I feel like you are incredibly privileged that you can afford to to have a family while working so little hours in the public sector and I suspect your situation is not the norm in DK.
Friends of mine who moved to SE/NL/DE/DK are definitely working the full 40h/week and sometimes more since, as they say, living there is very expsensive.
From my experience, the Europeans who toot their "life is so good here, why do other people work so much?" horn are privileged enough to have a hand-me-down property bought/inherited from their (grand)parents, and since rent/mortgage is the biggest expense here, with property prices rising 8 times faster than wages, that property ownership early in life, which they take for granted, gives them the clear advantage that allows them to not bother with the rat race and could even live comfortably on minimum wage.
That of course, is not the norm for everyone and especially not if you've just emigrated here, so anyone wishing to own their own property one day has no choice but to jump in the meat grinder and join the rat race.
For what it's worth I live in Denmark, working a private sector full time (37/week, usually less) job with a nice salary - though nothing out of the ordinary for my education and experience. Came from a middle class family: My mom is a nurse and my father is an engineer. No life-changing inheritance from grandparents (~$10.000).
My wife stays at home with our 2 year old daughter.
We own an apartment in Copenhagen that we bought some 5 years ago, though we're obviously still paying a mortgage on it (0% loans definitely made that easier!). We're paying it down aggressively, though still have quite a bit of cash left to invest.
From my experience it's about priorities. We rarely go out to dinner and don't own a car - hopefully never will. Rarely buy new clothes.
While it might not be the norm, it's not something that's completely unheard of.
One major factor though is probably student loans. When my wife and I left the university we both had savings of roughly $15.000. A year later, we bought the apartment. That would have been impossible if we had debt we needed to overcome first. If your friends moved here with significant debt, they're definitely playing catch-up compared to their peers.
This is true logically, but it's important to understand that most people behave based more on emotion than logic. Being debt-free brings a peace of mind that you don't get with rational maximization of returns while maintaining debt unless you are particularly mathematically inclined.
There definitely are investments that have a better risk/reward ratio than carrying a 0% interest debt on a mortgage.
e.g. savings accounts with 1% interest in the EU which are government insured up to 100k. Plus mortgage debt tends to have fiscal benefits in most countries, too. That's a better idea than paying off a 0% mortgage. Especially past a certain point where there's plenty of equity in the home.
There's generally virtually no financial reason to pay off a 0% debt apart from some edge cases here and there. People do it for peace of mind, which is of course fine, but it only works because of financial illiteracy as it's not the most financially optimal decision to make. (even not the least risky).
The problem with "financially optimal" strategies is that tend to ignore the fact that income can be lumpy. If everything is steady-state then it's "optimal" (as in better returns) to run highly leveraged. The problem is that life for individuals is not steady-state: you might lose your job, the economy might crater, the currency might get devalued, the property/stock market crash, etc. A 0% loan on a residence can be quite a problem if your income is 0 for some reason. Unlike a CEO who still gets his golden parachute if his highly leveraged, "financially optimal" company encounters "unforseeable" "turbulence" and ends up bankrupt, a bankruptcy in Me Myself and I, Inc. could be disastrous. Like, family on the streets disastrous. Individuals opting for peace of mind are minimizing downside risk, not maximizing "upside potential". Financiers can afford to take risks that end up with them blowing up, but when it's your life that blows up if some problem comes, minimizing the downside is a pretty maximizing strategy. The fact is, we know there we be periods of difficulty, we just don't know what the specific difficulty will be in advance.
I've got no clue how that's really meaningful in this case. I just mentioned there's a 1% interest government-insured savings account available, i.e. if the bank goes bankrupt, you still get your money. The only instance where you don't get your money is when the government goes bankrupt and doesn't honour its obligations. In that scenario, your mortgage debt would be even more screwed.
Meanwhile, getting 1% return on a 30 year mortgage puts you in a much safer, financially cushier position, than having had 0% returns for that period in time. Would you rather have 40k saved + 10k interest saved up in savings saved up in a government-insured savings account when you lose your job, or would you rather have a 40k lower mortgage debt and slightly lower payments or a lower time-to-payoff? Particularly given that mortgage payments can be furloughed and negotiated in times of payment difficulty. The answer is very clear. Choosing 0% returns over 1% returns in this case is the riskier choice.
Is it though? if you have a 0% loan wouldn't it make more sense to pay as little as possible to the loan, and the surplus you save invest in something that gives you a return on your money?
Loan is structured in 2 parts: Bankloan and mortgage.
Mortgage is at roughly 0% and has a fixed payment for the duration - I cannot pay it differently than the initial agreement.
The bankloan is at (I believe) 3%. I've roughly doubled my contributions to this loan, making it roughly equal to the amount I'm investing each month. I'm missing ~$10.000 on it now, so I think i'll just pay it down and have that out of the way.
Being ahead also means that I'll have a way easier time if I ever need to buy something big one month - I can just choose not to pay that loan and not invest this month and I'll have plenty of money to spend. It's nice having some free cash flow :)
That's not true in my experience -- at least in the Netherlands. My friends and family have wages that would be considered low in the US, but they live very comfortable lives and many of them work four days a week.
I looked it up and the average work week in the Netherlands is apparently 29 hours a week [0]. The average inheritance in the Netherlands is €23K [1], and as another commenter mentioned many people don't receive an inheritance until they're in their 40s or 50s.
So many people in the Netherlands are able to live a comfortable live while working part-time, without having to
rely on an inheritance.
EDIT: However, as you pointed out, rising housing costs are an increasing issue in the Netherlands. The issue is that not enough houses are being built. I hope that that's something that'll be addressed soon.
> EDIT: However, as you pointed out, rising housing costs are an increasing issue in the Netherlands. The issue is that not enough houses are being built. I hope that that's something that'll be addressed soon.
This is often said but I'm not sure it's true, I'm not sure if housing costs rising is really because of too few houses being built.
There's a few things to untangle. First is housing costs. They've not actually risen so dramatically as people think. Home prices have increased, but interest rates have sharply decreased. From a peak of 13% in the 80s, to 5% prior to the 2007 crisis, to around 1% today.
To put that into perspective for a 30 year mortgage: in the 80s on a 13% interest rate, you were paying the full mortgage price every 7 years, just in interest alone. Today, you pay the full amount in interest alone just once every 100 years.
Second, nominal prices increase a lot, but nominal wages do, too.
The better approach to look at housing costs is not to look at prices (which the media and regular folks go crazy about), but a simple indicator: % of wages spent on housing. And this metric hasn't really gone up radically. It's been on the rise again recently, but it's also below historical peaks.
But then we still don't know if we simple don't have enough homes, or enough homes to satisfy new desires and cultural norms. I think it's the latter. The number of homes in the Netherlands has outpaced population growth the past 50 years. The number of households has also outpaced population growth. And the average number of people per home has decreased. And the average home size has only increased. In other words, it's not necessarily a housing problem, it's more of a luxury problem, at least when compared to the past. We've got more housing per person than ever, yet we feel as if housing is unattainable. In large part that's because we don't want to share housing as much anymore. There's a ton of people, even in relationships, who prefer to have their own home instead of share like Dutch people did much more in past generations. That's okay, I do too (and live by myself, I prefer it), but that's a choice of luxury, not some kind of human right. Home-ownership has never been higher.
Lastly, there's location. You can have a trillion square metres but if it's not in Amsterdam, we'll still have people say there's rising housing costs because they can't live in Amsterdam. There's actually a lot of affordable real estate in the Netherlands, it's just not going to be in the capital in cycling distance from work. And again, that's a choice/preference, not a human right. Living say 45m or an hour from work is seen as a lot in the Netherlands, in many countries that's quite normal. A lot of what we see as high housing-costs in the Netherlands, are considering prime locations. When talking about affordability, with Dutch public infrastructure, you'd have to look at 30-60 minutes away from work. Most of that real estate is very affordable.
That's not to say housing costs aren't on the rise or that it's all fine or without any issues... there's definitely issues. But I think a bit of nuance is important, too. People (not you necessarily) act as if the Netherlands has a housing crisis and sometimes it gets overblown.
As for your link on inheritance, I think median figures would tell a very different story. I'd guess that the bottom 50% inherits basically nothing, and the top 30% a lot. Many of my friends who went to uni have parents who own a home that's >500k, a pension fund, investments, some cash. A lot of these will at some point be getting a very large handout that basically covers their retirement goals and means they really don't have to do any kind of saving on the side (apart from the employment pension package) and can spend every penny they earn. That technically also allows people to work less.
Anyway, so much for the pedantics.... On your larger point, I fully agree. It's absolutely quite possible and quite normal too, to work parttime, even those without any inheritance. I currently work 40 but I could easily do 32, even 24, financially speaking.
I think you might have to be privileged to never work full time, but I know plenty of people of different backgrounds in Europe who in their late 20s early 30s started reducing how much they work for one reason or another and were able to do so. On the other hand, I know very few in my age group (mid 30s) that live in a hand-me-down property. If there is such a property in the family it is usually where the parents live.
Of course reducing work, comes with compromises what you can afford and is not feasible for a lot of jobs. And yes, for certain goals/timeframes there is no choice but to jump in the meat grinder, at least for a while. But there often are alternatives to stay out of it and live a comfortable live.
Also if you move to a country from abroad it will take you a while to live there efficiently. E.g. many of the expats I met in Switzerland complain about how much of their salary they spend on restaurants, services, etc. Sure it's very expensive, but they also use them like ten times more often than a Swiss would. Same for me as a Swiss living in Colombia. I regularly overspend just by being used to do things a certain way and being ignorant of the tweaks.
> Europeans who toot their "life is so good here, why do other people work so much?" horn are privileged enough to have a hand-me-down property bought/inherited from their (grand)parents
Most people never get any inheritance before their parents die; you're basically retired when it happens.
People with a decent job in Europe (such as engineering) have a pretty comfortable life without considering any inheritance, even if they're paid less and work less than American equivalents.
In Norway, you can "slave away" while paying the equivalent to a $1500/month rent on a small-to-medium apartment, or pay down mortgage on a $400k "starter" apartment in the city.
But if you're lucky, you can find a more rural job, where you only pay like $500/month rent, or could just buy a whole house for the same price that'll get you a small 1 bedroom apt in the city.
There's a ton of variance in the prices here. But then again , larger cities = more jobs. Especially in tech.
Friends of mine who moved to SE/NL/DE/DK are definitely working the full 40h/week and sometimes more since, as they say, living there is very expsensive.
From my experience, the Europeans who toot their "life is so good here, why do other people work so much?" horn are privileged enough to have a hand-me-down property bought/inherited from their (grand)parents, and since rent/mortgage is the biggest expense here, with property prices rising 8 times faster than wages, that property ownership early in life, which they take for granted, gives them the clear advantage that allows them to not bother with the rat race and could even live comfortably on minimum wage.
That of course, is not the norm for everyone and especially not if you've just emigrated here, so anyone wishing to own their own property one day has no choice but to jump in the meat grinder and join the rat race.