Moving to Portugal for Financial Freedom – Part 1



Moving to another country to retire earlier

Have you considered moving to Portugal for financial freedom?

Financial freedom is a simple question of math: If you earn more from your investments than you spend, you’re financially free.

Cutting down on your 3 biggest expenses (housing, food and transport) will take you one step closer to living your life on your terms.

If you live in Northern Europe, moving to Portugal would reduce your costs of living.

Why Portugal?

While there’s many options worldwide, we prefer to stay in Europe.

My friend Mark moved to Portugal 3 years ago. He told me about all the benefits Portugal had to offer and after talking to him for a couple of hours, I couldn’t see any reason for staying in Denmark. Mark wrote a nice article about Portugal which totally convinced me.

As you can see on the map below, Eastern European countries are not expensive to live in. If you prefer to live in the Western part of Europe, Portugal is the cheapest with a “Cost of Living Index” value of 49.52.

Denmark, where I lived the first 40 years of my life, has a Cost of Living Index value of 83.00.

Most expensive of all is Switzerland with a value of 122.40.

   

Tax benefits

Another huge benefit for those who’re pursuing Financial Freedom is the NHR Regime, which can be granted to foreigners who wants to move to Portugal.

In short, the NHR Regime offers 10 years in Portugal with 0% tax on almost all foreign source income (including capital income from investments) and a 20% flat tax on everything else.

When we combine the low taxes with the low costs of living, most hours of sunshine in Europe, friendly people (of whom many speak English) Portugal is by far the best option for us.

Note: The Portuguese government is in the process of changing the NHR Regime, maybe to a 10% flat tax on everything instead of 0/20%. Either way, it’s still pretty good.

Leaving most things behind

The first 2 weeks of February 2020 were really stressful for us. We packed the things we wanted to keep and sold everything we didn’t need. More than 70 private appointments later, the sales of our belongings had brought in more than 15.000€. The rest was given away for charity.

My brother helped me sell our 2 cars after we left Denmark. This way we could use the cars to drive stuff away from our old apartment up until the very last minute. That was a huge help for us. Thank you brother!

Our “essentials” are stored away in a basement, which we have rented for 6 months. When we find a long-term place to live, we will have it shipped in a small container to us.

Now the “de-cluttering” is done, it feels really good to be free of all the stuff we rarely used.

After downsizing, this is all we own

Moving to Portugal for Financial Freedom – The journey begins

On February 15th 2020 we took the train from Denmark to Hamburg, Germany. Then we flew from Hamburg to Lisbon with 4 x handluggage, 2 x 20 kg suitcases, a carseat and a stroller for the baby.

My to-do list

  1. Rent a short-term home through Airbnb* – Check
  2. Rent a car – Check
  3. Get my NIF number – Check
  4. Open a Portuguese bank account – Check
  5. Learning Portuguese – Work in progress
  6. Find a long term-rental close to a good school – Work in progress
  7. Socialize the kids
  8. Apply for residency
  9. Buy a car

Finding a temporary place to live

We found a nice little 2 bedroom house on AirBnB* for the neat price of 500€ per month, everything included.

It’s in the middle of nowhere, it takes us 15 minutes by car to get to the nearest big city. We like the countryside views and it’s fine as a temporary home for the first 6 weeks.

The lady who owns the house even washes our clothes, dries it and returns it nicely folded. It’s a great gesture but having access to our own washing machine would be preferrable.

There’s oranges, lemons and tangerines in the garden and we are free to eat as many as we want. There’s a juicer available in the kitchen, nothing beats a fresh glass of orange juice in the morning.

Tangerine tree in the garden

Car rental

We prebooked a rental car in Lisbon Airport for 25 days, which is the max period allowed by many car rental companies.

When we went to pick up our Renault Megane stationcar, the guy behind the counter said “Sorry, we don’t have any stationcars available as you booked. We can offer you an Audi A3.”

I pointed to my family and the huge pile of luggage and politely explained “There’s no way we can fit all that into an Audi A3”. Once again here replied “Sorry, I don’t have any”.

After 10 minutes of explaining and insisting on a solution he went to speak with his manager. “Good news” he said when he returned. “I can upgrade you to a Mercedes 220d stationcar”. There you go!

It’s quite cheap to rent a car here, especially off-season. Typically 4-10€  per day for a VW Polo or similar. Buying a car, however, is more expensive in Portugal than in most other European countries. Once we’ve setteled we’ll be looking to buy a cheap car so we don’t need to drive to Lisbon every 25 days to exhange rental cars.

This is our current rental car. Not the best vehicle to fit 5 people but we manage. A bigger car would cost 2-3 times as much and we’d rather save where we can.

Getting my NIF number (tax number)

Shortly after arriving here, I went to the “Serviço de Finanças” in Caldas da Rainha to get my NIF number. All I needed to bring was proof of address and my passport.

Of course, I forgot my passport the first time, so I had to get it and come back. I’m so used to using my drivers license as ID because it’s accepted as legal ID in Denmark.

The lady in the office didn’t speak a word of English so I’m happy I brought a friend + my phone with the Microsoft Translator app.

15 minutes later I had a piece of paper with my newly acquired NIF number.

Opening a bank account

It’s nice/necessary to have a Portuguese bank account if you live in Portugal. Public institutions and some toll roads only accepts Portuguese cards. Even a McDonald’s rejected our international Visa/Mastercards.

To open a Portuguese bank account, I had to provide my NIF number, proof of address, a salary slip, my passport and a 250€ deposit.

I was recommended the bank “Millennium bcp” because they offer English interface for their internet banking services and mobile app. It’s not the cheapest option but it should be more hassle free for foreigners.

Note: While the interface is in English the push messages and emails from the bank are in Portuguese. 

2 hours and 16 signatures later (!!) my bank account was opened with access to internet banking and a MasterCard (debit).

Where to search for rental properties?

I’ve never seen as many real estate offices as here in Portugal. There’s ~30 realtor offices just in the city of Caldas da Rainha (which has approx. 60.000 citizens?)

There’s a few good online real estate sites like Idealista and Imovirtual but prices for rentals on those sites are higher than if you rent from a private person.

The extra cost might be worth it though. If anything comes up with the rental, the real estate agency will assist us. If we hire from a private person we’ll be on our own.

What to rent – House, apartment or condo?

We need a 1 year rental contract to apply for residency and NHR.

Unfortunately, there’s not many houses for rent on the market. The owners will rather sell it than rent it out.

We’ve seen a few examples of houses which rents for 350-450€ per month. Of course, they’re old and no way near the standard we’re used to. Most of the older houses offer no heating at all (unless you plug in transportable electric heaters). Needless to say, it’s very expensive to use electric heating in a house without insulation. But we would be interested if it’s close to a good school, in good shape and offers a nice garden for the kids to play in.

If we want to spend 1200-1500€ per month (which we don’t) there’s a few options mainly in Golf Resorts. But who wants to live in a Golf Resort all year around? It’s not the best way to integrate.

We’re also not interested in an apartment in a big city. We prefer the country side where we can enjoy the nature and the kids can run freely around outside.

A condominium could be a good solution for us, at least for the first year or two. Condos typically offer access to a lawn and often a shared swimming pool, which the kids would love.

We’re still searching for a long-term home so if you know someone near Caldas da Rainha who’d be willing to rent to us, please let me know.

What about the kids and school?

We are homeschooling our daughters at the moment. They will start in public school after the summer holidays.

The school they’ll attend depends on our address. Once we’ve found a long-term home, we’ll see if the kids can join after-school activities. This way they will be able to meet some new friends and start learning the language.

Anyone who has a sister or a brother knows how easy it is to start arguing with each other. Especially if you have no one else to play with for a month! In Denmark, they were used to playing with friends all the time and now they only have each other.

Finding other kids is among our highest priorities.

If you’re near Caldas da Rainha and you have kids, shoot us a message.
We’d love to meet up!

Fortunately, there’s also some good moments like this where they enjoy each others company

Learning Portuguese

Now we’re in Portugal I spend about 10-30 minutes each day trying to learn Portuguese with the Memrise app. Duolingo only offers Brasilian Portuguese so Memrise is a good language learning app that I enjoy using for European Portuguese.

I particularly like the video clips with Portuguese people, which makes the learning experience more joyous.

Portuguese is very different from Danish, Swedish, Norwegian, German or English, which are the languages I speak or understand. I guess the hardest part of learning Portuguese for me will be the pronounciation. Portuguese has a lot of “sch/tsj” sounds.

We’ll try our best to learn it!

Stay tuned

That’s it for the first part. I expect part 2 to be released in the middle of next month, hopefully with an update on the long-term rental situation.

47 Replies to “Moving to Portugal for Financial Freedom – Part 1”

  1. everything looks really good, but what about the COVID 19? it has to be hard, just landed in Portugal and deal with self isolation…

    1. We like to be on the countryside, so isolation is not bothering us too much. We can still buy groceries and arrange property viewings. We just avoid shaking hands with the realtors.

      I miss the friday night out with the expats and the kids are not allowed to play in public playgrounds. But we’ll get by.. I hope it’s not going to last all summer.

  2. Hi Jorgen!
    Thank you for this thorough read. This is such a brave choice, moving to another country to cut living expenses. Also, if you like warmth, most of the year is like a holiday! 🙂
    I live in Estonia, which, according to this graph you posted is pretty close to Portugal.
    Waiting forward to part 2.

    1. Hi Brita!
      Cutting down living expenses is a big thing. Like you mention, the warm Portuguese weather and all the other things the country has to offer… For us it was an easy decision. The hardest part is to see our family less than we’re used to. But we plan on going back 2-3 times per year and hopefully they’ll come to us once in a while.

      Yes, living expenses in Estonia is very similar to Portugal.

    2. I’m from Estonia and lived in Portugal quite recently (just moved back last November). Life cost is pretty much exactly the same as we have in Estonia! We rented a whole house near Tomar for 475€/month, utilities included. Food costs pretty much exactly the same as in Estonia. For us, costs were the same as living in Estonia, no difference in our monthly budget. But weather is divine. 🙂

  3. Dear Jorgen,
    I congratulate you for your decision.
    “Who dare wins”
    This is the motto of the special forces in my country Cyprus.
    Montenegro would have been another good choice but you have already made your choice and I wish to you and your family the best of luck.
    Demetris

    1. Dear Demitris,
      That’s a good motto! If we want to experience new a better things we need to try a different approach. If we keep doing the same, we’ll keep getting the same results.
      I’ll be sure to put Montenegro on my list of countries to visit. When I was a kid, we spent the most of our summer holidays in the former Jugoslavia (Croatia) and I loved it!

  4. Hi Jørgen,

    Great and brave move. Timing was not perfect because of this unexpected virus situation but it is out of our reach, but it is also an opportunity. Do you also have some steady monthly income that come from your direct work, or you are just focused on getting money from investing?
    Portugal is great country, been there twice and as a tourist it looks like a great place to live your life.

    1. Hi Alex,
      Perfect timing.. is it a thing? I think quitting your job to persue FIRE is comparable to having children… There’s rarely a good time for it – and if you wait too long you’ll wish you would have done it sooner.
      The virus situation is bad for my current investments, it puts them even more at risk. But at the same time, it’s also an opportunity to diversify into the stock market, which is currently trading at a discount.

      I have some online income besides my investments but it varies a lot.

      We like Portugal already, I don’t think it will disappoint! Portuguese people are as warm and welcoming as the climate.

  5. Hi Jørgen! I have been following your blog since April 2019.
    I found it accidentally while searching for some information on P2P investment platforms. I must say seeing your results really motivated me to keep finding ways to save and invest to, hopefully, one day be able to “retire” early (I am 27 years old now).
    I think I even got more interested in your posts when I saw that you were planning to move to Portugal (where I’m from) and now that you’re finally there I couldn’t be more happy to see that you’re living not very far from the place I grew (as far as I understood you’re in Caldas da Rainha).

    If you still didn’t settled for a city in Portugal I would suggest that you take a look at Torres Vedras (it is not very far from Caldas da Rainha) and the school where I studied for example it’s very close to the beach, the kids can study there from 5th to 12th grade, it’s semi-private which means is a non-fee paying school but with high-quality education. Me and my sister studied there, my cousins as well, and I can only say good things about the 8 years I spent there as a student and how it contributed to our development as human beings and as professionals.

    I lived in the countryside (check a place called Praia de Santa Cruz), basically you’ll find it’s a very friendly, quiet place, about an hour from Lisbon, with this great school (Externato de Penafirme) and the best in my opinion is the fact that is just near the beach so summer is always amazing for the kids, they can go to summer activities like surfing, bodyboarding, or just simply play in one of the best beaches in Portugal (https://sealandsantacruz.com/wp-content/uploads/2019/06/Untitled-15-1.jpg).

    Another good thing is the fact that it’s not very far from Lisbon (by car) and even if you work or study in Lisbon (like we did during college years) you can still take the bus and be there in about 1.5 hours (most of the population, about 80% living in Torres Vedras actually work/study in Lisbon city center).

    Really hope this is helpful, and I wished I could describe better how I believe that is such a nice place to live. But to give you an example my aunt married a german man more than 10 years ago and every year he still chooses to travel to Santa Cruz instead of any other place in the world and they even bought a villa there where they can live as soon as they retire.

    I’ll leave you with some links that I hope will be useful (sorry that most of them are only written in Portuguese).
    https://sealandsantacruz.com/
    https://geral.penafirme.edu.pt/
    https://www.cm-tvedras.pt/
    https://beachcam.meo.pt/livecams/santa-cruz/
    https://torresvedrasweb.pt/santa-cruz-santa-vida/

    1. Wow, thank you for all the useful information Catia! We’ll definitely take a closer look at Torres Vedras, it sounds like a great place to live. Good schools and education for our kids is on the top of our lists. Thanks again!

  6. Thanks for sharing your story with us. Best of luck to you and your family. Is Brasilian Portuguese that much different?

    1. My pleasure Michael. Brasilian Portuguese is mainly different in pronounciation (as far as I know). There’s some slight differences in words and phrases as well.

    2. People usually speak a lot slower in Brazil and they don’t really use the polite form for “you” (tu). They prefer the more relaxed “voce”. They also use a lot of slang and it change depending where they are from in the country. In Portugal they use the grammar in the traditional and basically correct way. In Brazil they love to play with the language. If you learn the Portuguese version, it will be easy to understand the Brazilian version. Except for the slang, of course.

      1. Georg ,
        only a little correction. You /Tu , is the most relaxed form to talk to someone. Você is more formal and we use it to talk to someone we dont know very well or in professional situations.

  7. Held og lykke med sproget! From a perspective of a Pole that learned Danish I can only say that there’s nothing more difficult than danish pronunciation 🙂 All sounds feel the same and blend into one long word 😛

    1. I heard Danish is one of the toughest languages to learn. I learned it quickly though, so Portuguese should be easy for me 😉

  8. Glad to see that you and the whole family is in place in the new house. It looks beautiful! Hope you get a pool soon.
    About your portuguese, then remember the app Hellotalk. It helped me a lot to start leaning. It is free and you can connect with people at your specific location. This is a great way of starting to build a network with to local people while learning the language. I have met with several people from the app here in Brazil and it is a great resource for getting to know about your local area. People are usually very interested, and are eager to help you getting to know the local area and how everything works.

    1. Thanks for the reminder Georg, I had forgotten the Hellotalk app. I’ll have a look at it. Sounds like a great way to integrate and interact with locals!

  9. Bem-vindo a Portugal!

    Very cool that you’re doing this series of posts. As it has been said, Torres Verdras / Santa Cruz / Sobral de Monte Agraço are totally worth checking. Mafra / Ericeira too.

    Boa sorte!

  10. Hi Jorgen,

    Welcome to Portugal, to cut expenses with bank, close the millennium account and open on ActivoBank.
    The ActivoBank owner are Millennium bank, and you don’t pay any commission. The app is in English too.

    Good luck to you and yours family here.

    Cheers

  11. Hi Jørgen, take a look south of the river below Lisbon. The benefit of living in this area includes living by beach/countryside, good schools, cheap standard of living (compared to Lisbon) and easy access to the city.

    Check out Costa, Aroeira or places around Seixal or Setúbal.

    Good luck!

  12. Milleniumbcp has high service taxes. You should opt for their online bank called ActivoBank. No fees and you will also get it on English I believe.

  13. Hej Jørgen, spændende at følge jer. Jeg ville lige gøre opmærksom på, at jeg i Frankrig har haft stor glæde af meeting.com -jeg ved ikke om det fungerer i Portugal. Her kan man finde ligesindede til alt muligt, så måske der er noget, I kan bruge. FB grupper med expats kan også være til stor hjælp. Men I har vel allerede nogle kontakter. Jeg har stor glæde af en FB gruppe i Frankrig med expats. Her kan man få alt at vide om at flytte til et nyt land. Glæder mig til at høre mere.
    Med venlig hilsen
    Berit

    1. Good suggestions Berit. We’re already members of several local Facebook groups. It’s a very good source for anything, people are really helpful.

  14. Check out Algarve region, perfect weather year round. August can be a pain (high season) but other than that really good option for those who like a combination between countryside and beach. Very safe and great for outdoor sports.

    1. Good suggestion JM. If it wasn’t for the high housing prices we would consider Algarve. It’s just so expensive now!

  15. Bem vindo, a Portugal, mudei me do Norte ( Porto para Setúbal) a minha mudança foi de 380 km de distancia (mais curta) mas envolveu andar com a “casa às costas”.

    1. Obrigado Gustavo. Setúbal has been recommended by several readers as well. Looks like a great place close to Lisbon! It’s on my watchlist 🙂

  16. Welcome to Portugal 🙂 My family are all from Caldas, but I live in Lisbon. If you ever need anytinhg just send me an e-mail.

    1. Thank you Patricia! If anyone in your family knows about a nice house with a garden, which is available to rent for 12 months or more, let me know!

  17. My recomendation is to get a bank account at Activobank, which is a net bank that belongs to Millenium. I have an account there for about 7 years and I’ve paid zero euros in commissions, debit and credit cards and everything.
    The only problem is that they have stores in only few cities and are open mondays to saturdays up to 20h00 (without covid19).
    I needed them only once, when I’ve opened my account 7 years ago.
    The website is the best I know in portuguese banks and transferences are free and fast to all SEPA countries.

    Cars.
    I’d recommend you to bring your cars from Denmark and legalise them with a portuguese license plate. I’ll be cheaper than buying a new car. If you buy used, well, better bring your cars…

    Language.
    Don’t use brasilian portuguese as reference unless you live among brasillians only. There’s a lot of caveats that wont help you to integrate in Portugal rather the opposite. You’ll know what I mean further in time.

    Education for kids.
    If you stay away from big cities public schools are usually a good option. If you end up living around Lisbon or Porto it’s better to find a private school.

    Too bad that you’ve arrived the worst time possible with that ansty covid19 around. Just be careful to avoid contaged using mask and gloves. With such a nice property it’ll be easy to get into isolation until this passes through. Avoid getting into hospitals as much as possible because things might get as bad like in Italy or Spain.
    With the warm coming back already this will end sooner than later like in northerner countries.

    Anyways, welcome to Portugal and don’t give up too soon. If you’re really finantially in dependent this is the best place to be.

    1. Thanks for the recommendations António.

      I’ll be sure to check out Activobank, sounds like a good and cheap alternative.

      We already sold our cars in Denmark, it wasn’t worth the hassle to do all the paperwork to bring them here. I know it’s hard to believe but cars are even more expensive in Denmark!

      Not sure if I’m financially independent anymore. The latest evolvement in scam platforms makes it hard to know if there’ll be further losses. We’ll do our best to make it work and save where we can. We really like it here.

  18. Hei

    Welcome to Portugal. I hope you enjoy Caldas da Rainha, it’s a very good place. Also, it’s close to some cool places like Foz do Arelho, Peniche, and so on.
    I hope we meet one day. Cheers from a Santarem City Fellow.
    Oh, and any questions about Portugal, feel free to ask.

    1. Thank you Joao, we like this area!

      Still looking for a long-term place to live, we’re just staying 1-2 months each place at the moment. Searching for houses/apartments and switching rental car every 25 days is a bit stressful.
      I’m looking forward to the day we have a 12 month contract and know which school the kids will attend.

  19. Hi Jorgen. Good luck with the move to Portugal. I lived in Aveiro for about a year and that was a really amazing year for me. Country and weather is simply beautiful. Try out surfing – i found it to be one of the best and most fun physical activities you can do. Also you can not do that almost any other Country in Europe.

    Now to a more specific question. What tool or software do you use to track your portfolio performance across all then platforms? I was searching for some that were either free or cheap but could not find anything that integrated well with the P2P platforms. I always find it difficult to import data into them from a P2P platform every month. Do you also have this pain point? Any suggestions?
    I started developing a portfolio performance manager/tracker for my personal use but would love to get some feedback if others also have similar issues. And share the tracker with others as well.

    1. Hi Vedran. I never tried surfing but it looks fun! I simply use Excel for tracking my investments. Good old manual work 🙂

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