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.
I have done some hard number crunching and can present my spending numbers for the year just passed. All figures are in $AUD.
|Rent||$12,430||The 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||$3,209.87||Transaction 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||$2,823.37||This is consistent with my budget estimates at the start of the year.|
|Play||$2,700.86||This 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||$2,100.00||This goes into a holding account that I haven't spent yet. I contribute $100 per fortnight starting in March of 2017.|
|Utilities||$1,159.86||Gas, Electricity, Internet.|
|$955.47||I 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||$498.99||A little skewed because I purchased a 1 year Kogan prepaid voucher in July.|
|$125.18||Bunnings purchases to make some flyscreens, and a set of hair clippers to cut my hair at home.|
|$99.52||Opal Card costs and an UBER ride.|
|Takeaway||$82.94||This is takeaway food I have bought when I couldn't be bothered cooking or wasn't prepared with food for lunch.|
|Charity||$35.00||A 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…
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…
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
The breakdown is as follows:
|Portfolio Capital Growth||$25,400|
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“.
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.
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.