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Friday, 3 November 2017

The Year of Investing - October 2017

What a month! It was crazy expensive, I saved a tonne of money and I went out, with people! I'm not a huge social butterfly but I'm always up for a good costume party. There was a hint for summer for a day or two, and then winter laughed and laughed and took over again. At least the finances went well.

To reach Financial Independence, Retire Early, and not have to go to work on a Monday ever again I need lots of money. More importantly I need money that produces more money. Right now I spend between $25,000 and $30,000 a year. This doesn't include the maintenance costs on my investment property, because that is covered by the rent. So if I wanted to walk out of work and never come back again, I need to find a way to make $25,000 a year, without a regular paycheck.

I'd rather go for the higher end of the scale though, so to fund my $30,000 lifestyle in retirement, I'm going to need to find $750,000 in the next eight and a half years, in accordance with the four percent rule.

The investment plan

For the next twelve months (July 2017 - June 2018) I am going to focus on supercharging my investments. The earlier in my retirement journey I start investing the more heavy lifting will be done by compound interest. By spending my money on buying more money in the early years, I hope to see my investments growing on their own through the next few years.

In the Year of Investing I plan on building up my existing accounts until I have just over 10% of my retirement fund. Starting from $52,000 I'm aiming for $80,000 by July 1 2018, an increase of $28,000 - just shy of $2,400 a month.


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Opening Balance: $1,853.00
Deposited: $310.81
Dividends: $16.53
Market Gains: $56.44
Current Balance: $2,236.78

Since starting The Year of Investing

Opening Balance: $813.53
Deposited: $1,345.32
Dividends: $23.97
Market Gains: $53.96
Current Balance: $2,236.78

Look, profit! A massive profit in October. It's close to a 4% return in this month alone. If only if only I believed that my account could climb steadily like this, that'd be close to 50% in a year. Unsurprisingly, I don't expect that to keep happening :)

Goal: $5,000
Amount remaining: $2,763.22 ($345.40 per month)
Current investment plan: $75 per week


Want to try out Vanguard? Check out my review first.


Opening Balance: $45,381.34
Deposited: $1,650
Dividends: $428.44
Market Gains: $1,031.98
Current Balance: $48,491.76

Since starting The Year of Investing

Opening Balance: $39,566.66
Deposited: $7,250
Dividends: $428.44
Market Gains: $1,246.66
Current Balance: $48,491.76

Holy what! Look at that gain! Dividends and market gains put my up 3% this month alone. Jaw dropper! But, and I need to say but, as exciting as this is will it last? Over the last couple of years I've seen a massive run up leading to Christmas, followed by nothing from January to April (ish). I'm curious to watch this going forward. The upside is that with the markets doing so much heavy lifting, I'm not depositing much, so I'm building up a cash cushion in case things go backwards at the start of next year.

Goal: $60,000
Amount remaining: $11,508.24 ($1,438.53 per month)
Stretch Goal: $65,000
Stretch amount remaining: $16,508.24 ($2,063.53 per month)
Current investment plan: $1,300 per month, plus whatever extra I can find


Want to try out RateSetter? Check out my review first.


Opening Balance: $12,336.23
Deposited: $200.00
Loan Returns: $89.33
Current Balance: $12.625.56

Since starting The Year of Investing

Opening Balance: $11,416.13
Deposited: $850
Loan Returns: $359.43
Current Balance: $12,625.56

So October projections were $107 loan returns, but $20 of payments are waiting to be cleared so we missed the triple figures again. November projections are $105 - let's see what happens this time around. 

Goal: $15,000
Amount remaining: $2,374.44 ($296.80 per month)
Current investment plan: $200 per month

The big picture - my savings rate

In total I'm hoping to invest $23,000 during the Year of Investing. On top of that I plan to keep up with my mortgage repayments, which should see my debts drop by approximately $12,500. This means saving $35,500, just shy of 50% of my income. 

So on top of paying down my mortgage and investing, I plan to squirrel away a little bit more so I can declare that I saved 50% of my income. In the previous 12 months I saved 41% of my income, so this year I though 'What the heck, let's push for 50%'.

According to the networthify early retirement calculator, if I pull this off I'll be able to retire in 9 years - just a few short months after my goal. A lot can happen in nine years, and I intend to prove that calculator wrong ;)

Here's how my savings look for October:

When you have a look at my expenses you'll wonder how I managed this savings rate. The interesting answer is I finally managed to get a refund from the useless financial advisers I paid back in February. I was great to finally see that money back in my account since I've been fighting with the company since May, and I ended up calling consumer affairs and the investment ombudsman just to get them to uphold their own damn refund policy. When in doubt, always call the ombudsman - companies will rapidly try and appease you in a desperate attempt to prevent the ombudsman from looking too closely at them.


For the sake of curiosity, here's what I spent in October. It was a lot.

CategorySpentBudgetedAnnual Average
Home$1229.04$1,312.50$1377.88 (up $14.04)
Just one bill this month for the Emergency Services Levy. I'm happy to pay this, I like knowing we have services for when things go south.
Investment Property$2532.16$1,166.67$1,401.76 (down $45.29)
I swear I just paid every bill under the sun. Once I penciled these in my monthly expenditure was over budget, before the month had ever started. *sigh* What fun! However, this time last year I was paying off renovations, so this year is still cheaper than last.
Personal Bills$146.91$147.08$139.22 (up $5.24)
The usual
Groceries$157.62$200.00$204.92 (up $15.29)
This was a super cheap month and I'm pretty stoked. But this time last year I was travelling for 3 weeks and spent next to nothing on groceries (it all fell in the travel budget). As such my average has spiked - gives me something to work towards though. 
Pets$69.38$29.00$28.45 (up $0.78)
I bought everything for my beloved cat this month. Kitty litter, treats and her regular food added up to a pricey month.
Roller Derby$353.88$128.92$174.23 (up $7.18)
Umm... yeah... sooo... I paid for the accommodations for my trip that I leave on today (I wrote this post in advance ;) ) plus I bought some tools and new wheels for my very neglected skates. We had a costume party where I spent lots on crafting supplies and drinks. I think I need to admit the hobby is pricier than I want to believe. 
Travelling$0$100$30.00 (down $80.35)
I haven't travelled since October last year and the costs are starting to fall off the 12 months average. Time to book another holiday!
Other$160.44$245$236.02 (down $18.66)
It would have been a reasonably cheap month, but I bought a case of wine! $110 for a mix pack of reds, nom nom nom. 
Total$4,649.43$3,329.17$3,634.53 (down $126.40)
This month was an interesting exercise in psychology. Once I penciled in my bills I was already over budget for the month, so I kind of just.. let go. Normally I look at how much I have left to stay under budget, and while I sort of tried to keep each category under, I also sort of... tried to spend a lot because her, I was over budget anyway! I'm sure there is a lesson in this.

Blast from the Past!

The Year of Investing started July 2017. You can see past reports here:

1 comment:

  1. Wow that's what I call diversification! So many investment vehicles and with your 50% saving rate you're definitely on track to seeing some nice returns for your year of investing. Keep up the great work!


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