Having been thinking about how to manage this blog and speak to the questions and needs that I hear from my readers, I am moving to substack.
You can find my first post and how to subscribe and I hope you will join me. It’s still totally free though I may look to add additional resources in the future for paid subscribers.
Sharing the first paragraph here as well which I hope resonates with you.
In the face of disaster, get your sh*t together
When you stepped into 2025, you may have done it with a fresh vision board, some clear goals, and herbal tea. Or you might have opened a bleary eye and thought – damn, this better be the year I finally get my shi*t together.
However you showed up, the recent changes to the international caring sector (humanitarian, development and beyond) are likely to mean that those goals now seems like jokes as we stare not only the abyss of where the sector might go and how it will impact the people we serve, but the personal potential impact of joblessness and major personal financial turmoil.
So one month in to the year, getting your sh*t together is no longer optional. It’s essential, and it moved up the ‘to do’ list to URGENT. Welcome to the ride.
See you on substack – and all the content on the current website will remain available.
In January my son was hospitalised, and he has only just been discharged. It is heartbreaking to be living in this season, and the nature of his illness means that it might not be a season, but where we live from now on.
Everything has, of course, been put on hold, including this blog. We were already in a challenging place trying to work out my next job, where we will move to and this means that we have to just pause and focus on keeping us all as well as we can be.
One thing I am so grateful for, other than love from family and friends and living in a country with an amazing healthcare system, is how much financial stability has given me breathing space. I’ve always talked about how financial planning prepares us for disaster, but I never believed it would apply to me. I have seen my money plans as positive pathways to great futures – a way of buying freedom, and buying options.
But at this time, it meant that I could take time off work. I could focus entirely on my family and not worry about paying the bills or keeping us all fed and housed. And whilst I hope that I will find another job when my contract ends in December, my savings mean that I won’t have to move my son at a time when that would be detrimental to him.
It’s not the kind of peace and freedom maybe I had in mind, but it has meant so much. It has given me space to focus on love, and at the moment, that is all we can do.
I don’t like to be rushed 😀 Which is why I’m sharing my financial goals now, three weeks into January. I’ve also been having fun over on my Insta – come join me there for daily tips on finance, saving money, food, mindfulness and more.
So let’s focus on getting this done now. I set my financial goals on a call with my accountability partner a couple of weeks ago, and have been fine-tuning them since then. Before I dig in I wanted to share some reflections on discussions with this community and things I have noticed about previous years – these three things are totally linked, and can become a vicious cycle so it’s worth digging into them if you feel stuck:
Don’t procrastinate. Yeah, yeah – getting to things in your own time is different from just not getting there. You know in yourself when you’re getting into the right mindset or moment, and when you’re lying to yourself. This is wher an accountability partner can be great – someone to call you out, lovingly, when you are still ‘waiting for the right time’. With financial issues, procrastination can cost you big time. Compound interest means that the earlier you make a move to save and invest, the more the money will grow to. Inflation means that the money in your hand will likely never be worth more than it is today. Not paying off debt increases the amount you spend on interest (and likely the stress in your mind). Are any of those costs worth it?
If there is anything holding you back, I strongly advise you to find out why you haven’t done it yet – think about your money mindset. People don’t procrastinate because they are lazy or stupid – we all have things which hold us back from making moves, even if they are so embedded in our subconscious that we don’t really understand them. You may be held back by fear or shame (what if I find out I spend all my money on nonesense and I’m embarrassed about what I have wasted up to now?) or by limiting beliefs (What’s the point in budgeting for my food shop – I’m never going to make enough for my big dreams anway). Or by the sense that you’ve tried this before and nothing has stuck. All of these are totally understandable, but they will all just hold you back. So dig into how you feel and spend some time getting your mind right.
Dreaming big is amazing, but make sure it feels meaningful, rather thanfeeling overwhelming. Setting huge goals is a big driver for many people, and I definitely don’t advocate playing small when setting out your ambitions. Part of the work is to come down a level or two from the big goal and set out smaller approaches on a timeline. I always try and set goals which are realistic with stretch – they aren’t so easy that they will happen even without me getting behind them, but they aren’t so insane that it’s less ‘doing the work’ and more ‘wishful thinking’.
For me, 2024 is a strange year financially as I have to move jobs. My company has mandatory rotation (i.e. you can’t stay in one place for more than five years – it’s more complex than this but this is what it means for me right now) and I haven’t been with them long enough for them to have to find me a job. So by 1st January 2025, I could very easily be out of work. There are many reasons why I don’t believe this will happen, but I do have to find another position, and it will 90% certain mean moving countries. This isn’t unusual for the kids and I, but it’s not very relaxing and also means making other choices with money which prepare for a time when I might not be earning. In addition, my son starts Year 11, or his GCSE exam year in the summer of 2024, meaning if I don’t have a job yet I might have to stay without work until the summer of 2025 when he is done, and move then.
So many moving parts! But my aim is to set financial goals and be ok with trying to get a strong foundation in case the worst happens, whilst preparing for the best.
These might all seem somewhat woolly, but for me this is the first step. Looking at how to save more, be accountable, and stay focused, comes next in terms of building out detailed approaches. But for now I am happy that I have enough focus, and optimism, to make 2024 work for me.
Welcome to 2024! Whilst lots of bloggers and personal finance folk are kicking off with goals and plans for 2024, I am coming into it a bit more gently. I worked crazy hours November and December right up to Christmas, so I’m just working on reviewing last year and getting into the right mindset for moving forward.
That said, I already have GREAT plans for this blog and the related accounts in 2024 so watch this space! And until the launch of the transformation in February, do come and join me on my Insta.
I like to start the new year with a stocktake of how my finances are doing and whether my savings and investments went according to plan, then using this as a baseline to setting some plans and goals for the coming year and understanding how well it worked. This isn’t the only focus for the year, so check out future posts to find out more about setting intentions, vision boards and the like. But it is a good way of gathering some baseline data and starting off from a position of honesty about my behaviours.
2023 wasn’t as challenging as 2022 when it comes to finances and socio-economic issues, but it also wasn’t amazing. Inflation went up by an additional 4% over the year, which was a slow down on the previous year but continued challenges with rising basic costs on food, transport, and mortgages or rents, mean that most people felt the pinch. Food inflation rose to 19% by mid-2023. This is a measure of inflation just on food and non-alcoholic drinks, which can be impacted by things such as transport costs or conflict which limits shipping (watch this 2024 space for more on the Red Sea issues on shipping and their impact on household costs…) which people really felt at the shop.
Unlike 2022, I undertook a complete review of my spending and was pretty horrified by how much I have been shelling out. I will say two things – one is that I live in Denmark, and my salary includes a ‘cost of living’ allowance which recognises the increased costs here compared to the UK. Denmark is the 10th most expensive city in the world, and whilst this isn’t an excuse there are areas where I feel like we have been really careful in making choices and the overall costs have still been huge.
So what did I spend?
So in total, I spent almost £90,000 in 2023. Even with Denmark prices, and with my ‘pay yourself first‘ savings approach, getting my budget under control is deiniftely my focus for 2024.
25% of that was my mortgage, then there were five other areas around 10% of overall spend: childcare, groceries, holidays, house repairs and utilities. In total, that’s 75% of my entire spend, with everything else fitting into the other 25%. There are savings to be made here (I was horriffied that my blasé approach to subscriptions – i.e. if one person in the house values it, we keep it) means we are spending more than £500a year on this alone. But that’s good news as it’s something with infinite possibilities to work on.
TOTAL GBP
Monthly average
%
Childcare
£ 6,985
£ 582.07
8
Clothes
£ 579
£ 48.23
1
Cosmetics
£ 378
£ 31.47
0
Eating Out
£ 3,656
£ 304.68
4
Extra-Curricular
£ 1,669
£ 139.06
2
Gifts
£ 2,337
£ 194.78
3
Groceries
£ 9,161
£ 763.38
10
Health
£ 1,739
£ 144.92
2
Holidays
£ 8,984
£ 748.68
10
House
£ 10,240
£ 853.29
12
Insurance
£ 3,701
£ 308.39
4
Kids
£ 2,039
£ 169.29
2
Mortgage
£ 20,717
£ 1,726.42
23
Shopping (misc)
£ 347
£ 28.90
0
Legal
£ 116
£ 9.69
0
Subscriptions
£ 779
£ 64.88
1
Treats
£ 492
£ 41.01
1
Transport
£ 4,892
£ 407.70
6
Utilities
£ 9,533
£ 794.43
11
£ 88,344
£ 7,362.01
How was your spending in 2023, and what do you want to change? Whilst actual numbers will differ depending on location, priorities, household size, available income etc, the percentages should at least mimic your priorities. What does your spending tell you about areas you might want to work on in 2024?
Ah, here we are again! The most wonderful time of the year, or a bit of a damp squib where we are all too knackered to really enjoy the festivities and starting to panic for the new year. In our house it’s somewhere in the middle, so some brilliant quality family time, nice walks in the woods and suppers by the fire, as well as lots of early nights and the occasional argument. So far, so normal (whatever the advertisements try and make you believe), but I have definitely enjoyed the lack of pressure and a chance to just unwind with the kids.
Firstly, I learnt that I want to make some changes to this blog and how I show up in the personal finance space and beyond, so watch this space for some exciting announcements!
Overall though, this year has been an interesting one financially. Here are some key things I learnt:
I spent big on things which I felt were worth it, without giving it another thought. Whilst I remain relatively frugal (well – ‘fake frugal‘ is more like it, still have issues with the version of how I spend money as it exists in my mind, and how it exists in my bank account), mindful spending doesn’t really concern me. In 2023 this was mostly holidays and travel, including a trip to see the Northern Lights with the kids in January; a major birthday party joint with my best friend in August; and a family holiday with them and my mum by train across four countries in October. I paid for all of these, with the elements not for my children being gifts for birthdays/ Christmas etc, but they were all fabulous.
There are different kinds of privilege and cultural expectations, and that these impact our financial lives. This absolutely isn’t news – even my reflections above noted how much of that holiday money was spent to ensure that the people I love could come with me. I am white, and do not claim experiences like the Black Tax in which the responsibility of taking people with you on an upwardly mobile journey can make that journey much slower. But my own background means that, as a friend told me, I am ‘the success story, the one that got out‘. And that comes with responsibilities to extend a hand, repeatedly, to family and friends who are struggling. 2023 saw a lot more people struggling than before, and it feels like there is more pressure to support people around me, and less opportunity for others to extend that same support to me. I am happy to be here for people, but it’s also getting kind of exhausting.
The emergency fund is real. I had what felt like endless emergencies this year – broken pipes, a flooded basement, a broken school laptop for my son, a missed car MOT and on and on. All of these things mattered, but the head space was taken up by trying to find workmen in Denmark who are available and will actually come through, rather than freaking out about being able to pay for things. Since both my dishwasher and Quooker (boiling water tap thing) both stopped working during Christmas, I don’t expect that there will be fewer outgoings in 2024, but the money is there. And having that peace of mind is what I saved it for!
Being savvy with your money matters – as does understanding just enough about economic policy and trends. A lot of 2023 was watching interest rates and inflation rise. Whilst this sort of felt like more economic blah and uncertainty, the average impact on UK mortgage holders was a rise of about £300 a month, or £3,400 per year, on the same mortgage. If you are struggling financially that is a massive, unexpected increase in your outgoings, and isn’t based on anything you have control over. So whilst this post isn’t about what 2023 looked like globally on finance (TLDR, not great) being aware of what the risks are and keeping a weather eye on what might be coming your way, really does matter.
I’ve been writing about my mini-real estate journey throughout this blog: the decision to sell what had been our family home after renting it out: the thought process of buying my new rental: and the associated costs and process of getting to rented. Come and join me on Insta for more of the same, plus money saving tips, recipes, and frugal inspiration!
This week I wanted to look at the 1% rule, and whether it’s really relevant to those of us in the UK (and presumably a lot of the rest of Europe). As the majority of FIRE media creators seem to be from the USA, there is a lot of talk about how fabulous real estate is as a wealth building tool, and lots of great advice about how to calculate options and, essentially, when things are a good idea.
But does the 1% rule work outside of the States?
The 1% rule is a way of thinking about whether the rental property will make is going to pay off the value of the home in a reasonable timeline. As a property investor, this is an indication of a plan which is likely to make you money in the long term rather than being something that just breaks even.
So – if you buy a house for $200,000, it should rent out for $2,000 – or a $300,000 house for $3,000 etc. The purchase price should include everything it takes for you to get the house tenanted. So any renovations, upgrades, essential additions such as smoke or carbon monoxide alarms; along with legal costs of purchase, and of setting up as a rental.
Once you have tenants in place, you will also need to pay a bunch of costs from the income, including maintenance and repairs, taxes, landlord insurance etc. You can think about this as the 50% rule whereby you assume you’ll spend 50% of your income as oprating costs over the long term. You might not – and you might spend very little for a few years then have to repair a roof – but preparing for that spend is part of being a landlord.
So I had a look at some average house and rental prices in the UK to see how it might work. I’ve gone with the median house price rather than the mean since every area of the UK has super expensive enclaves and properties which are not reflected further down the chain. This is true everywhere, but in Cheshire where my rental property is, average prices are around £260,078 also includes the Golden Triangle where homes are more like £2,600,000. So the median is a more useful figure for back-of-the-envelope thinking.
Rent 23
Median house price
Rental return
North West
£ 958
£ 185,000
0.52%
Greater London
£ 1,804
£ 533,687
0.34%
North East
£ 594
£ 140,000
0.42%
South East
£ 1,164
£ 388,900
0.30%
UK minus London
£ 1,113
£ 272,000
0.41%
My previous rental
£ 1,225
£ 450,000
0.27%
Current rental
£ 895
£ 235,000
0.38%
Looking at a few different areas (which are roughly the more expensive and less expensive parts of England and Wales) it looks like the average likely return in the UK is about 0.38%– significantly less than the 1% used in US calculations.
This makes sense to me in terms of the house prices here, and what renters could actually afford. The chances of the average person being able to pay rents otherwise are basically zero. In the South East for example, the average income is £40,300 and take home monthly pay £3,358. The 1% rule would expect that an average rent here would be £3,889 – or significantly more than the average take home pay.
So there are multiple factors at play, which make sense. But it’s also helpful to know what’s likely. It doesn’t make investing in property in the UK a bad idea (more of the pros and cons another time) but hopefully this information is useful in your own planning and calculations.
This should really be entitled “so I finally rented out my new rental” but hurray! It is done. I have been talking about moving on my rental journey since I started this blog, and my last post which was almost three months ago (sorry dear readers, long story which I might come back to) set out the decision making and purchase of that property.
I wanted to talk a little bit about the financial side of it here. I paid £230,000 for the property. In my home town, that amount would barely even buy you a garage, but further north in the UK it really does buy you more. I’ve written extensively about choosing to sell my rental in my home town but maintain a rental in the UK so I won’t go back over it here, but it was a decision that took a long time – and realistically I still have doubts about. But it’s done, so on we go!
I also bought the property free and clear, so it has no mortgage on it. I saved this money essentially in equity from my previous house, which I had laser-focused paying off over the last five years. Whilst I hadn’t fully paid it off, issues with rising mortgage rates and my challenges of spending so much time overseas meant that the mortgage cost of it was starting to really increase. There were costs associated with the purchase and legal elements but because it was such a relatively cheap property, these were significantly (and disproportionately) lower than my last house. A big element is that the stamp duty threshold in the UK – basically a tax on a house purchase – doesn’t kick in until a property is worth more than £250,000, meaning I didn’t have to fork out the £7,000 additional amount that I did last time. The house is a new build and is on a company managed estate. This means there is a monthly fee (of about £60, payable by the tenant) but there was additional set of costs for the purchase based on legal assessment and sign up to the management company. In total this all came to £2,636.
Legal and purchase costs
Standard legal and purchase fees
£ 1,968
Legal and purchase fees relating to estate management
£ 668
£ 2,636
In addition to the standard costs, it took three months to rent out, following about six months of the purchase process since I struggled to find what I wanted, and it took some time for the process to go through. This period has a financial implication as well. In addition there are a few costs needed to get the house tenant-ready, and between these I paid out an additional £1,233.
So at this point in time, I have £230,000 of my capital tied up in real estate. In addition, buying and preparing the property for rental required an outlay of £3,869 or about an additional 1.7% on top of the purchase price. As noted, this is unique to a low cost house, as these costs disproportionately increase with homes in higher price brackets.
And now it’s rented out! The rent is set at £850 per month, which is quite a bit less than the UK average of £1000 (excluding Greater London) but that’s based on the location. Minus the letting agent fee which I need as a) I don’t live near the property and b) I am utterly useless at household maintenance, of 10%, I will make an initial net of £765, from which I will need to pay any additional maintenance or upkeep, as well as continued landlord insurance for which I will keep back 10% of the net, or about £1,000 per year. So with a projected profit of about £8,000 per year, I will not be retiring fully on my rental empire. But it works – to stay invested in the real estate market; have some money which isn’t at the whim of the stock market; to have a second option for my family in case the s**t hits the fan; and to have a regular stream of income. And I am glad it’s set up so I can leave it to tick along whilst I focus on other things!
With all the busyness going on in the world, my blog posts here are a bit less frequent – but I am stlil around, and still thinking all the time about personal finance, and how to make this as useful as possible. Thanks for sticking with me! Come keep me company as well over on the related Insta page, which has a lot more about daily FIRE life choices (mostly food, let’s be honest) and more.
The last few months I have been thinking about the next season of my life, and some of the related choices. My job has a mandatory rotation – basically I have to leave every five years or so and go to a new position in a new country. Aside from this being knackering for me, it has major impacts on my kids’ education. And their educational needs and choices has massive impacts on my options.
When you have kids, this particularly sucks. Trying to move at ‘the right age’, not move during a school year, manage what each childs’ needs are and who to prioritise – and that’s alongside trying to balance what location and role is available at the point where I have to move.
I have been focused up to now on their basic education and making choices around the kind of school and curriculum I want them to go through, funding this since our expat life style and having to move often usually means public schools aren’t an option, and just keeping them happy. For higher education, I have assumed that I will work and cash flow this.
Two major issues have come up which surprised me. Firstly, British children need to live in the UK for three years before univsersity in order to be eligible to pay ‘home fees’. This means I either need to go back to the UK summer 2024 in order for my son to be there long enough – taking a massive hit on income since I’d have to change jobs etc – or be prepared to pay international fees. The difference is significant, with the University of London charging £9,250 for one year undergraduate, compared to £21,500 for an international student. Thankfully accessing student loans seems to be based on citizenship.
But this has thrown out my calculations quite significantly. The average cost of living as a student in the UK is between £900-1400 per month (London hikes up the prices). So to attend university now as a home student requires around £71,000 for the three years for a home student, or £107,000 for an international. With inflation and assuming we aren’t eligible for home fees, this would be around £120,000 for my son and £130,000 for my daughter. And an additional £250,000 that I need to either save for or be able to cash flow. Ouch.
This week I also found an update from Financial Samurai, who retired at 34. He is returning to work in order to ensure he can pay for college for his two children. There’s a very detailed post here, which also sets out the pros and cons of returning to work. His post also sets out an assumption that he will need to cash flow $1.5m for this purpose: assuming $700,000 for his son in 2036 and $800,000 in 2039 for his daughter. The assumption is based off the current $320,000 price tag of a four-year private university that grows in cost by 5% a year.
Obviously the cost of higher education in the USA is significantly more than in the UK or most of Europe. But there are scholarships and a number of financial aid intruments that the UK doesn’t have in place, since we only introduced tuition fees in 1998, and the support around higher education hasn’t grown with the increasing fees.
But this is all quite depressing. The FIRE community, unspurprisingly, also contains a number of different approaches to college education and the extent to which we should plan to pay for this for our children. Mr Money Mustache doesn’t save for his son’s college, and doesn’t anticipate he will want to enrol.
Others suggest that a solid approach – and one which splits the risk with the children themselves – would be to plan to save one-third, cash-flow one third, and have the student take on loans etc for the remainder. In our case that means saving an additional £80,000 and cash-flowing £13-4,000 per year over six years, and assuming each child comes out with about £40,000 in debt. Luckily my kids’ ages mean they should be in college at different times. And whilst £40,000 seems to me like a massive debt to have at 21, I am not sure that other options we are going to have.
So let’s see. For now it seems that the financial hit I would take on returning to the UK significantly outweighs the increased costs for university education. And I recognise that there are lots of different pathways coming up for training and education, as well as new employment pathways which don’t require a degree. University is unlikely to become obsolete – especially for things like medical degrees – but I expect other, major questions will be coming up as well as we continue this discussion.
Once again, life took over and the blog (and my Insta) took a back seat. Spending time supporting family; travelling with work; and generally taking a bit of time to Think About Stuff means that I have been focused elsewhere. Photos throughout this post from a trip to South Africa 🙂
One of the things which I spend a lot of time thinking about is The List. I am going to go out on a limb here and say that every woman has The List, following us around like a puppy widdling on the carpets. If you ignore it, it only gets worse. And you’ll end up having to replace the carpets as well.
I am sure other people have The List. But I suspect you also have your own corners of the Internet to chat about it, so you’re welcome here but my focus is on women, and single mums in particular.
It’s a significant focus of the book/film I Don’t Know How She Does It where it’s used as a literary device to show how busy the main character, Kate’s, head is. She’s constantly shown to be in the middle of her List that includes everything from preparing packed lunches or a leading a high level business meeting to remembering to have sex with her husband (“It’s been three weeks! Move up the list to Urgent!”). Actually I loathe this film because at the end she realises she can’t have it all and quits her corporate role to have better work-life balance. I mean, I love a work-life balance as much as the next person, but it would be amazing if we could have some media which actually says – go ahead and do your thing, whatever it might be. And by the way, it might be the high-status, high-stakes power moves. If you’re there, it’s not a mistake until YOU decide it is.
Anyway, The List represents the cognitive and emotional load that (mostly) women hold in terms of day to day responsibilities to make it all work. Any single parent regardless of gender will have this, because it is literally just you keeping food on the table and the wolves as far away as possible.
Research found that this silent labour is divided into three categories, which overlap, making it harder to measure the time spent and the impact. Cognitive labour means thinking about keeping the wheels on: the practical elements of household management including shopping, cooking, household maintenance etc. Emotional labour is managing family reactions and sentiments: not just organising the playdate for your kids, but making sure they are confident and happy, the other parent knows what the pitfalls might be, ensuring they are well rested to they are calm enough to enjoy it etc etc. The third area is where these two overlap, and all of the anticipation and planning needed to make both the practicalities and the emotional responses to them run smoothly enough to keep things moving.
There is a lot of research about how this burden falls largely on women – and extends past kids to taking on responsibilities for extended family, remembering and navigating family and cultural celebrations etc – compared to men. And on the impact this has on women’s ability to make career choices, work over time, get promoted and achieve higher salaries and more successful careers in the long term.
Anyway, all that to say that we all have The List. There are short, medium and long term things on it, and also Zombie Apocalpyse things which we should probably plan for, just in case. This latter is usually what comes up in the middle of the night.
In April I really took time to try and work on some of the medium and longer term things, even taking days of work to get to them. I involved the kids in some of them to share the responsibility, and we had joint rewards when things got done. Items included:
Painted the front door
Tried to fix the doorbell: couldn’t do so, bought and fitted a new one
Cut back all the roses, random other plants I don’t know etc in the garden
De-cluttered all the random piles of books, donated those we don’t want and organised the keepers
Ruthless de-clutter of surfaces where things gather
Discussed, planned, wrote my updated Will, had it witnessed and sent it in. This also took a lot in terms of planning Guardianship of the kids if the worst happens, discussing it (in an age appropriate way) with them, and with the potenital Guardians. Pretty heavy going
Moved an old JISA into my daughter’s current ISA plan
Put an offer in on a rental property
Got the boiler serviced
Got the Quooker (hot tap thing) fixed – this has taken MONTHS to find someone to do it
Organised daughter’s birthday party and presents for later in May
Son’s hospital / doctor / dentist and what not appointments all lined up including a half day of really working through plans and options with him
50 work things which needed to get done including performance reviews, tidying up my CV, and applying for new jobs
And to be honest I do have a sense of feeling lighter. I know that The List is self-regenerating and many of the things on it will not biodegrade but will continue, widdling all over the carpet. But for now, it’s less of an albatross and more of a homing pigeon, and I can live with that.
Come and join me over on Instagram, for regular tips on money saving (ok, very often about meal planning and grocery budgets), simple pleasures, mindful money and of course, weekly hang outs with the Barbies who are also here to inspire you!
Since we are about to end the 2022-23 tax year in the UK, it’s the time of year I always calculate my net worth. I also did this in December, but since I had just sold my rental property and was calculating expenses, taxes and so on I kept some back for those purposes. Now the dust has settled, I have a much clearer picture.
This time last year I was writing about how it feels to be at almost $1 million net worth. Interestingly, and largely thanks to changes in FOREX rates and that I have my investments in sterling, my dollar net worth hasn’t changed much and now stands at $980,000. But the true amount has increased: from £ 717,677 to £793,000 or an overall growth of £75,324 over one year.
That equates to an increase of more than £6,250 per month which I can feel pretty proud of! It has also been a shocker of a year in terms of the markets, soaring cost of living and a whole bunch of other apocolyptic doom feelings.
And it’s a reminder that time in the market rather than timing the market, and keeping consistent, is more important than looking for tricks.
So what is my portfolio made of?
With the sale of my rental, this is now much less heavy on house equity. I have split my savings into two here – one is the investments I have, and the other is a chunk of money which I intend to use to buy a rental property, and about £100,000 set aside for other investments and savings opportunities.
Pensions
£ 288,826
Savings
£ 68,711
House Equity
£ 90,464
Money to invest
£ 345,000
TOTAL
£ 793,001
The main growth has been in ‘money to invest’ – largely because I worked out all the house sale costs and this is the final figure – and also in pensions. I pay a significant chunk to my employer pension which is also matched, and I also added to my SIPP when I sold my rental.
I always find it interesting how people calculate their FIRE number and what they need to live on. In theory I need £30,000 per year in retirement. Using the 25 x income calculation, would mean aiming for a net worth of £750,000 which I am already above.
But there are a couple of issues with this. One is that my pensions can’t be accessed until 67 (or if all the pensions changes proposed come to pass, 100 years old by the time I get there). The other is that retiring on that money assumes that my kids are financially independent. I spend a lot more than £30,000 at the moment (I would say largely on them though I am sure they would disagree), and it’s an interesting moment of reflection about the choices I am making for me and the kids, and what our options are. My net worth also doesn’t include a paid for house any more, and my calculation of income required on retirement assumes that I have one and therefore don’t have a mortgage or rent.
So that’s it. There are other very small pots in there like crypto and angel investments, but these are the real pillars of my financial plan. But the pot is growing, and I am staying on the path. Kudos to all of you following your dreams of independence!
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