After three years of heavy traveling worldwide, I settled in Bali. Then it was 2019, and I had this offer on the table from my landlord to take over my business and refund its entire value. And I did it. So, by the end of 2019, the money for the early cancellation of the rental contract of my business ended up in its bank account. With that amount, I was already financially secure! However, I was unable to invest it. I tried to open a broker account for my business in Germany, but the rules and regulations were so complicated. They kept sending me contract forms with 30 to 50 pages. I tried to open a broker’s account for my business with three brokers, but none worked. They all complained that something wasn’t filled in correctly, so I finally gave up. So, I held the money in my bank account, and it couldn’t work for me.
Then, the pandemic started, and Indonesia was smart enough to say that all visitors could stay as long as the pandemic was going on without getting a Visa extension. So, there was no need to go on Visa runs anymore. Still, most of the short-term visitors who had been in Indonesia left, so there was a lot of competition between places to stay, and the cost of living went down a lot. During that time, my cost of living dropped by about 50%. This means that Bali went through a deflation of about 50%. So, I was only spending half of what I usually did on living costs, and since I no longer had to pay for travel, I could live on a very, very small budget. And that was a nice thing!
After the pandemic caused the market to drop sharply in the middle of 2020, I had an idea: I should just change my business, Rooms4Music, into my own bank. First, I converted it into a holding called “4ster Holding GmbH”. It just lent me the money in its bank account as a credit. See, now it was possible to invest it in my private broker account. Since then, I had invested it in stocks and ETFs at a time when most of them were dramatically undervalued. I also didn’t need a broker’s account for my business in Germany. This ended up in a pretty good situation because after the drop of the market, a lot of growth took place, stock prices rose, and I still lived on a very, very low cost of living.
Also, if I invest privately, the earnings are taxed at a rate of 25%. But if I invest as a business, they are taxed at the rate of the business’s earnings, which is 30%. But, well, there are different tax rules for both of them, so it only turns out cheaper or better if I’m trading with a slow hand, not turning over my assets very frequently in my private depot. But at least that was also a kind of optimization for the taxes.
In 2019, I also attended a seminar called “Steuern Klug Steuern.” It was about how to handle your taxes better, and of course, it was about the German tax system. I tried to use what I had learned at the seminar. But by the end of the day, it was almost useless. The most important thing I learned from this seminar was that I just needed to get rid of the German tax system because it’s so unbelievably complicated that you can only run away from it.
Here in Indonesia, the tax rules and tax rates are much better. For example, income tax is a flat rate of 10%, and small businesses are not taxed at all.
But what about the tax on selling real estate? When we buy real estate in Germany, we pay between 3 and 5% of the purchase price as a tax. It’s less pleasant in Indonesia because, first of all, it’s a sales tax, which means you pay the tax when you sell the property, which usually has a higher price and, as a result, a much higher amount of taxes. Plus, the tax rate is 10%, instead of 3 to 5% in Germany.
The tax situation for real estate is not as good here as it is in Germany, but the growth expectations are much higher. So, Indonesia has inflation of almost 10 percent a year. You can easily tell by the amount printed on the money. So, the smallest bill you can get is 1,000 Indonesian rupiah, and the biggest is 100,000, which is about 6 euros or 6 US dollars at the time this was written. See, those big numbers on the rupiah bills reflect the inflation they had in the past. Because of this inflation, the value of assets, especially real estate, has gone up by a huge amount. So, you can easily expect real estate prices to go up by ten to twenty times in the next ten years. In Germany and most of the rest of the Western world, on the other hand, prices probably won’t go up by more than 20, 30, or 50%. So, even though the result will be taxed more in Indonesia, the growth and earnings expectations are bigger.
However, I am unable to invest here directly or buy land. But it doesn’t matter. Because on July 7th, 2020, I met Komang at the cacao ceremony at the Udara Yoga place. We fell in love and have been together ever since. She now acts as my nominee. So I keep giving her the money as a credit, and she invests in her name. In the end, we split the profits. That’s a very good thing because she keeps bargaining for local prices, which makes investments and buying things cheaper.
When I got married in Germany in 1998, my living costs increased by about four times! I tried to shovel money, but my wife kept burning it! And now, since 2022, when I got married to Komang, she keeps haggling over prices until she gets the local prices. Together, we live more cheaply than I could do it on my own!
One year later, after we met at the cacao ceremony, we married on August 22nd, 2021. Well, ever since we moved in together, I’ve been helping my wife organize prana healing retreats, and since then, her business has gone through the roof. That is so wonderful to see.
Since I am an investor and can live off my assets, I have the financial freedom to work on whatever I want, as long as I don’t get paid for it here. And so, whatever I love to do, I’m doing it! And whatever my wife loves to do, she’s doing it! So she keeps teaching classes in prana healing, yoga, qigong, and, well, whatever! And that’s her passion. My passion is to help her grow her business, and, as I said before, it’s great to see how her business is going through the roof.
Komang is so good, and she loves to bargain with the locals. She gets the best prices here, which keeps our costs down and lets us
Enjoy our financial freedom and live abundantly in paradise.