A Year of Shuffling – 2017 in Review – All will be revealed (almost)

Throughout 2017, I have often felt that my progress to Financial Independence (FI) appeared very slow and the task at hand seemed insurmountable. 

Several times I felt that I was getting absolutely nowhere with my savings, only to later update my Monthly Progress Tracker and realise I have actually made a 5 figure gain that month.

Looking back and tracking just how far you have come can really put things into perspective.

A lot of people also seem to be quite interested in this stuff.

So here I present to you my year in review!

Job and Income

In March 2017, I applied for and was successful in securing a new job! This current job is much better suited to what I want out of work. I’ve enjoyed being a part of a smaller, more agile company that’s not bogged down in process and red tape, as well as greater autonomy and flexibility around when and how I work. Even though the additional hours can be extreme at times, overall I am much happier here than I was before.

With a bit of self reflection, I find that I am becoming more of a libertarian as the years go on, and that is reflected in this job choice.

With the new job also came a pay rise! Discussing exact figures on my website is uncouth, so I won’t say anything here. But this new salary has drastically reduced the number of years to financial independence (FI), compared to my first calculation and investment strategy in January 2017. As part of the ongoing strategy, I plan to continue working hard to impress my employer, setting me up to get raises/bonuses and promotions so I can continue to drive down the amount of time to FI.

During the year I have also sold down some assets to put that money toward my investments. Most notably, my car. I sold my new Mazda and downgraded to a 10 year old Yaris. But even the Yaris was sold when I was supplied with an all expenses paid car from work. This boosted this year along quite nicely.

Combined with this was also my annual leave pay out from my last job and a non trivial tax return.

Increased salary, sold my car and received an annual leave payout. I will have to work much harder in the year ahead to find additional sources of income if I am to beat 2017.

Spending

I have done some hard number crunching and can present my spending numbers for the year just passed. All figures are in $AUD.

CategoriesSpendComments
Grand Total$26,211.06
Rent$12,430The overwhelming cost in my life is rent. However with Steph moving in, this cost has come down for in the latter part of the year and should remain lower for all of 2018.
Car$3,209.87Transaction costs on buying and selling cars along with registration and insurance which pretty much had to be paid just before I sold the things. A small amount on fuel also.
Groceries$2,823.37This is consistent with my budget estimates at the start of the year.
Play$2,700.86This is actually quite large. Over half of this was for wedding presents. I also include food that I have bought for the purpose of being social in this category.
Holidays$2,100.00This goes into a holding account that I haven't spent yet. I contribute $100 per fortnight starting in March of 2017.
Utilities$1,159.86Gas, Electricity, Internet.
Health
Insurance
$955.47I must pay this to avoid additional tax. I believe that going for a 20min power walk each day is the most effective health insurance of all.
Mobile Phone$498.99A little skewed because I purchased a 1 year Kogan prepaid voucher in July.
Home/
Maintenance
$125.18Bunnings purchases to make some flyscreens, and a set of hair clippers to cut my hair at home.
Other
Transport
$99.52Opal Card costs and an UBER ride.
Takeaway$82.94This is takeaway food I have bought when I couldn't be bothered cooking or wasn't prepared with food for lunch.
Charity$35.00A single contribution to the Cancer Council.

And for those that prefer it in pie form (who doesn’t like data in pie form)!

This brings me to my savings rate. There are a couple of different ways to calculate this.

I can take all income into account, which would give me a savings rate of…

75%

Wohoo

However I can also choose to calculate my savings rate purely from my base salary only. This may be a more accurate method because some sources of my income in 2017 were mostly unrepeatable (for e.g. I can not sell a car every year!)

Which would give me a savings rate of…

67%

I expected as much. With the smaller salary at the start of 2017, presents for the weddings in my immediate family, quite an expensive bucks weekend and the transaction costs on the car, I was always going to take a hit to my savings rate.

I’ll let you decide which ‘savings rate’ is more accurate as there is every possibility I will continue to find ways to make additional income above my salary in the future, but this is not guaranteed.

However there are huge areas of improvement for the year ahead that should ramp that up well above 70%, which is my goal for 2018. Some things that will help me along include:

Rent: Most of 2017 I was paying rent in a share apartment with just 1 other flatmate. However with Steph moving in and becoming the 3rd flatmate in the house, we both save a considerable amount on rent.  I should save about 30% on my rent in 2018.

Car: No cars, no transaction costs. My employer now supplies me with a vehicle and all petrol costs that is sufficient for my needs, during and outside of work hours. This should allow me to contribute an additional $3K into my investments.

Additional income: This website has produced it’s first tiny little bit of income. Who knows, I may be able to live off the proceeds of this website one day (yeah right!).

Salary: I will have at the very least a full year of my higher income for the next year in review. Who knows, I might even get a raise.

Investment returns and net worth

At the start of 2017, I had a net worth of roughly $185,000.

At the start of 2018, it is now roughly $300,000

Wow, I increased my net worth by an astonishing

$115,000!

The breakdown is as follows:

SourceAmount
Dividends$8,900
Portfolio Capital Growth$25,400
Personal Contributions$79,700

These portfolio returns appear completely average compared to some of the crazy growth we have seen in some other asset classes and speculative buys. As far as I am concerned that is a good thing. The comfort and stability that comes from average returns is unbeatable, when people are running around trying to make millions in a few months from crypto-currencies or leveraging themselves into oblivion to buy multiple properties because “house prices always go up“.

Blog

This little blog started from nothing and has now amassed 52 blog posts, almost 12,000 unique users and over 60,000 page views in just 1 year!

It even pulled in a small bit of income, but that was during 2018, so after the cut off for the numbers above.

I am seriously considering experimenting with Google AdSense now that my website has some meat to it. A new post will follow soon when I do!

I couldn’t have done it without you.

Thanks 🙂

What a year! Can’t wait for another one.  I’ll have to update my Investment Strategy progress soon to show the higher income and the effect of Steph’s own savings and income on our expected path to FI (two can live almost as cheap as one).

I kept the categories relatively broad for simplicity sake. If you would like me to drill down further into any particular category, just let me know.

Keep on shuffling

Pat The Shuffler

When I originally posted this I made an error with the split between portfolio capital growth and contributions. I had them at $17,500 and $88,600  respectively. I have now corrected this.

22 Replies to “A Year of Shuffling – 2017 in Review – All will be revealed (almost)”

  1. Wow what an absolutely fantastic year you’ve had, well done 😀
    Congratulations on the new job, I’m sure you’ll do well and earn any raise. Sounds like even without it you are set for an even better 2018.
    Your contributions of $88,600 have blown me away though! I can’t even imagine having that sort of yearly contributions. I’ll have to follow along more to find some extra hints on increasing my income.
    I look forward to reading the update on the difference it makes when you merge finances together.

    1. Miss Balance

      Bah, I made a mathematical error! it was actuall $79,700. I have corrected it now :S

      It has been a really fun ride. $20k of that was from liquidating my car which was an awesome little boost. I’ll see what I can pull in 2018 to make it at lest the same again!

  2. Great post Pat! What an amazing year you have had! And nearly $200 a week of pure dividend income flowing in. I’m really enjoying watching your journey. Your focus and commitment to optimising is inspiring.

    1. The regular dividend income is the best thing for confidence in the concept of financial independence. It is large enough now that I can see how it could with time become a viable income source.

      I always knew this academically, but it is very different to sit here and watch the income drop into your account.

  3. OMG… your grocery bill is minuscule!! Mine was 12K for 2017. Of course, I have 3 adult sons still living with me, so that might have something to do with it.
    Your savings rate is pretty darned good. Make the most of it while you’re DINKS!

    1. Thanks Frogdancer!

      Remember that is my spending on groceries. Steph would have spent similar.

      We also get a completely unfair amount of free fruit, eggs, and certain veggies from our parents and grand parents 🙂

  4. Damn, you had a great year man, well done!!

    That savings rate is pretty impressive. And the dividend income is building nicely.

    I don’t mind Adsense at all. As long as the ads are not in the actual meat of the article it doesn’t bother me. Few extra cents here and there to the stash 😉

    Great job with everything and look forward to seeing how you go this year.

    1. Thanks again SMA

      Love reading your stuff and am quite happy with my progress last year as well.

      Let’s hope it continues 🙂

  5. Hi. I’ve just retired with an early retirement package included and also just turned 60 in January with a great home garden party celebration. I’ve had 3 months so far and it’s amazing the mental freedom I have and physical activity increasing after sitting behind an administrator desk for 35 years and raising 3 children to adulthood. I’ve stumbled on your blog from an online ABC article. Just want to wish you all the very best in your pursuit of life and wholistic freedom of choice earlier than I did. I too will now do community volunteer activities and enjoy family, friends, hobbies and financial freedom as a result of wise money management early on. Cheers

  6. Hi Pat,
    I love your work.
    I have just read the ABC post too and I hope you are just laughing at all the negativity on there. Clearly, the concept of FI is a bit much for some to perceive. I for one hope that I can achieve it too. Question. Do you reinvest dividends on all your ETF’s? Which ones are you currently invested in?
    Good luck and thanks for the inspiration.
    Andy

    1. Hi Andy

      I do reinvest all my dividends at the moment. I am heavy into VAS and a little into VGS. I will increase the proportion in VGS over time.

  7. I like it. I felt the same as you and i managed to retire at 48. I’m now 53. So far so good. The main difference with my plan compared to yours – I decided to move to a country town where you can buy a house for less than 150k. So my accomodation costs are now 25% of what i was paying in the city in rent but now I am buying a house. I’m finding i can get by on about 30k pa. I’m so glad I decided that working to pay my high costs was getting me nowhere. Good luck.

    1. Cheers, property ownership is not off the cards forever. I just don’t see myself owning in Sydney and not for the time being. An affordable coastal town is my ideal.

  8. Hi Pat the Shuffler, you mention health insurance in your expenses list but do not include Income Protection insurance.
    Could you write a few words as to how you decided not to insure your income in case of serious illness or accident?
    Losing your income would derail your Financial Independence plans.

    1. You know Roddy, I don’t have income protection insurance. I am a full time employee in a secure company in a sought after field. I try to keep insurances to a minimum because I feel like there is no end to the types of insurances that insurance companies will offer you to make a profit, that insurance products are necessarily not value for money (in the sense that insurance companies must pay for overheads and make a profit on top of everything they pay out). I also can not stand the predatory, guilt provoking ways these products are advertised, it honestly makes me sick. I know not all will agree and there is definitely a benefit, but that is my position for now.

      If I can make it to my passive income goal, then income protection insurance will well and truly be completely unnecessary.

      1. Few people insure their most valuable asset by far. It went happen to me. Fingers crossed.

        If you & I make it to our retirement from work without life changing accident or illness then we have truly won big in lifes’ biggest lottery & I would not really care about not having that insurance premium money. Sacrifices have been made.

        If we are unlucky than I would prefer to be ill or disabled with a reasonable income than without on a sickness benefit, life is likely to be more expensive & difficult.

        My wife is a nurse in a rehab hospital & sees things from a different perspective.

        My children are still depending on me.

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