But I can keep up these monthly reports, for your curiosity and my ongoing benefit. It gives me a little thrill each time I sit back and look at how well I'm tracking towards these goals.
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.
Acorns
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December
Opening Balance: $2,665.49Deposited: $305.22
Dividends: $0.13
Market Gains: $12.53
Current Balance: $2,958.31
Since starting The Year of Investing
Opening Balance: $813.53Deposited: $2,045.85
Dividends: $24.22
Market Gains: $99.71
Current Balance: $2,958.31
There's really nothing exciting to say here. Money in, tiny bit of dividends, little bit of market growth. On track for the years goal.
Goal: $5,000
Amount remaining: $2,041.69 ($340.28 per month)
Current investment plan: $75 per week
Vanguard
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December
Opening Balance: $50,677.81Deposited: $1,300
Dividends: $0.00
Market Gains: $61.59
Current Balance: $52,039.40
Since starting The Year of Investing
Opening Balance: $39,566.66Deposited: $9,850
Dividends: $428.44
Market Gains: $2,194.30
Current Balance: $52,039.40
This is the second month in a row that I haven't had to deposit any extra because the markets are running along so nicely. The final market return for December is much less than I thought, but I'm still tracking ahead of the goal thanks to some nice growth. January will have dividends too!
Goal: $60,000Amount remaining: $7,960.60 ($1,326.76 per month)
Stretch Goal: $65,000
Stretch amount remaining: $12,960.60 ($2,160.10 per month)
Current investment plan: $1,300 per month, plus whatever extra I can find
RateSetter
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December
Opening Balance: $13,016.74Deposited: $200.00
Loan Returns: $88.82
Current Balance: $13,305.56
Since starting The Year of Investing
Opening Balance: $11,416.13Deposited: $1,350
Loan Returns: $539.43
Current Balance: $13,305.56
Still chasing that elusive $100 in a month. I realised that I was failing to considering RateSetters cut when calculating my monthly returns, so that's why I've always been under. On one hand it's easy to get cranky when they're taking away your income, but remembering that RateSetter has returned over 8% every year since I started, I really can't complain.
Amount remaining: $1,694.44 ($282.40 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 December:
Ahh, here it is, the correction! Finally a month under 50% savings. It's actually all from Novembers spending, with a bunch of bills being paid on my credit card. I'm a huge fan of credit cards, as long as they are paid in full every month. Carrying a credit card balance is the worst kind of stupid. If you can't afford it, don't buy it.
Expenses
For the sake of curiosity, here's what I spent in December.
| Category | Spent | Budgeted | 12 Month Average |
|---|---|---|---|
| Home | $1,209.83 | $1,312.50 | $1,340.44 (down $5.45) |
| Just once little bill for the gas, but I also had my first pest inspection in three years. Oops, but we have a clear bill of health, so woohoo! | |||
| Investment Property | $678.06 | $1,166.67 | $1,232.58 (down $1.16) |
| Just the mortgage again. Phew. This can't last though. | |||
| Personal Bills | $146.91 | $147.08 | $145.37 (up $6.15) |
| The usual | |||
| Groceries | $146.91 | $200.00 | $191.70 (down $13.22) |
| Let's be honest, I'm cheating a little. I've been on leave for a week and not near shops. My partner has been, and he's been picking up the essentials. Men are the best. | |||
| Pets | $35.00 | $29.00 | $32.74 (up $4.30) |
| Not a particularly exciting month - I needed to stock up on chicken feed which is pricey, but lasts roughly three months. Once again, my partner picked up the tab for the cat food, phew. | |||
| Roller Derby | $0.00 | $150.00 | $192.07 (down $0.62) |
| It's the off season! Finally a free month. January will be expensive though, January's always are. | |||
| Travelling | $0 | $100.00 | $0.00 (down $21.58) |
| Nothing! Forgot to plan that Christmas road trip. It's now been over a year since I spent any money on (non-derby) travel. | |||
| Other | $429.59 | $157.25 | $226.13 (down $9.41) |
| Merry Christmas! Actually, the majority of this spend is caused by my coworkers getting promotions and having going away lunches. Between farewell gifts, lunches, and trips to the pub my budget exploded before Christmas even happened. We're a very low gift family so I got through the festivities with minimal injury. And we all got fat for the holidays, as you should :) | |||
| Total | $2,646.30 | $3,329.17 | $3,397.83 (down $48.56) |
| Another super cheap month! With more than 50% of my spending being the interest on my mortgages I think I am allowed to give myself a 'super frugal' award. It's pretty exciting to know I can live this comfortable lifestyle on so little money. It makes the FIREy future look bright indeed! | |||
Blast from the Past!
The Year of Investing started July 2017. You can see past reports here:
What I like is that what you're doing is very well documented and not too much of a long (boring) story like we can read sometimes with other bloggers. 50% savings rate is... awesome ! Congrats!
ReplyDeleteGood to see that all of your investing is going really well! Good luck with getting the payrise confirmed :)
ReplyDeleteMr DDU