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Friday, 4 May 2018

The Year of Investing - April 2018

Well that was a weird month. If March was a financial trainwreck, then April tried to one-up it was unpleasant life events. Thankfully by the end of the month it all settled down and I still kicked plenty of goals, but what a roller coaster!

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.

Except, not really, because I have a stretch goal, and now a double stretch! Overall I plan to have $90k invested, for an increase of $38,000, or just over $3,150 a month.


Acorns Raiz

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

April

Opening Balance: $3,934.70
Deposited: $325.75
Dividends: $26.59
Market Gains: $116.35
Current Balance: $4,403.39

Since starting The Year of Investing

Opening Balance: $813.53
Deposited: $3,349.12
Dividends: $72.79
Market Gains: $167.95
Current Balance: $4,403.39

It was a pleasant month, plenty of dividends earned and the markets played along. Plus Acorns Australia rebranded to Raiz. Same service, pretty new logo.

Goal: $5,000
Amount remaining: $610.80 ($305.40 per month)
Current investment plan: $65 per week - I'm projected to finish ahead of my goal by about $100, so I've dropped this investment by $10 a week. This will free up more money to put into other places, and to rebuild my emergency fund.

Vanguard

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

April

Opening Balance: $60,519.68
Deposited: $2,700
Dividends: $186.38
Market Gains: $1,029.43
Current Balance: $64,435.49

Since starting The Year of Investing

Opening Balance: $39,566.66
Deposited: $22,425
Dividends: $1,247.61
Market Gains: $1,196.22
Current Balance: $64,435.49

This was really interesting, at the start of the month it didn't look like I was going to make my checkpoint, so I threw a little extra in. However then the markets rallied and I finished $1,000 ahead of where I planned to be. Woohoo! That's the rewards you get for not panicking when the markets dip.
I do need to complain about my Bonds though - a measly $23.46 dividend on a $13k balance... over a year that's less than 1% dividend. In the past payments were much higher so if anyone understands whats happening behind the scenes, leave a comment and let me know.

Goal: $60,000
Amount remaining: Done!
Stretch Goal: $65,000
Stretch amount remaining: $546.51 ($282.26 per month)
Double Stretch Goal: $70,000
Double stretch amount remaining: $5,564.61 ($2,782.305 per month)
Current investment plan: $1,900 per month, plus whatever extra I can find


RateSetter

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

April

Opening Balance: $14,209.92
Deposited: $200.00
Loan Returns: $111.61
Current Balance: $14,521.53

Since starting The Year of Investing

Opening Balance: $11,416.13
Deposited: $2,150
Loan Returns$955.40
Current Balance: $14,521.53

Another wonderful month with more than $100 in returns, AND I'm oh so close to cracking $1,000 returns this year. Wonderful.

Goal: $15,000
Amount remaining: $478.47 ($239.24 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 (now $33,000 with my double stretch goal!). 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, (45,500) just shy of 50% of my income (just over 57%). 

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 ;)

According to the Mad Fientist Lab, after April I'm seven years and nine months away. In March I reported I was only 7 years and 6 months away, I've gone backwards for the second month in a row because...

Here's how my savings look for April:



Better than March, but still miserable. Part of this is because I pay everything on credit cards to get the rewards points, so all the money I spent back in March was pulled from my accounts in April. Credit Cards are wonderful because I just booked $700 worth of flights for a mere $100. Yepp, even with my woeful savings rate this month, I decided to jump at an opportunity to travel with my league. I skipped out on a trip to Japan once to save money and I've regretted it ever since.

I've been drawing from the Emergency Fund (Opportunity Fund?) to keep my investments on track. While I'm getting a little uncomfortable with this, I'm still comfortable that I have a couple of months wiggle room should I suddenly find myself unemployed. While I don't encourage investing yourself into a hole, I had a far larger emergency fund than necessary, so using it to fund opportunities suits my values.

Expenses

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


CategorySpentBudgeted12 Month Average
Home$952.07$1,312.50$1,291.88 (down $9.73)
Just the mortgage, huzzah
Investment Property$1,640.99$1,166.67$1,272.89 (up $7.84)
Still catching up on the unsent bills. We should return to normality now. I didn't pay any late fees, the water company just randomly decided not to issue a bill back in January
Personal Bills$151.60$151.60$147.30 (up $0.22)
New year, new health insurance premiums. Blergh.
Groceries$400.64$200.00$200.24 (up $19.31)
So ah... in short, Mr. FIRE wasn't away very much, but he was in and out of hospital with a massive stomach bug that could easily have been appendicitis if he hadn't already had it out. And the car needed massive repairs, so I did all the grocery shopping this month, instead of just half. Hence why the amount I spent has mysteriously doubled. It's definitely time for another Epic Food Week though.
Pets$8.73$29.00$26.29 (down $0.67)
Just a little cat food restock. I've decided to build a new cat tree and now that we have a car again I'll be shelling out a big chunk of money for supplies. Since the cat tree will double as a shelving unit, I'll split the expense between this category and another one.
Roller Derby$305.46$150.00$216.96 (down $3.89)
In March I went to Brisbane and said I wasn't travelling again till after August... well, I lied. I'm going to Darwin in June! I skipped a trip once because I didn't want to spend the money, and I learned my lesson. Do the things, have fun, use credit card rewards so the cost isn't too painful.
Travelling$0$100.00$0.00 (no change)
Still none... but I've just booked my second interstate roller derby trip for the year so I really have nothing to complain about. I am a fan of taking short, low-budget trips.
Other$181.21$157.25$205.24 (up $9.57)
A lot of this expense was catching Ubers to and from the hospital, because our car broke down and Mr. FIRE got really sick at the same time. We then bought ourselves some expensive pity food (pizza) that I put here instead of groceries because.. reasons.   AND THEN I paid stupid tax on my phone... I my battery was playing up so I've shelled out for an extra charger and some new cables. Turns out it was a firmware issue with the phone, not a hardware one so at least I didn't also have to replace the battery.
Total$3,640.70$3,267.02$3,362.47 (up $18.40)
So yeah, it wasn't a great month. Everything seemed to go wrong at the same time and led to extra costs that I would have preferred not to deal with. But that's life. I also bought an Apricot tree, so at least some of my crazy spending this month went towards something that should pay me back in the long run.

Blast from the Past!

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

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