June 2020 Savings ReportBy Money Mage · · Frugality, Savings
Welcome to our June Savings Report.
Lockdown is starting to become tiresome. I heard people say this months ago. But it’s starting to bother me now. It’s been foggy, dull, or raining for what feels like all of June. Maybe it’s just this week. The dog has had a poorly eye, so we haven’t walked her as much.
I actually can’t wait for this to be over.
But it looks like it isn’t going to be. I can’t wait for restaurants to be back open safely. There are a few small independent restaurants nearby that we love. We’re hoping they survive.
The work is opening a brand new office. We were meant to be moving in at the start of April, but the covids had other plans. I was asked to go in and help sort out some furniture moving last week. It’s a really great space.
It’d be nice to be back in an office. I’m starting to lose my work-productivity with this dragging on!
This month was another good month for savings rate, but next month won’t be as good.
We’ve got some expenditure coming up. Some of it will clear on credit cards next month.
- Vet bill for the dog - £70
- Car MOT + service + maintenance - £390
- House Insurance - £210
- Maintenance work on house - £730
So easily next month we’re down over a grand and a bit. Maintenance is always required. We don’t have to do the work on the exterior of the house, but if we don’t the problem’s going to cost a lot more than £730. A toil of homeownership. I could DIY, but it’d take me a couple of weeks of weekends and evenings. And it’s work at height. So sod it.
This month I tried some individual dividend stock picks with some fun money on Trading212* . Only a tiny bit of fun money, a few hundred quid. I’m already regretting it. I knew it’d happen: I’m spending too much time looking at it. It’s why I prefer passive investing. My brain is just wired to tinker and tweak. It’s a habit that’ll take time to break. I’m probably going to leave the portfolio alone for 12 months and see what happens.
We’re continuing to put money into our investments. We’re seen returns of 12% since before the COVID crash.
Anyway, let’s see how the Money Mage household Saving and Investment performance was during June 2020. You can get all Savings Reports at the best of Money Mage.
Let’s see how the Money Mage household Saving and Investment performance was during June 2020. You can get all Savings Reports at the best of Money Mage.
June 2020 Savings Rates
- SR = Savings Rate
- SRp = Savings Rate inc. Pension
Another good month but a little down from where we’d expect. We’ve had a little bit of discretionary spend. The other-MM received a quarterly bonus, and I’ve also received a pay rise. So that’s helped the figures recover. I’m putting all of my pay rise into investments, specifically in my SIPP to make use of higher rate tax relief.
These numbers might look a little boring and consistent. But that’s the way to win the Personal Finance race. It should be like watching grass grow.
We’re in a fortunate position: our expenditure is really low as we’ve cleared the mortgage. 75%+ of everything we earn is saved & invested. The only way we’ll really get these numbers to move is increasing income. I’m not going back to a stressful job, so income will either have to come from the other-MM, alternative income streams, or income from our portfolio.
We’re averaging 77% savings rate across the year so far, and the last 3 months have all been, you guessed it average!
Towards Financial Independence
Our Financial Independence number is quite conservative. This table shows the number of years to achieve Financial Independence in various cases.
- 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.
Our net worth increased in absolute terms by nearly another £10K this month. We’re back well above the COVID crash.
Our FI numbers are now under 4 years including all of our assets. That’s impractical, so excluding the house we’re looking at just under 12 years. Which is awesome.
This month I wrote about how these naive FI figures are a slight over estimate, and how we are aiming to be Financially Independent in our early to mid 40s, which is not that long away.
I continue to warn you again this month: paying attention to net-worth fluctuations during periods of volatility is a fool’s game.
June has seen markets further recover and stabilize. We’ve recovered from our COVID losses, although I still have a pension down about 7-8%. There are worrying warning signs about the wider economy, with tens of thousands of job losses in the UK reported. COVID is not going away either, with cases surging in the US.
We’re still preparing for more volatility. We hold quite a chunk of our portfolio in Cash - about 12.5%. This acts as a very healthy Emergency Fund for us. We’re also stocked up on basic supplies to avoid the supply chain issues we saw at the start of this outbreak, if a second wave hits.
In July and August, we have some maintenance work coming up on the house as mentioned. This is going to cost a couple of grand, but it needs doing. The weather has been terrible, so I’m hoping it picks up over the next few weeks so the tradespeople can get the job done.
This will undoubtedly impact our numbers over the next couple of months, but it needs doing.
Year on Year is still up a healthy 13% You can find more details in the review of 2019.
Here you can see asset allocations this month compared to June 2019.
Whilst equity exposure appears very low, all pensions are in global trackers funds. Investment in equities is almost solely via pensions. We are now both contributing to a S&S ISA. I am now also contributing to an S&S ISA via Vanguard LifeStrategy 80 and a small holding in Vanguard’s FTSE All-World High Dividend Yield $VHYL. The other-MM is more risk averse, so has a slightly higher bond allocation.
You can see from the above table, we have quite a significant change this year. With over a 1000% YoY increase in asset allocation in non-retirement locked investments. This doesn’t reflect growth, but our rebalancing for FI planning. As our pension contributions are growth are looking on-track for 57, it’s time to start focussing on our pre-drawdown plans.
This chart shows our net worth growth since the other-MM started work and I graduated.
You can see our net worth is recovering somewhat. The continued trend upwards this month is quite welcome. Let’s see how the next few months pan out, but I am still expecting 2020 to below forecast.
Whilst we’re mortgage free, and on the path, FI let alone FIRE still seems a very long way away. 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?