October 2019 Savings Report
By Money Mage · · Frugality, SavingsThis is the second in our new Savings Report series. Savings Report for September 2019 was the first, and you’ll be able to get them all at the best of Money Mage
This month has two new additions: Savings Rate and Towards FI.
Savings Rate
I will be computing two savings rates.
- SR - Savings from net income
- SRp - Savings including gross pension contributions
Savings Rate (SR)
- S = Household monthly savings & investments contributions from net income
- I = Household total net income, all sources
SR = S / I
This is how I’ll be computing our Savings Rate going forward. However, it misses a big portion of our savings. We both invest in our pensions for tax efficiency.
Savings Rate inc. Pension (SRp)
- Sp = Household total gross pension contributions this month including tax benefit
- S = Household monthly savings & investments contributions from net income
- I = Household total net income, all sources
SRp = (S + SP) / (I + SP)
This computes our Savings Rate (including Pension Contributions). Our Pension Contributions are made gross. To fairly account for the tax benefit, our pension contributions are included alongside of our net income (I).
October 2019 Savings Rates
| Date | SR | SRp |
|---|---|---|
| October 2019 | 65.9% | 73.4% |
| September 2019 | 70.5% | 73.7% |
Towards FI
Our Financial Independence number is quite conservative.
As I’ve said before, FI yet alone FIRE seem a very long way off. We don’t particularly have any strong desire to retire before 55. We do have a strong desire to be Financially Independent well before then.
We’d be looking at 3% drawdown. And a 60% increase in current monthly expenses to provide a healthy buffer. And to enjoy life.
Given some of our net worth is illiquid, there are three figures provided:
- FIh = Years to FI based on Total Assets.
- FIp = Years to FI excluding the house, but including illiquid pensions.
- FI = Years to FI excluding the house and other illiquid assets.
I’ll revisit this, probably next month.
I’ll try to consider a more realistic ‘liquid bridge’ before our Pensions can be accessed. I’ll also try to include some predicted growth.
I expect the numbers will come down given this.
| Date | FIh | FIp | FI |
|---|---|---|---|
| October 2019 | 4.9 | 13.0 | 17.6 |
| September 2019 | 5.0 | 13.0 | 17.7 |
FI Good News
Whilst these numbers probably look quite bleak in the FI/FIRE community, the MM-household is quite conservative.
Lower risk taking. Safe hands.
We both want to be well on the way to FI by age ~40. That looks to be on track at least! Though you never know what’s around the corner!
October 2019 Recap
October has been another good month. We have settled down our expenses after refurbishing the hallway earlier in the year. Back to our usual ~£1k/month.
Going Well
- We went on holiday to Rome. Post coming soon! This is one overseas break a year..
- I have further increased my pension contributions to benefit from higher relief. This won’t show in the figures until next month (or December?) as work take forever to make the payments.
- My job change has meant less stress. I used to call it “hell work”. I’m now quite enjoying it. Changing job was totally worth it after 10 years. The new job has basically the same base salary, but less takehome than 2018 as I had a one time bonus.
- Money Mage has been going well, with an up-tick in traffic. I’ve rebranded, as you can see. I hope you like it! DIY!
- Drinking has been nearly Zero in October. I think I’ve had two pints the whole of October! The other-MM barely drinks at all anyway. Continuing to help the wallet, mind, and health.
Should do better
- Reading. Still not reading enough. I did take the Kindle to Italy but barely touched it.
- Running has been absolute rubbish in October. Need to fix this.
- Food Bills. Weekly spend is out of bounds. Need to look at why. Snacks, I expect!
October 2019
October was hit by some poor performance in two pension funds. They were both down. No mind. We can buy units more cheaply.
Month on Month net worth increased by 0.66%, and Year on Year is at 21%.
| Type | MoM% | YoY% |
|---|
Asset Allocations
Here you can see asset allocations this month compared to October 2018.
Whilst equity exposure appears very low, all pensions are in global trackers funds. Investment in equities is almost solely via pensions.
Lifetime
This chart shows our net worth growth since the other-MM started work and I graduated.
A bit of a bump the last couple of months with a change in my job. This meant reduced pension contributions during probation. I expect it to start trending back up into 2020.
Whilst we’re mortgage free, and on the path, FI let alone FIRE still seems a very long way away. Subscribe for more. Subscribe now and follow me on Twitter @moneymagery. I hope you like the charts, I am a fan of Tufte*.
How is your journey to FI going?
