Luu Hoang is a frugalist. He invests his savings in ETFs and individual stocks. Getty Images
Luu Hoang, a doctor of engineering, came to Germany as a refugee from Vietnam. His parents raised him to be a frugal person.
The young man has lived as a frugalist for many years. He saves up to 60 percent of his monthly income. The 34-year-old invests his savings primarily in individual stocks and ETFs.
Luu Hoang saves up to 60 percent of his money every month. But the frugalist makes no secret of the fact that this is only possible because he has a sufficient income as a doctor of engineering.
The East Westphalian has built up a financial buffer in recent years. His portfolio is six figures (Business Insider got a glimpse into his portfolio). He only works because he wants to and finds it important for society.
From Vietnam to Germany
Hoang came to Germany as a refugee from Vietnam as a child. He now wants to give something back to the state and society with his work instead of living on his savings. “Everyone who gets up and works makes a contribution to the system and ensures that people have health insurance and can receive a pension when they get old,” he says of his motivating factor.
FAQ: Frugalism
What is a Frugalist?
Frugalists are people who want to achieve a high savings rate by living frugally in order to become financially independent at an early age. They are financially independent if they can live solely on their assets and are no longer dependent on work.
How much money do you need for this?
This depends on your own lifestyle and the associated expenses. Frugalism calculators can help you plan your savings rate and withdrawal rate, taking into account the assets you have already built up and your annual return.
How much do frugalists save?
According to “statesmanBefore the pandemic, an average of around ten percent. Frugalists want to save significantly more: Some frugalists describe themselves as saving from 30 percent, others save 80 percent and more.
How is frugalism possible when inflation is high?
High inflation makes frugalism more difficult. Because inflation rates are averages, prices rise more in some areas than others, including electricity, gas, gasoline and heating oil. Saving money here is more worthwhile. There are many ideas – an electric blanket, for example, provides just as much heat, but is much more economical than heating the entire apartment.
Hoang spends an average of 1,100 euros a month – on groceries, his rent and his leisure activities. Hoang is investing significantly more money in his future: he has a savings plan in the high three-digit range for investments in ETFs alone. Savings also actively flow into individual stocks and cryptocurrency.
The 34-year-old selects the individual stocks for his portfolio using a special strategy: He values high cash flow – not only through price gains, but also through dividend payments. Over the years he has built up a six-figure portfolio that allows him to “sleep peacefully”. “Knowing that you are financially secure makes life a lot easier and reduces stress significantly.”
The frugalist relies on a special type of stock
“I focus on dividend-paying stocks,” says Luu Hoang. These are stocks from companies that are known for their long-term and reliable distribution of dividends. These are often established, financially sound companies with long, profitable growth.
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