What’s The Deal With FIRE in Europe?

EU-FIRE

When I started this blog in September last year, I did so with the thought there weren’t much Dutch or even European finance bloggers out there. Little did I know.

I’ve connected with the world of #FIRE through 2 top-notch bloggers out there, Jason Fieber (formerly known as Dividend Mantra) and MMM. When Dividend Mantra was no more, I quickly ended up looking for other blogs and found sites like Dividend Diplomats and later on some others as well. But it wasn’t for after I started Divnomics when I learned how big this community really was.

Still, it looks like the growing flow of FIRE and personal finance blogs has much more ground in the US than in Europe. How could that be, and is it really the case?

It’s very interesting to learn how tax systems work in other countries, how governments view change when it come to retirement planning and the value of money can be so inherent to the place you live. Sometimes I wonder if that’s the same the other way around?

Over the past month, I’ve met several other Dutch bloggers (in digital and real life) and continue to find more and more blogs from Europeans talking about money. What really helps are the blogrolls on various sites I follow, which eventually was the reason I’ve put up one of our own.

I have no clue on how long this community already exists, or that it just magically appeared when the number of interested people reached a certain point. There are some among us that retired more than a decade ago and others that are just starting out. I count us to the latter, obviously. And there are some which don’t write but only read. And are fueling this community with their views and opinions. The number of blogs might only be the peak of the iceberg you see floating above the surface. The true community is much bigger than that.

Related: there is a beautiful post on the history of F.I.R.E on Rockstar Finance

The Personal Finance blog directory already contains 1050 personal finance blogs from all over the world. Because of this directory I now know the following things:

There are many registered blogs on money and personal finance and still counting.

And only 7 of them are from Dutch bloggers….

PF-directory-Dutch

The biggest source of EU blogs is the UK, with almost 60 sites in the online blogosphere. What is going on there? Somebody knows?

But the biggest chunk of the blogs is originated from the US, with 779 registered blogs.
This means that the majority of Personal Finance blogs is written in English. Which are not limited to US and UK blogs only.

I know there are more blogs out there than there are just in the PF directory, and more people involving with early retirement than only bloggers. Thanks to the meet-ups from Cheesy Finance and Amber Tree Leaves, the fire is spreading already.

However, if it wasn’t for this directory… how long would it have taken me to found out about these blogs?

It’s a great thing that so many people are sharing what they know and are openly talking about their numbers. And it’s even a much greater thing to reach an audience that gets something out of your writings.

But for some reason, on this side of the pond, it still feels a very small thing. A movement that just didn’t get totally off the ground yet. And I have no idea on how this came to be.

There a few reasons I could think of on why this might be so:

Scattered languages and regulations

Across Europe, we don’t all speak the same language or are living under the same governmental circumstances. For example in the Netherlands, you only pay 15% taxes over dividend income. In Belgium, this tax bracket is 30% which is the double then I’m used to. Also the ages on when you would have to retire differ per country, and even more importantly: the way you build up a retirement fund through work or on your own varies a lot.

The US is much bigger in the sense of the rules and circumstances are more equal. So more people face they same opportunities and limitations and are also more likely to share them with each other.

One of the regulations that are really different than in the Netherlands is that you have to invest into your own retirement account, and therefore need a pro-active attitude in order to retire with a soothing mind. In the Netherlands, you’re directly enrolled into a retirement fund when working, you don’t have to add anything yourself. The input for this fund is automatically being arranged between the employer and the pension fund. So it’s made very easy for us to just relax, work over a lifetime and have a very decent retirement waiting for us at the end.

A big reason to start with FIRE in the Netherlands is the ever pushing backward retirement age (currently 71 for me) and the negative pressure on retirement payments due to the low-interest rates set by the ECB. These were the reasons that made our decision to pursue FIRE much easier. So yes, we notice a trend that more people are looking for alternatives. But many don’t go past the frugal living stage or as we call it: “consuminderen” (consume less). But then without the idea of getting out of the corporate world earlier.

Media Coverage

Who doesn’t know the stories about the mediocre guy that build up 1 million dollars before 30? Or that couple that managed to assembled $500.000 and started traveling the world? Or the one blogger that earns masses of money with working from home?

Almost every story I read that covers something like the above is about people living in the states. In the land where you build your own dreams and build your golden mountains these stories help to inspire many others to realize it can be done within a lifetime. Of course, I’m talking about retiring early here. There is far less regulation in the US, causing it to be more interesting to just do it.

Besides the media in the Netherlands barely touches this subject, where investing can still be a scary thing and your retirement is planned for you. The shareability of these stories are less interesting here, or so it seems.

Due to fewer media coverage, there is also less information available for the average John Doe. How would they know that something like a FIRE or Personal Finance movement is on the rise?

Concluding

We have a fairly well social system here, and some other countries in the EU as well. I can imagine the intrinsic motivation to pursue entrepreneurship or FIRE might be less. However, in the Netherlands, there are numerous of entrepreneurs who start their own company each year. And there are numerous people that like to live more simply and maintain a meaningful life and perform the stealth wealth method.

So maybe we’re not that openly about our ambitions, online there is. I still feel restraint when I talk to others about it. And I would rather not at all. What if my co-workers find out that this is what’s going on? Building up a career seems contradictory with aiming for financial independence, and early retirement even more.

Sharing our stories is important. The internet provides an anonymous corner were I and many others can let out our money chatter to the other side, our readers.

I can’t speak for all of Europe, but only for my own experience from the Netherlands. So if you live in Europe and think of FIRE, speak up. Is FIRE something you can easily achieve in Europe? Is it bigger than I think? Care to share your own experience, no matter where you live? Would love to hear!

19 thoughts on “What’s The Deal With FIRE in Europe?

  1. Great post!We obviously have experienced the same as you, it is hard to find examples of people who FIRE in the Netherlands (and the language barrier does indeed not help in Europe as whole). I personally don’t know any, but have met a few people that probably could (these folks either love work and/or have not been introduced to the concept of FIRE).

    This scarcity is one of the reasons we started the blog, to let people in the Netherlands know it is very much possible. But living here does come with its own set of challenges and benefits. That being said, we did decide to blog in English to also make the blog internationally accessible, share ideas and get feedback.

    Think you have a good point about our pension system, which is generally considered as one of the best in the world. This does take away some of the urgency of arranging your own pension. But there are still so many people that don’t want to work that long, but fail to see alternatives.

    Seriously hope more people will start to blog about the topic, and specifically people that are already FIRE! Would love to learn from them.

    Like

    • Thanks, Team CF!

      And agree with what you say. I basically set up this blog in English for the same reasons.

      I’m glad we already got the chance to meet up and connect with people. Hopefully, it will be of help for other people looking for alternative ways as well. It sure helps that the PF community is getting stronger when more people decide to join.

      Like

  2. In line with the above, I think that the Belgian and Dutch system is considered as a safe system where you can always rely on the government to bail you out.

    In Belgium, you can hardly work a few years, loose your job, get paid (not a lot, enough for some) and still build up pension rights… On top of that, people assume that there will be a pension and that there will be a way to stop sooner with work…

    As long as that perception does not change, why bother.

    Maybe an interesting topic for the meetup: why are there no stories of people in EU that retire in their 30s.

    Some points
    High taxes compared to the US
    a system that is their to help. The US more rewards risk takers and has less support for people with problems (not saying I find that better)
    More ways to save in tax advantage systems
    more open about money?

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    • Yeah, both are quite similar. Although I do notice that in the Netherlands there lots of entrepreneurs, so do have the feeling of following a passion.

      It could certainly be an interesting topic for the meet-up! Don’t really know how you guys select the topics (and when) but would love to help out on this one. Just let me know!

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  3. Language barriers and different legislation can be the cause of less available finance related services. The US is way ahead of us. But it doesn’t explain why less people try to achieve financial independence within their own country.
    You mentioned tax and it can make a huge difference. We’re very lucky in NL that we only need to pay 15% withholding tax on US dividends. In most other countries it’s 30%. Just imagine you receive EUR 4k in dividends each month. You can get 3.4k after deduction. If you’re a resident of a country without such treaty, you only get 2.8k. That’s 7.2k difference per year… Actually this only adds more question mark to why are there so few FIRE bloggers from NL…

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    • The barriers of language and different legislation can also have the effect that the area of people with the same circumstances is smaller. Our words carry a shorter range than in the US.

      Interesting view on the low dividend taxes as a potential trigger to DO step into investing and building wealth. It might be that most companies paying dividends are US based. If I talk to someone local about investing in general, they often talk about Dutch or European companies.

      Like

  4. If I look at myself its only because I’ve been living on the internet for a big part of my life with a variety of different interest that I stumbled upon the FIRE community. Me becoming a parent sparked my initial interest in spending more time at home and finding ways to start a passive income stream.

    Although I’m just starting I’m still amazed at how helpful this community is.

    Like

    • Interesting that becoming a parent eventually set you on the path to FIRE. It amazed me as well when I first started out. And I’m glad that I did.

      Maybe we just have to find more people that are cruising online with a possible interest in finances 🙂

      Like

  5. Very interesting article Divnomics. I’m from the US, so take my opinions with a grain of salt here, but I think there are two key factors. 1. As you mentioned, the language barriers makes it difficult for blogs in foreign languages to attract the audiences outside of the native tongue. I’ve seen plenty of blogs that I would follow; however, their websites are not in English so I cannot understand what they are saying. I’m not saying they should change this to English just for me, but the audience they cater to is smaller as a result of it. 2. I think a lot of it is that there is a numbers game component to it all. Think of how much larger the US population thank each individual European country. While Europe as a whole is larger (population is doubled), the largest individual country’s population is Britain, which is much smaller than the US. Couple that with the language issue mentioned about each European country, and I think you may have a partial explanation for why there are less bloggers. But again, I could be completely wrong with my assessment. That doesn’t mean the FIRE isn’t burning as strong on the other side of the pond, it is just harder to find the places that are burning haha

    Thanks for the read.

    Bert

    Liked by 1 person

  6. Don’t know about Europe but here in Australia people certainly are a lot more wealthy on average than people in the states. The level of consumption and spending here is ridiculous. Everything is very expensive

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  7. Interesting post Divnomics.

    I think a big part of it may also be the social safety net. Folks in the US pretty much have to fend for themselves, which may drive them to take a more active role in their financial future.

    As you noted the tax system also plays a big part, for example whether home mortgage interest is tax deductible.

    Compulsory pension contributions are nice, but if they are inaccessible until around traditional retirement age that may also have something to do with the apparent scarcity of early retirees in Europe. People feel they are doing their saving/investing bit already, so perhaps can’t/won’t afford to duplicate that outside of tax advantaged pension wrappers.

    Liked by 1 person

    • Great comment, and agree with your points.

      I have been thinking more about this topic lately and the many differences on social security and taxes probably play a major part in the perception of the need to take action or not.

      This really makes a lot of sense: “Folks in the US pretty much have to fend for themselves, which may drive them to take a more active role in their financial future.”

      Like

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  10. Fellow Dutch here and I agree. Would love to read more about people in Europe pursuing FIRE. This post made me realise how important it is for me to share my own adventure, which should make for a good story.

    Short story: 27 year old nerd, never really wanted a regular job so moved to Asia for a few years so I could live cheaply. While there, I started a software business with a medium six-figure turnover (pre-tax) and am now in the process of putting that profit to work in a smart way. By no means financially independent yet (taxes take a huge cut), but if I play my cards right and my business keeps doing well, I should be able to fat-fire before I’m 40.

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  11. A little late to the party on the commenting here… but I wanted to ask if anyone put any consideration in to the amount of holiday time people in different countries get on average. I feel like the less vacation time you get, the more likely you are to pursue something like FIRE. I don’t know much about the vacation time in Europe (I’m from Canada), but I know that in Sweden (I lived there for a year), the family that I lived with had a lot more vacation time than I do now… There would be at least 1 week of ski holidays in the winter, lots of time off around Christmas, and then 3 or 4 weeks at the summer house in the summer… In Canada, we get at least 2 weeks holidays for the whole year, but in the USA, I don’t think they are required to have any paid holidays… If you have no time off, you are definitely going to get sick of working…

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    • Interesting thoughts, it could indeed be a part of why people are pursuing more freedom outside of their job. Here in the Netherlands, it depends on what kind of job you do, but there is a minimum of 4 weeks when working full time. Personally, my employer gives me 2 additional weeks per year. Don’t know how this works in other European countries.

      Never realized this was so less in the USA, and even compared with 2 weeks in Canada we still get a whole lot more….

      Liked by 1 person

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