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Tuesday, 13 February 2018

The Year of Investing - January 2018

Where in the world is LadyFIRE this time? Largely lamenting the fact that I didn't get my payrise, and spending over an hour every night in a volunteer treasurer role. Who needs free time right?

Before diving into the report, let's talk about a January. It was a busy month. It started with me coming back to work being smug as heck that I would be moving on from what has become a joyless role. And then my new boss rang, I thought we were going to talk terms and salaries. Instead he told me that someone had decided to come back from maternity leave early, and they only had one open space on the team - my space. Supposedly the team is expecting to grow 2-3 people, but there was no space for me. Super depressing :(

But, on the flip side, I have been crazy busy in a volunteer treasurer role. Y'know what's stressful, budget projections and debt collection. I'm not a fan. But, I'm also pretty good at it, and I'm signed on for the ride for another eight months.

Okay, let's move along into the finance part of this report...

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

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

January

Opening Balance: $2,958.31
Deposited: $336.27
Dividends: $21.62
Market Gains: $98.95
Current Balance: $3,415.15

Since starting The Year of Investing

Opening Balance: $813.53
Deposited: $2,382.12
Dividends: $45.84
Market Gains: $173.66
Current Balance: $3,415.15

So umm, my dividends and market gains pretty much doubled in January. I didn't even realise it was such a good month until now. Woo!

Goal: $5,000
Amount remaining: $1,584.85 ($316.97 per month)
Current investment plan: $75 per week

Vanguard

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

January

Opening Balance: $52,039.40
Deposited: $2,150
Dividends: $632.79
Market Gains: -$1,293.27
Current Balance: $53,528.92

Since starting The Year of Investing

Opening Balance: $39,566.66
Deposited: $12,000
Dividends: $1,061.23
Market Gains: $901.03
Current Balance: $53,528.92

Remember how I had two months in a row of the markets doing all the heavy lifting for me? Apparently that stopped in January! Ouch. I know that normally the unit price drops a bit after dividends are paid, but I didn't expect to see this when I did the end of month maths. Oh well, the more money I pour in when the markets are down, the lower I can get my cost basis.

It's also interesting to see that my Acorns and my Vanguard have money invested in different areas. Acorns went up, Vanguard did not - although in the last few days they have both come down, which just means stocks are on sale!

Goal: $60,000
Amount remaining: $6,471.08 ($1,294.22 per month)
Stretch Goal: $65,000
Stretch amount remaining: $11,471.08 ($2,294.22 per month)
Current investment plan: $1,300 per month, plus whatever extra I can find


RateSetter

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

January

Opening Balance: $13,305.56
Deposited: $200.00
Loan Returns: $112.01
Current Balance: $13,617.57

Since starting The Year of Investing

Opening Balance: $11,416.13
Deposited: $1,550
Loan Returns: $651.44
Current Balance: $13,617.57

You guys I finally cracked it! Finally hit the $100 return per month! Break out the fireworks!
I was also talking to a guy at work about RateSetter and casually mentioned I have $13k and almost $100 a month income and his eyes popped out his head. I forgot what 'normal' people are like outside the FIRE community.

Goal: $15,000
Amount remaining: $1,382.43 ($276.49 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 January:



Do you ever feel like you just forget to record some spending? That's me this month :) My finances are getting even more confusing here because I've started making payments for Roller Derby on my credit card, and needing to get them reimbursed. So I have cash back before I actually have spent the money in a way. It's all very busy in my accounts.

Expenses

For the sake of curiosity, here's what I spent in January.

CategorySpentBudgeted12 Month Average
Home$1,018.48$1,312.50$1,335.72 (down $4.72)
Nothing exciting, just the basic mortgage repayment
Investment Property$1,119.83$1,166.67$1,204.20(down $28.38)
Mortgage plus council rates. Nothing overly exciting here either.
Personal Bills$146.91$147.08$145.86 (up $0.49)
The usual
Groceries$196.55$200.00$185.03(down $6.67)
I bought a bunch of gift cards for the supermarket that were 5% off. I'm not sure I'll do it again, sure it was a 5% saving, but it was a fair bit of effort. 
Pets$11.00$29.00$31.21(down $1.53)
Cat food, super thrilling.
Roller Derby$212.18$150.00$201.11 (up $9.04)
So it's January, the season just started and I've already booked interstate flights. I love sports :D
Travelling$0$100.00$0.00 (no change)
It's definitely time for a holiday. Expect my partner is in New Zealand on a trip, so I have to (wo)man the house.
Other$363$157.25$186.03(down $40.10)
I managed to completely fritz my harddrive by trying to copy a stupidly big folder. Really not sure how that happened, but I went out and bought a new one at double the size. I was running out of space anyway. The rest of the spend is on crafting a costume from scratch, and booze. Lots of booze for the hot weather.  
Total$3,067.95$3,329.17$3,325.96(down $71.87)
This is basically what an average month looks like to me now. It feels like in low bill months, I have extra costs for sports and fun, and in the big bill months I ease off on those spends. It feels good to have this as my auto-pilot spend.

Blast from the Past!

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

4 comments:

  1. Quick question, is P2P lending return taxed already?

    ReplyDelete
    Replies
    1. Not taxed - They do have my TFN on file, but there is nothing withheld. Possibly if there were larger earnings they might, but I haven't explored that.

      Delete
  2. I’m not sure what the UK equivalent of £40,000 a year because a gross income of that amount even in London is pretty good. I’ve hired an intern recently and was forced to set her salary at the minimum wage of £15,600 and she quit her part time job presumably because it isn’t impossible to live on.

    My FIRE plan is currently based on getting my spending down to £18,000 a year - probably via geographical arbitrage. I’m certainly going to stop contributing to my pension once it’s capable of generating £22, 000 post 65. Excluding savings, debt payment and supporting my family, I spent under £20,000 last year. My lifestyle included sports subs for football and badminton, at least 8 non-work trips and lots of cinema, dining out and takeaways. I’m not really sure I could have a better quality of life / overall happiness on much more.

    ReplyDelete
    Replies
    1. I know my FIRE plan is pretty generous, but I kinda want a farm, and dogs and cows. I figure the extra moolah will come in hand for my rookie farm mistakes, and buying a whopping chunk of land

      (I don't know the equivalencies either)

      Delete

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