February brought with it a lot of change. I sit here today writing this and it feels like my life had been flipped inverted and I’m only just starting to pull out and recover from it. This is actually the first time I have logged onto the blog in about a month so first of all I would like to apologise for my lack of presence online over the past month. I haven’t been myself lately.
Everyone who is following me on the socials would probably know that I went through a pretty horrible breakup. I am usually a fairly private person and it does seem odd to air my personal affairs on such a blog, especially ones romantic life, and I have debated with myself whether I should even write about it or not. Part of why I have is a result of Mr Money Mustache sharing his experience of Divorce. I was blown away by the support from every single one of you in the FI community over the past few weeks. I really appreciate your messages of support, right when it felt like I had been sucker punched in the gut.
Although I could not see it, my ex and I were on separate pathways, and we had very different values and morals. We came from very different backgrounds (myself from a poor family, her from a very wealthy family) and ultimately we were at very different levels of maturity and stages of life. Unfortunately these differences were too much. She left me, and afterwards confessed that she had had an affair with her sports coach.
To be honest I was shocked and after a lot of tears and sleepless nights I have come to terms with the fact that she wasn’t the person I thought she was. Some of the support I got from my close friends, family and the FI community felt like a slap in the face at the time, but I needed to hear it -They say love is blind, and I surely was blinded. Its difficult to walk away from such a long relationship, especially when you love deep and think you know the person so well, and you are so invested in the relationship and your future together.
I grounded myself (the last thing I wanted to think about was flying hundreds of people around and dealing with all the headaches that come with international flights and being out socialising with the crew) and spent almost two weeks bailed up in my apartment. I am very thankful for some close friends who came over to force feed me pizza and red wine (even If I only managed one bite of a slice and then two whole bottles of red to myself).
I forced myself to go to some of the events we had planned for the month, including a wedding 😐 and then finally agreed to an international bid for work and got back on the horse. I picked up a copy of Lisa Messengers ‘Break-ups & breakthroughs’ at Sydney airport which clearly is a book for girls but whatever I read it anyway! I actually cover to covered it during my dead head (positioning) flight and then re read it a few times in the hotels.
One of the things I learnt was perhaps that I was so caught up focusing on the destination, I wasn’t fully enjoying the Journey. I was busy planning for FI/RE and work optional, gathering assets and ‘nest building’ for a future family that I failed to live fully in the here and now, if that makes sense? I kept myself super busy with full time work and several part time jobs and side hustles, as well as running this blog, part time university study and learning music and another language.
I followed the advice and have focused on a bit of ‘self love’, started to be a little more careful with how I spend my time (factoring in some more ‘me time’ and not just always working and hustling) and dialled down the savings rate a bit in order to spend a little more on enjoying the here and now. Ultimately, I realised that other peoples actions do not reflect your own self worth.
So with that elephant in the room out of the way, lets crack on with the numbers for February!
52%. Lets not talk about it 😅 I’m just glad it was still above 50%. It’s not like I was trying to spend all of my income, and there was also some rather large non-self-indulgent-luxury spending also on work equipment, uniforms and gifts.
Realistically I don’t think I could even spend all of my income if I wanted to, I don’t know what the hell I would buy? Most of the ‘products’ available to buy just seem gimmicky, wasteful or useless to me and I already have everything I need. I did spend quite a lot on food this month though…
Regular monthly flying income plus a small amount of allowances with some dividends as the cherry on top. A business venture was put on hold and some of the capital was redirected out of the company and into the property development.
February was a blood bath on the old spending front. I don’t even want to talk about it 🙄 Lets just say I was focusing on a little ‘self love’; I indulged in a little luxury at some resorts, some fine dining, updated my wardrobe and attended a wedding. I also got some new RM Williams boots for my flying uniform ($600) but they should last ten years!
Get FIRE Portfolio
I got some interesting feedback about how the portfolio was probably more complicated than it needed to be because of my ‘double ups’ and tinkering with actively buying LICs at a discount.
No one likes being told they are wrong, and I don’t think there are any ‘right’ or ‘wrong’ answers when it comes to investing because it is so personal. However, I take the feedback and I am thankful for it.
When I thought about it, I am pretty confident that the ETF strategy is the way I want to go. I won’t be buying any more ‘complimentary’ ETFs and will just be sticking to my original guns and the best value ETFs – this means just sticking to buying A200, VTS and VEU.
Although I am not in a rush to sell VAS and IVV (especially with a market correction) I will not be buying any more, and when the time is right I might decide to sell them in order to simplify my portfolio – financial minimalism if you want to call it that, as well as put more into the VEU fund and ‘balance’ up that sector as its barely even registering on the pie chart.
I still do like the option to buy a LIC when it is trading at a discount (and I also accept the criticism that I shouldn’t have likened the LICs to index funds as they are by definition actively managed funds). I will continue to buy the LICs when they trade at a nice discount, although I would like to make it clear that my main strategy involves the use of ETFs. I probably shouldn’t be bothering ‘tinkering’ by buying LICs but I kind of get a little ego boost when I buy something below Net Asset Value.
Diversifying overseas I purchased $10,000 worth of VTS which is the Vanguard Total US market. The market dropped afterwards, but whatever its about time in the market not timing the market. I will continue to make regular investments as the market continues to drop and all I can see is better divided yields as the share prices go down.
Personally I feel that the true value of a portfolio is the income it generates anyway and not its capital value (sorry if your a boomer that likes to brag about your home value at BBQs). The whole premise of this regular blog article being the ‘Net Worth update’ may seem counter intuitive then, and perhaps I should just call it an ‘update’. Regardless, NW is still a good metric to help monitor your progress to FI (alongside your savings rate and passive income!) you just shouldn’t give it more importance than it deserves.
Nothing exciting here, duplex project just keeps on ticking along. Continued to stash away cash for the mortgage offset account, hoping for project completion and rental income in January 2021.
My retirement plans are currently a two stage system. Stage one consists of drawing down the Get FIRE portfolio as well as receiving rental income. Stage two consists of when I reach preservation age and can reach my superannuation annuity (with a fall back of social security).
Stage one: Get FIRE Portfolio
7% draw down over 30 years = $13,555 ($1,130/month), and;
Rental positive cash flow: $1,440 ($120/month).
Stage two: Superannuation + Social Security
Stage two begins when I hit preservation age
- One time cash payout of $83,554. Represents an investment opportunity to earn $3,342 ($278/month) at 4% sustainably forever.
- Annuity = $17,562 ($1,463/month), and;
- Social Security Aged pension = $18,122 ($1510/month) *NB this is means tested and eligibility will reduce as the super annuity income or any other forms of income rise.
Net Worth table
|Date||Net worth||Difference||Saving Rate||Notes|
|Jul 19||$578,900.00||84%||Finally began tracking this like a proper adult.|
|Aug 19||$560,100.00||-$18,800.00||78%||Share market slight correction, Ok savings.|
|Sep 19||$584,744.88||$24,644.88||72%||Share market rebound, savings rate not so good.||LINK|
|Oct 19||$600,386.00||$15,641.12||84%||Good saving this month. Normal salary, plus allowances, dividends from index funds, tax refund, eBay selling and was working abroad in asia where things are cheap.||LINK|
|Nov 19||$612,917.21||$12,531.21||76%||Falling short of my savings goal of 80%. Mostly domestic legs this month with higher costs. Also invested in hydroponics.||LINK|
|Dec 19||$625,350.00||$12,432.79||76%||Good savings of cash (for development) and investment, however higher spending due to Christmas period (Travel and Gifting).||LINK|
|Jan 20||$865,212.00||$239,862.00||55%||Super settlement was a HUGE boost to NW. $9K growth from stock market. Expensive month lots with lots of unexpected bills – weddings, travel, Booking flights, fines etc.||LINK|
|Feb 20||$851,802.0||-$16,592||52%||Large increase in spending on myself this month, still managed to tuck away 5K to put into shares and property. Corona Virus market scare resulted in a correction and gave NW a small negative trend. Time in the market not Timing the market!|
Get Financial Independence!