Luu Hoang has gradually increased his savings rate since his studies. Getty Images
Luu Hoang has lived as a frugalist for many years. He no longer aims for a classic goal, i.e. retirement at 40. Rather, he wants to achieve financial emancipation.
The 34-year-old came to Germany as a refugee from Vietnam. He would now like to give something back to society and the state for the support that he and his family received back then.
The engineer with a doctorate saves up to 60 percent of his salary every month. In an interview with Business Insider, he reveals his rules that help him keep his money together.
He hears it all the time, this one question. But she doesn’t bother him. Quite the opposite: He even likes to answer whether life isn’t too short to save so much money for the future instead of living in the present. “I enjoy the here and now. It’s not that I’m missing something.” That’s what Luu Hoang says. He is 34 years old, has a doctorate in engineering and is a self-confessed frugalist.
He saves up to 60 percent of his money every month. “I live a life in which I don’t indulge in excessive material things,” explains the East Westphalian. Unlike many other frugalists, he does not aim to retire at the age of 40 or 50. “My goal is to emancipate myself from work in order to reduce the pressure and stress.” The fact that he brings added value to society is a nice side effect.
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.
In an interview with Business Insider, Luu Hoang makes it clear that not only his environment is important to him, but also the well-being of society as a whole. The young man suspects the origins of this thinking lie in his past. “We came to Germany as refugees in the early 1990s,” says the now 34-year-old, who was born in Vietnam and grew up in the Minden-Lübbecke district.
Finances have been a very present topic in his family since childhood. “We came to a new country as refugees, where you don’t live in luxury. At the end of the month the question is whether there is enough money,” he says. The family never lived in abundance and it wasn’t always easy – “but still much better than in the country of my birth. We were very lucky to have received such support from the state,” said Luu Hoang.
Retirement at 40? “That made total sense to me.”
It was only thanks to this support that he was able to graduate from high school and then study industrial engineering. At the age of 19, he left North Rhine-Westphalia and moved to Hamburg. “From that moment on, I had to manage my finances on my own.” It was around this time that he came into contact with frugalism for the first time. “It made perfect sense to me, not having to work for so many years,” he says.
The young man put a large part of his money aside and was convinced that he would retire at the age of 40. But he quickly realized at that time that this meant a “crazy limitation” at this age. “No matter how hard I tried, it was not possible to put aside 50 or 60 percent of the little money I had from student loans and student jobs.”
Financial emancipation
Financial emancipation refers to the process in which a person frees himself from financial dependencies or constraints. This can be done in different ways. On the one hand, the person can acquire knowledge about financial matters and thereby gain greater control over their own economic decisions. On the other hand, the person can learn to manage money, avoid or reduce debt, and develop a lifestyle free of credit.
It’s different today. His bachelor’s and master’s degrees have now been completed and Luu Hoang even has a doctorate in the field of automation technology. “I gradually increased my savings rate over the years, and it’s now consistently up to 60 percent,” says the 34-year-old. He has moderated his consumption a lot and lives a very minimalistic life. How? He told us this as well as his best tips for financial emancipation.
There has been a rethinking in East Westphalia in recent years, he says. A few months ago he quit his job and used the time to think about his future and life. Like many others “from my generation,” he felt overwhelmed by the workload in the digitalized world. The pressure to exist is enormous,” he says.