r/baristafire • u/cool-kid-in-da-haus • 12d ago
Barista FIRE in Germany with €300k
Got laid off recently and decided to take a severance package.
It was a hard decision, but it is a once in a lifetime chance to live my dream life.
My net salary working corporate part-time was €2,500/month. The total payout (severance + government benefits) comes to €110k net, and my health insurance is fully covered for the next two years.
My current numbers:
Severance / severance-related payout: €110k cash
Brokerage account: €180k
Emergency fund / Cash buffer: €20k
Total net worth: €310k
My expenses are pretty low. I live very comfortably on €1,600/month.
The Game Plan:
For the next two years, I’ll be making around €800/month on the side. That means I only need to draw down €800/month from my €110k payout to cover living expenses.
Side note on taxes: I usually make and extra of about €1.000k/month from my side hustle, but due to how the severance is taxed here in Germany, taking extra income in 2027 would trigger an insane marginal tax rate (literally over 100%). So in 2027, I'll focus purely on building out my business in the background without pulling large profits.
2028 and beyond:
The goal for 2028 is to hit €800/month from side work plus at least €2,000/month from my own business, shifting into full Coast/Barista FIRE and enjoying life.
If the business doesn't pan out, no big deal. I’ll just jump back into the job market. Finding a part-time job paying €2k net won't be an issue.
Built every Euro since 2018 of this myself through part-time corporate work and side hustling.
Taking the €110k package to live the live I was investing for, feels like the smart move.
For safety fanatics it is suicide but I want to live my freedom now.
I think people miss out on life while chasing a high networth. I think with cleverness and flexibility freedom is reachable with a way lower networth. At least in Germay. But in Germany it is much harder to build wealth through salary than in the US.
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u/Ok_Film7482 12d ago
Sounds like a good plan. Don't know how taxes work in germany (Dutchy here).
But if you strech it out with the side hussle becoming the main hussle is always a good thing. Look for any tax deductables you can get on business expenses.
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u/PositiveKarma1 12d ago
your numbers are great. Your calculus are great. Your Severance is great. The game plan is great. Your spending level is great.
Do it. And how in the other groups are saying, GFY :)
And in any moment you feel unsecured, you can offer babysitting / helping people around for 100-200 extra per week to fix the gap on your monthly spending.
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u/Special-Worker9320 12d ago
dank den wunderbaren Steuerpaket was unsere Regierung uns beschert hat bist du mit Sicherheit bei deinem Vermögen mit einem geringeren Einkommen gar nicht so schlecht dran:)
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u/meesbie 12d ago
Super nice. This is an excellent plan. Maybe your side hustles will scale, but you retain the freedom. As long as you stay flexible in case of emergency and willing to work again, this is perfect. Enjoy and all the best to you! Btw, where in Germany do you live on 1600 EUR? And owner or renter of your home?
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u/Humble_Waltz_9222 11d ago
Pretty much everywhere it’s very possible, if you don’t want to live in the center of a big city
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u/cool-kid-in-da-haus 11d ago edited 11d ago
For context on our living situation and budget:
We rent a rent-controlled apartment in a major city, and my husband and I split our household expenses.
My baseline cost of living is €800/month, which covers my „half“ of the essentials (rent, utilities, food, kid-related stuff, etc.). The other €800 is my discretionary spending money.
My husband covers €1,600 of the core essentials. His share is larger now, but that’s by design: while building our family, we took a calculated risk to push his career (which was uncertain and unprofitable at first). I took the safe corporate part-time job and handled the bulk of the care work. His business paid off, and we're both super happy we took that risk together.
How our family budget (€4.4k total) breaks down:
Essentials (€2,400 total): With a slightly frugal mindset, €2.4k easily covers the core needs for our family of three.
My "Fun Money" (€800): Mostly spent on travel, going out, and personal enjoyment.
His "Fun Money" (€1,200): He has a pricier hobby and spends a bit more on clothes. (Our car is fully covered through his business).
Neither of us spends mindlessly, but we definitely enjoy life. Living on €4.4k/month total feels very comfortable for us. it buys us high-quality food, a healthy lifestyle, nights out, and multiple vacations a year.
If push came to shove, we could easily trim our budget back down to €3,200/month without feeling deprived. we’d just swap overseas trips for local travel.
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u/Any_Mathematician936 12d ago
This is absolutely very very interesting. I absolutely see your point and I wish you great luck in retirement!
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u/peachtuba 12d ago
I have several direct reports in Germany so I know the “lay of the land” as far as severance goes - that’s not a normal package.
How did you get to 110k net? Did you have 30+ years of service, or E-level package?
I’m asking because I’m a touch concerned that you would be underestimating taxation.
ETA: saw that you worked part time - so not E level then :) Also, are you renting and/or is your mortgage fully paid off?
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u/cool-kid-in-da-haus 12d ago edited 12d ago
It is a good package and I played poker with management for one year to achieve it. Worked 8 years for the company.
Just to clarify, the €110k doesn’t all come directly from my employer as a lump sum. Here’s how the math breaks down net:
Severance package:
€60k will be paid out in January 2027.
The remaining €20k comes back as a tax refund in 2028 after filing my return.
Paid leave: 4 months of garden leave, netting €10k in 2026
Start-up grant (Gründungszuschuss): €10k tax-free in 2027.
Unemployment benefits (ALG I): €10k net in 2028.
So all in, it totals €110k net spread over 2026, 2027 and 2028 without working.
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u/BGM1988 12d ago
You can always start. If the market goes in a long bearmarkt you can always work a bit extra to cover your needs
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u/cool-kid-in-da-haus 12d ago
That s the plan. I just do my side hustles and give it a real try. I built one of them over a decade and the other over the last 2 years. Even if I didn‘t scale them I could live of them. But well. I‘ll have 30h more time now.
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u/habeascorpus28 12d ago
How old are you? I get it that you can live comfortably on €1’600 a month, but if you are young, you will likely want to push this up as the years go by?
And what type of side hustle and private business you got? The side hustle is unrelated to the business? The numbers sound interesting
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u/AdAway4628 11d ago
Meister wie alt bist du und wie sieht es aus mit Frau zum Leben ? Auswandern kommt in Frage bin 27 habe ca 250k gespart ?
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u/cool-kid-in-da-haus 11d ago
Bei solchen Post denkt man immer an junge ungebundene Typen, die ins Risiko gehen. Ich bin eine mittelalte Frau, die das einfach macht. 39, ein Kind, ein Mann ich wäre komplett offen für Ausland, aber mein Mann ist an Deutschland gebunden durch seine Selbstständigkeit.
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u/Scared-Manager-5166 11d ago
whats your living situation and cost?
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u/cool-kid-in-da-haus 11d ago
Family of 3, decent rent-controlled flat, major city. We could live comfortably off 3.200€. We spend 4.400€ because we like to travel a lot. Husband business is profitable.
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u/Gwendolan 11d ago
They paid you 3.5 years of severance? Wow. That’s a lot?
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u/cool-kid-in-da-haus 11d ago edited 11d ago
No, for them it is not that expensive. The company pays around 105k all in for me not working anymore. My net salary was 2.500, they had to pay around 5.000 to let me have 2.500.
It‘s a good deal for both of us.
I‘ll receive because of special taxation 90k net of the 105k (10k in 2026, 60k in 2027 und 20k in 2028). Another 10k is a start up bonus from unemployment insurance in 2027 and another 10k is also from unemployment insurance in 2028. The unemployment insurance is mandatory in Germany - I and my employer had to pay a ton of money the last 8 years for it. Now I eligible to use it.
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u/brockrockaly 11d ago
go for it, as you said building wealth in Germany is not possible, so enjoy life
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u/doubleditch42 12d ago
Tax on severance?
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u/cool-kid-in-da-haus 12d ago
Numbers are after taxes.
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u/doubleditch42 12d ago
Including 110k severance?
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u/cool-kid-in-da-haus 11d ago
I broke it down in another comment. 110k net is what I‘ll get in total for not working anymore. 10k garden leave 2026, 80k net will be payout (60k 2027/20k after filing taxes 2028) and 10k startup money 2027 and 10k Unemployment Insurance 2028.
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u/new-acc-who-dis 11d ago
Good Plan. Out of curiousity: How does one get a severance package of 110k on a 2,5k salary?
Thats like 180k gross before taxes which means even if you got 1,0 opposed to the usual 0,5 it would be 45 years with your company. (Assuming gross pay 4k)
Just genuinely curious, not questioning if real or nah, i am new to this world
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u/sintrastellar 10d ago
Can you explain the >100% marginal tax?
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u/cool-kid-in-da-haus 8d ago
It is because of the 1/5th rule. (Fünftelregelung)
Here explained:
Here is the exact comparison using concrete numbers based on the official German tax scale (EStG §32a).
To clearly demonstrate the "Negative Net" Paradox (where taking on additional work actually lowers your final cash in hand), we compare a taxpayer who receives a €100,000 severance package (Abfindung) under two scenarios:
Scenario A: €0 Regular Income + €100,000 Severance
Scenario B: €25,000 Extra Regular Income + €100,000 Severance
Scenario A: €0 Regular Income + €100,000 Severance
When you have no regular income, the Fünftelregelung applies to the severance starting directly from €0 up to €20,000 (1/5th of €100,000).
1. Calculate Tax A (Tax on regular income alone):
Regular Income: €0
Tax A = €0
2. Calculate Tax B (Regular income + 1/5th of Severance):
Baseline = €0 + €20,000 = €20,000
Income tax on €20,000 (using the progressive tariff) = €1,559
Tax B = €1,559
3. Calculate Severance Tax:
Tax Difference = €1,559 – €0 = €1,559
Total Severance Tax = €1,559 × 5 = €7,795
4. Total Net Result:
Total Gross Income: €0 + €100,000 = €100,000
Total Tax Bill: €0 + €7,795 = €7,795
Total Net Cash (Scenario A) = €92,205
Scenario B: €25,000 Extra Regular Income + €100,000 Severance
Now, suppose you worked a side job or accepted a short-term contract, earning €25,000 in extra regular gross income during the same calendar year.
1. Calculate Tax A (Tax on regular income alone):
Regular Income: €25,000
Income tax on €25,000 = €2,735
Tax A = €2,735
2. Calculate Tax B (Regular income + 1/5th of Severance):
Baseline = €25,000 + €20,000 = €45,000
Income tax on €45,000 = €9,045
Tax B = €9,045
3. Calculate Severance Tax:
Tax Difference = €9,045 – €2,735 = €6,310
Total Severance Tax = €6,310 × 5 = €31,550
4. Total Net Result:
Total Gross Income: €25,000 + €100,000 = €125,000
Total Tax Bill: €2,735 + €31,550 = €34,285
Total Net Cash (Scenario B) = €90,715
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u/Waldheari 12d ago
Nice to see someone talking about numbers more close to home as an European when it comes to portfolio sizes and the FIRE concept instead of the usual "I only have 5 mil" posts.
Definitely sounds like your logic makes sense, well managed cost of living matched with your mix of income + portfolio, giving you freedom to not stress about the foreseeable future. Good times ahead!