Episode 11 – The Latin American Perspective of FI

Episode 11 – The Latin American Perspective of FI

Today we have an amazing episode with Erik from Hippies de Land Rover! We talk about FI from a Latin American perspective, his journey to FI and detailed investment strategy.

What we also talk about:

  • How Latin Americans react to learning about FI
  • Erik’s investing strategy
  • Why and how he started his company
  • Working in Switzerland
  • Spreading FIRE in South America

Very interesting to talk about FI from a not-so-well-known perspective – enjoy! (we apologise for the echo at the beginning!)


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Who is Erik?

Erik lives with his wife and two children in Switzerland. He is originally Mexican and Sofia, his wife, is Colombian. They’ve been working there for over 10 years, and plan to reach financial independence in 2019! Their plan: leave Switzerland and move to a ranch in the mountains of Colombia. Pretty cool.

BTW: Open a mintos P2P lending account with us and get 0.5 cashback for your first investments. We get a small commission at no additional cost for you. More info here.

 

FI from a Latin American perspective

Very interesting to hear the Latin American side of FI. Retiring early is pretty much something unheard of in South America, where Erik affirms the culture is pretty different, and everyone works till they’re old. What’s even more interesting are the reactions he gets from his friends and families when he explains what FI means to him. For them, it’s more of a dream than a reality. They are pretty mind-boggled at the idea of it.

I (Araminta), see this too when I go back to Spain. I talk to my friends about FI and they all use the word ‘Ojalá’, which means ‘I wish’. It’s weird and does get very frustrating, and even if you show them how the maths works and that it really is possible, they don’t believe it (I don’t even try anymore). Erik experiences this first-hand with his close family, which can be even more frustrating.

 

Erik’s investment strategy

We then move on to Erik’s very interesting investing strategy. We get very specific – an amazing way for listeners and readers to see how others invest. 

Erik used to trade a lot in options; an investment strategy whereby you sell a ‘promise’ to buy or sell shares at a certain time and a certain price. Contrary to popular belief, options trading is not as risky as it sounds and is a great way to earn passive income (people pay you monthly ‘premiums’ to keep those promises). We’ll definitely be doing an in-depth episode on options in the future 😉

Erik then gives us a very detailed breakdown of his asset allocation, which I’ve decided to put in a pie chart, because why not:

portfolio

 

We absolutely love learning about people’s investment strategies on the FI Europe Podcast because it is an excellent way of learning how to invest for yourself. Thanks to Erik for being so transparent! We hope you learn something from his portfolio (for more details listen to the episode #promo)

 

Erik’s company

You may have noticed in the pie chart that Erik holds 20% of his portfolio in his own company shares.

A few years ago, Erik did something pretty risky: he quit his corporate job and started a company. The plan was that although this would cut his salary in half, over the next 5 years it would increase and reach his old salary PLUS a big portion of company stock (which is now valued in the millions!!!). Clever guy.

Since this only takes 20% of his portfolio, he has a pretty good backup if the company fails.

In his words:

‘I could spend 5 years stuck at a sh***y corporate job with a high salary, or start from the bottom and create something that will bring me much more value in the future (in this case an even higher salary and a company he enjoys working with).’

Although pretty risky, and as he says ‘not very Mustachian’ I still love his mentality.

 

The future and the family

We’ve now interviewed three people who have worked in Switzerland (Alvar and Mr RIP are the others). Obviously this is a pretty popular place to reach FI because of the high salaries and great benefits.

How has this worked out for Erik’s family? They discovered FI about 2 years ago and loved the idea of living in the forest and not working until you die – taking inspiration from the Frugalwoods. They also now have 2 children and want to spend more time with them as they grow up. So the dream is to move to a ranch in Colombia, where both Erik and his wife Sofia have big aspirations to help the community.

Post FI looks like:

  • Sofia getting a research job in a university or ONG
  • Spending more time with kids
  • Contributing to the education system
  • Spreading the FIRE message

We agree and mention on the episode that Latin America is one of the places with a huge need of the FI message (I was there in April!). Erik will continue working on his blog and growing the community in South America. His goal is to then connect Switzerland’s support programs with Latin America, to create educational programs for the locals.

Sounds fascinating to me and I’m very much looking forward to seeing where they go!

With the FI journey comes the pursuit of life-optimisation, and Erik summarised the FI lifestyle perfectly in one sentence:

‘FI is not only about achieving the number, but also about the person you become by getting there’

He also mentions the importance of ‘achieving more in less time’ and learning how to ‘allocate your efforts the right way’.

Erik just kept dropping amazing life quotes after another. Amazing.

 

Links

 

Erik’s number 1 tip to reaching FI: Believe in it. It’s not the number, it’s not the money, it’s the journey.

This guy…

Make sure to check him out and drop a comment below on what you thought of the episode!

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P.S. The Barack Obama parody in the beginning of the episode was brought to you by MR RIP

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