines, mortage and studentdebt. Still flabbergasted?
Why am I openly writing about this? Because debt needs to be made discussable. I know many people in Stockholm swing their Chanels so casually, they tend to forget their €3000 creditcard debt while they’re at it. But no, we have to keep talking about this. Not everyone makes €700.000 a year like our famous blog- and vlog peers. Oh no. I’m just a working class girl. I also know that if I were to sell my apartment I (hopefully) will have a big chuck of money on the bank, but no housing market is secure, particularly not Stockholm’s and if I wish to buy a new property I’m gonna need that money.
To close on a lighter note; By discussing debt, you can also highlight the positives with paying off these debts:
– Less financial stress
– More financial freedom as you go
– Possible downpayments for mortgage, a vacation house, a year of travel or retirement.
– Highest credit-acrredition resulting in good basis for interest negotiations
– Investing your money into stocks, funds and companies you think are relevant.
– Pursuing ‘lower-income-more-satisfation’ jobs than what you might currently do.
So from now on; I’m openly discussing my debt. Can you discuss yours?
– Where are you from?
Sweden, or uh, the Netherlands.
– Huh, ok, so what is it then?
Are you Swedish or Holland-ish?
Well, I’m Dutch, but I live in Sweden.
– So what does that make you? Do you have double nationality?
My passport says Dutch, but I’ve been in Sweden for more than four (and a half: gasp!) years, so I’m a member of ‘society’, but I’m not Swedish.
– But you don’t look like you’re from Holland. Where is your blond hair? And your wooden shoes? Do you have those? And your curls, are those natural?
Well, my mom was born in Surinam, so that’s where I got the curls from, I think, and the big ol’ but.
– What? Surinam? Is that in Africa? You’re not dark, your skin is so pale. But I guess I could see it in the lips and hips.
No, it lies in South-America.
– South-America, like Brazil or Argentina? can you speak Portuguese?!
It lies in the north, close to Venezuela. Unfortunately, no Portuguese no. They have their own language though.
– Oh, so is it close to like Colombia? Paraguay?
Something like that.
– I’ve never heard of that country. Are you sure it’s real?
Yes, yes it is. There’s a lot of rainforest and the amazon goes through there as well.
– So your mom grew up in the jungle?! Is she from one of those super secluded tribes that shoot arrows at passing aircrafts?
More than 4 years I’ve been living in Sweden, and after 4 year’s of keeping up with life’s ‘new’ pace, I have finally started to slow down. It is now January 2017, and two years after my father’s passing I have started to experience what inner peace feels like.
From the first month, september 2012, when I was studying in Lund everything started to enter in a rapid pace with graduation, travels, moving to Stockholm, getting a topnotch job, yadayadayada. It at times felt more like a waterfall crashing over me. ‘Career! Travel! Meetings! Dinner! Expat life! Apartment hunting! Dinners!’