It's been a long time since I last posted. Nearly a year in fact. I just wanted to let everyone know that I'm sorry for the long period of absence and that I'm doing fine - I'm still on my path to financial independence! The truth is I realised some time ago that to hit my FIRE target of retiring by age 50, it was going to take some concerted effort - more than just saving as much as I could each month. I also got so fed up of working in an office that I couldn't bear the thought of having to continue doing that for the next 8 years or so. So I started looking for ways to supplement my income. I think I previously mentioned that I'd been getting into online publishing - this is where the majority of my time is now spent. I'm focused on launching books so that I can build up an income stream which will ultimately cover my annual expenses - therefore allowing me to step away from my freelancing work. Alongside this, I am continuing to save into my Freedom Kitty and into my Personal Pension, with the same targets as I previously discussed. Here's the latest standings as of the start of June 2018:
Freedom Kitty
£58,691 of £190,000 saved (31%)
Personal Pension
£147,581 of £446,300 saved (33%) I've been updating the progress bars in the sidebar from time to time even though I haven't been writing posts and I will continue to do so.
So for both savings pots I'm at the 30% point, or a third of my way to goal. I now have just over 7 years left to squirrel away the remaining 70% (although I will be helped by the effects of compounding). If I assume a 6% annual investment return, to hit my targets I need to be saving the following every month (until the month before my 50th birthday): Freedom Kitty: £1,006 per month Personal Pension: £650 per month I would say that this is feeling do-able. The Freedom Kitty savings target is harder than the Personal Pension target. I'm currently paying £1,000 per month into my Personal Pension so there's no problem there. I don't have regular payments set-up into my Freedom Kitty yet this financial year as I have not yet decided which stocks and shares ISA provider I will be using. However my intention is to max my ISA out this year which will be the equivalent of £1,666 per month which easily covers my goal amount. The only risk to my plan is that I have just started a year's sabbatical from working in IT so that I can concentrate on building up my publishing business. This means that I am living off the savings I have accrued in my business account for the next year. If I don't manage to build my publishing business up to the point that it covers all my expenses (including Freedom Kitty and Personal Pension savings), I may need to reduce how much I'm paying in, or *gulp* head back for another IT contract. I will be re-assessing where things stand in a year's time to see whether I need to return to IT, or if my publishing business has reached a point where it can sustain me. If I achieve my publishing income goal this will be a game changer because it will mean that I'll no longer feel the need to "retire" by age 50 as I will already be doing something that I enjoy with the freedom to choose when I work and where from. If you have any questions or comments on the above do let me know. I'd also love to hear how you're getting on - do say hi in the comments...
It's been a while since I last posted one of my regular updates on how my goals or quest for Financial Independence is going. There are various reasons for the delay (yes I know excuses, excuses!):
- I was on a 4 month break from working a full-time contract when I started the blog, so had a lot more free-time available to write. Since the start of June I've been working a full week again
- I've been through the whole house sale and move process, which doesn't end on the day you pick-up the keys to your nice new house. We've been slowly working our way through a mountain of boxes trying to find places to best store everything
- I've been working on some income generating side hustles (kindle publishing and a little dabble with matched betting), which have been taking up a considerable amount of my free time because I'm new to them and learning as I go
All of the above have been impacting my precious free-time and thus the time available to write for this blog. I have missed posting about my progress I must confess, and I also feel guilty at times for letting my posting schedule slip. So I'm going to try to play catch-up on the posts about my finances and my goal progress...though it may be a somewhat slow process, please be patient!
So here's a catch-up post covering my progress toward achieving my second goal for 2016 which includes the pursuit of Financial Independence. This one is about my Portfolio Value and Net Worth for the months April to June 2016.
Portfolio Value - end Jun 2016
My portfolio includes the savings and investments in my Freedom Kitty as well as my Personal Pension, the combination of which make up my "FI Before 50 Roadmap".
FREEDOM KITTY
Here is the end of June value of my Freedom Kitty including the interim valuations for April & May:
After maxing out my contributions to the 2015-2016 ISA in March I could make no further contributions to it. I continued to put savings for my Freedom Kitty aside in my current account during April, May and June, but because I wanted to choose a new ISA provider for the next tax year I did not actually invest during those months (more to follow on this in July's update), so the savings have not been listed here.
As you can see, the end of June value of my ISA was £14,728, which is less than its value when I did my last post in March, and overall down by -£1,282.53 on my original investment. However the value had been much better in May, having increased by £421 on March, but then Brexit happened and everything went wobbly! I'm not too concerned because I can already see improvements during the month of July so things are getting back on track again.
Here's how the Freedom Kitty is tracking for the year - I've set myself a target of £23,000 for this calendar year (Jan-Dec 2016):
At 64.03% I've actually gone backward on the progress I'd made in March (which was at 66.54%), but I have half the year to go and I'm still over 50% of the way toward my Freedom Kitty goal for 2016. With my additional savings to be added in the latter half of the year, and hopefully a bit of a rally for my investments I am optimistic that I will still make my target.
Here's how the Freedom Kitty is tracking against the overall target of £209,590:
A slight drop from 7.3% to 7.03% since March, but I think I should still be able to achieve 10% by the end of the year with a little bit of luck.
PERSONAL PENSION
It's been an interesting few months for my Personal Pension. I decided to instruct my pension provider to cut the employer contributions being made by my Limited Company because of the period of time I was not working (4 months) and therefore not billing for any sales into the business account. Until this point the contributions had been set at £3,000 per month which is a lot to eat away from the company's cashflow, when said cashflow is not being replenished. I asked to drop the amount to £1,000 per month. Unfortunately, despite being advised that it's easy to change the regular contribution amounts when I first began the pension, there have been a few hiccups at the pension provider in making the change so my figures will reflect the sporadic nature of what has ensued! I've been promised that things are now sorted and should be consistent moving forward (not to mention apologised to with flowers and wine!)
So here is the end of June value of my Personal Pension:
Even though my pension contributions have effectively been reduced to £1,000 per month from May, at the moment I am still on target to hit my overall £2,000 per month goal. This is because I have contributed an excess £3,000 across the months of February, March and April. I will need to see how things go later in the year to decide whether I'm brave enough to attempt to change my regular contribution amounts back up to £2,000 (I need a few months of consistent withdrawals by my pension provider for my confidence to be restored!)
Here's how the Personal Pension is tracking for the year - I've set myself a target of £110,000 for this year:
Great progress here since March, I've now got just under 47% of the way to go to hit my pension target for this year.
Here's how the Personal Pension is tracking against the overall target of £364,965:
I've achieved 26.15% of my overall target for my Personal Pension goal, which means I'm now over a quarter of the way there, a really nice milestone for me...happy days!
Net Worth - end Jun 2016
I don't include assets such as car, valuables or house sundries in this calculation - it's really only the big or purely savings items I choose to include. The credit card debt listed is my monthly spend which I always pay off in full each month by direct debit. Following the house sale and purchase we've just been through, my net worth has seen a little dip because I used some of the equity from my house sale to fund my share of the stamp duty for our house purchase. Since March my net worth is down by £5,492.05, but I'm sure it will be on the up again soon as I continue to invest and of course over time we'll be paying our mortgage off which will help.
So at the half-way point through the year, I'm very happy with where my FIRE funds are at. Given that I didn't even have a plan for FIRE at the start of the year I'm really pleased with my progress. I'm looking forward to a strong second half of the year now that the big expense of the house move is complete and I am back in a paying freelance contract - not to mention the income generating side hustles which I've started.
So, I'm interested to hear how you're getting on now that we're over half-way through 2016. Have you seen much impact in your investments as a result of Brexit? Have you been enjoying the unusually hot British weather?! As always I'd love to hear from you and appreciate your comments...
Each month I publish the following regular progress updates toward achieving my second goal for 2016 which includes the pursuit of Financial Independence:
1. Portfolio Value and Net Worth as it stood at the end of the previous month
2. Income, Expenses and Savings achieved for the previous month
3. My Investing Choice for the previous month's savings
This post covers point 1 above: Portfolio Value and Net Worth at the end of March 2016.
Portfolio Value - end Mar 2016
My portfolio includes the savings and investments in my Freedom Kitty as well as my Personal Pension, the combination of which make up my "FI Before 50 Roadmap".
FREEDOM KITTY
Here is the end of month value of my Freedom Kitty:
As you can see the total amount I'd invested into my Freedom Kitty by the end of Feb was £1,200. In March with the ISA year end looming I managed to contribute a whopping £14,810.53 in order to max out my ISA allowance for the year.
The reason I was able to do this was because I sold my flat (which I had owned since 1999) earlier this year and I made some profit (after putting aside money to cover what I anticipate will be the capital gains tax liability). I have had the money from the flat sale sat in my current account while I decided whether I would likely need it for my upcoming house purchase with TheBF. As we progressed through March it became evident to me that I should be able to use some of the money to pump into my ISA without causing us any problems with the house purchase (mostly because we're using our mortgage to cover up-front costs).
I'd also not yet invested the money I'd saved for the Freedom Kitty in January and February so these contributed to the figure. So the money I was able to put into my ISA in March broke down as follows:
Flat sale profit - £12,135.00
Savings from January - £678.78
Savings from February - £1,048.22
Savings from March - £948.53
TOTAL - £14,810.53
Within the 2015/2016 tax year I have paid a total of £16,010.53 into my St. James Place ISA. The ISA allowance for the year is £15,240, which means that the up-front fees for my ISA came to £770.53, which looks to be an initial fee of 5%. I don't yet have a benchmark to compare this up-front fee against, but I will certainly be paying a lot more attention to both up-front fees and ongoing fund fees from now on.
Due to the up-front fee, the current value of my ISA is less than the total amount I have invested by -£706.53, I'm hoping to see this deficit disappear over the course of the coming year, but who knows what may happen!
I have decided to consider an alternative ISA provider for the 2016/2017 tax year, so I've got some research to do in order to pick a good one!
Here's how the Freedom Kitty is tracking for the year - I've set myself a target of £23,000 for this calendar year (Jan-Dec 2016):
At 66.54%, I'm now about two thirds of the way to achieving my Freedom Kitty goal for 2016 with 9 months still to go. Though of course I have been helped along the way to this target by the money from my flat sale.
Here's how the Freedom Kitty is tracking against the overall target of £209,590:
It's particularly satisfying to see the percentage for my overall Freedom Kitty target shoot up from 0.54% to 7.3%. With 9 years 3 months to go until my desired FIRE date, I think this is a healthy percentage to be at. If I can manage 10% of the way to the £209,590 target by the end of the year I'll be very happy.
PERSONAL PENSION
Here is the end of month value of my Personal Pension:
In March the monthly pension contribution from my business account was £3,000 again. This is great because my monthly target is £2,000. As I mentioned last month, I'm not currently working on a contract so there's no income into my business account due in March. I've decided to postpone starting a new contract until after we've moved house, which means it's likely that my business account will not have any sales income until August. For this reason I have asked my financial advisor to reduce my company's pension contributions to £1,000 per month with this change taking effect in May. However, for now at least, I'm ahead of schedule for achieving my pension contributions target this year.
Here's how the Personal Pension is tracking for the year - I've set myself a target of £110,000 for this year:
I've got about 65% of the way still to go to hit my pension target for this year. My ability to achieve this target looks like it will really hinge on how soon I secure a work contract after our house move.
Here's how the Personal Pension is tracking against the overall target of £364,965:
I've achieved 24.59% of my overall target for my Personal Pension goal, next month I should hit a nice milestone of 25%, and that will feel good!
Net Worth - end Mar 2016
I don't include assets such as car, valuables or house sundries in this calculation - it's really only the big or purely savings items I choose to include. The credit card debt listed is my monthly spend which I always pay off in full each month by direct debit. This month sees an increase in my Net Worth of £4,007.66 since last month, a nice increase largely fuelled by my pension contribution I suspect.
Overall March was a very positive month for me in terms of my increasing Portfolio Value and Net Worth. The challenge now is to keep up the good work, which could be tricky with the big house move fast approaching and the uncertainty over when and what my next paying contract will be.
How's your net worth looking at the end of quarter 1? How are your portfolios fairing with the recent turbulent times in the markets? As always I'd love to hear from you and appreciate your comments...
Each month I will be publishing the following regular progress updates toward achieving my second goal for 2016 which includes the pursuit of Financial Independence:
1. Portfolio Value and Net Worth as it stood at the end of the previous month
2. Income, Expenses and Savings achieved for the previous month
3. My Investing Choice for the previous month's savings
This post covers point 1 above: Portfolio Value and Net Worth.
Portfolio Value - end Feb 2016
My portfolio includes the savings and investments in my Freedom Kitty as well as my Personal Pension, the combination of which make up my "FI Before 50 Roadmap".
FREEDOM KITTY
Here is the end of month value of my Freedom Kitty:
This includes my regular £150 contribution to the ISA for February, but does not include any additional money I've managed to save during February - that will be invested in March and so will show up on the March Portfolio post.
As you can see, the current value of my ISA is less than the total amount I have invested so far (by £67). I think that the reason for this is due to the current state of the markets, though I also think that the fees involved with investing through St. James Place are playing a part. I'm a complete newbie to investing and so last year when opting to start saving into a Stocks and Shares ISA I chose St. James Place because I have no idea how to invest (and they already manage my pension). I am planning on reviewing my options for the 2016/2017 ISA year.
Here's how the Freedom Kitty is tracking for the year - I've set myself a target of £23,000 for this year:
Here's how the Freedom Kitty is tracking against the overall target of £209,590:
So I'm just under 5% of the way to achieving my Freedom Kitty target for 2016, and 0.5% of the way to achieving the overall target! Still a long way to go, but it feels great to have made a start, and even better to be tracking my progress on here.
PERSONAL PENSION
Here is the end of month value of my Personal Pension:
At the moment the monthly pension contribution from my business account is £3,000. I have been out of a work contract since the beginning of February 2016 so there is a chance that the monthly pension contributions will be reduced from April if I do not take another contract until later in the year. This will really depend on my work circumstances. For now I'm making great progress with my goal to save £2,000 per month this year.
Here's how the Personal Pension is tracking for the year - I've set myself a target of £110,000 for this year:
So I've got just over 82% of the way still to go to hit my pension target for this year.
Here's how the Personal Pension is tracking against the overall target of £364,965:
At 23% of overall target I'm edging toward being a quarter of the way to my Personal Pension ultimate goal, that feels pretty fantastic. The money in my pension pot has been accumulating over time (to varying degrees) since I was about 25 which means it's had 15 years to reach its current value. Despite nearly being at a quarter milestone I need to continue to push for a high savings rate if I'm to achieve my goal of reaching Financial Independence in 10 years time.
Net Worth - end Feb 2016
I've included the outstanding balances on my credit cards in this calculation. I choose to use credit cards for my every day spending because I earn cashback on them and there is no annual fee (American Express and Barclaycard). I have direct debits set-up to pay these amounts in full each month, and once a year I get a nice little payback from them. I also have a Halifax Credit Card but this is only used when I travel abroad as it offers a decent exchange rate and no fees.
I've found it a really interesting exercise working out my Net Worth, it's something I've never done before so it's nice to know the current total. I've purposely not included any assets such as car, valuables or house sundries, it's really only the big or purely savings items I wanted to include. I'm happy with a current net worth of £225,225 and it will be interesting to see how this figure changes in what promises to be a year of change for me - selling my current house and buying a new one with TheBF.
Well, it feels like this has been quite a long post! I'm hoping that it's been interesting for you to read - I've certainly found it useful compiling it and I'm looking forward to seeing how the figures change each month.
Do you think this post has just about the right level of detail in it, or too much/too little? Is there any information I've not included concerning portfolio values which you'd like to see? Do you track your net worth? As always I'd love to hear from you and appreciate your comments...
