Money

Net Worth and other updates – March 2018

The first of the month can only mean one thing; time to update the spreadsheet and share net worth updates with you all. I’ll share the good times, so-so times and bad times, all under the thin cloak of an alias. So here is March’s review.

How was March?

  • So how has it been generally? Overall it feels good, I’ve felt busy and rushed at the start of the month, but much more relaxed on my break. I’ve got a refreshed love of travel, taking it slowly and just appreciating everything.
  • And the weather. Unusually for London, we’ve had a snowy start to March and spring. On one hand it makes me so grateful I’ve got great heating at home, but it shows how the UK infrastructure falls apart at a touch of snow.
  • I’m still loving blogging, and finding it so much fun and engaging. But I need to get more organised, and get a strict posting schedule sorted. Currently planning to do long posts Tuesday and Thursday, mainly as everyone else seem to do Monday / Wednesday / Friday. And nothing like being contrary. And I’m keeping an eye out for that 3 month slump. Need to avoid slumping!
  • Collaborating more is something that appeals to me, and I’m trying to work out what that looks like in my head. I really want to do more on the feminist side, and get more women into thinking about their money.
  • Podcasts are growing on me, and I’m really thinking of trying to make one. I know the market is oversaturated, and amateur podcasts are ten a penny, but I think it could be great fun to try. To learn a new creative skill, and understand what goes into making a good podcast. Like this blog, I won’t monetise or attempt to make money, but mainly as a creative pursuit and a learning experience.
  • I’ve started playing more with Pinterest, but I lost my mojo and my pins were ugly. I need to get back into it and make prettier pins. I get more done when I’m in the right mood, so I’ll wait until I’m ready to pick this up again.

#theatreofthemonth

The most impactful theatre I saw this month was yet again a Shakespeare production. I never fail to be amazed at how relevant it is today. And this production was certainly very topical, Julius Caesar at the Bridge Theatre. Staged using the audience, with loads of angry plebeians wearing red “Caesar” baseball caps was a great mockery of Trump and the idolisation of people. It’s a great tale of power, power struggles and the downfall of idols. Oh, and it had Ben Whishaw in it, and he was surprisingly good. Here is the trailer if you fancy a look.

Spending

The end of March is a key time for spending, I generally do my tax years April to March, and ignore those 5 days, cause life is too short. And the numbers are in. For the 2017/2018 tax year I’m at £20.1k for spending. Which is a little over my £20k target, but I’m not sweating the small stuff. This is a good number, and reduced from last year without any sacrifices or reduction in enjoyment. And we’ve had ~2.7% inflation over that time period. As for next tax year, I will aim for a similar number, under £20.5k would be ideal.

Savings Rate for the Year

Wow, 2017/2018 has been kind to me, achieving a savings rate of 81.7% according to my calculations. My method of calculating is to exclude taxes. Then funds put into my SIPP, ISA or taxable account are classified as savings, everything else is spending.

Show me the numbers

I am investing for the long haul; hence I’m not going to panic and sell at a dip in the market. I plan to ride out any crash by just buying as normal. And this philosophy was once again needed in March. My figures for March are:

  • Net Worth down to £680k
  • FIRE fund down to £430k
  • Which is 57% to the £750k target

Thoughts on the decreases

Grizzly Bear

Are we entering a bear market? We could be, but I’m not going to speculate or spend too much time on this. I know we have had a great run recently, and this must come to an end. I’m subscribed to the theory of the Random Walk of Wall Street; we will see variances, but the overall trend will go upwards.  So I’m happy investing each month as the market goes down.

And the pound has also strengthened after some progress on the brexit negotiations. Is this strengthening of the pound a good thing? In theory my investments have the same intrinsic value, but it does take a lot to see the pound value decrease but understand the value is the same.

Sequence of Returns Risk

It may be a bad thing to say, but given I am planning to FIRE in less than three years, I’d really appreciate a crash now when I am still working. I know market timing is bad, but I am secretly hoping this is a crash now, and a bull will resume in three years. As I’ve got more and more comfortable with my FIRE plans, including plan A, B, C etc the one unknown is sequence of returns. It’s the one risk there is not an easy way to mitigate, without significant extra cost.

Related Posts

Over to you

  • How about you?
  • How has March been for you personally?
  • And numbers wise?
  • Are you worried about the market volatility?

14 comments on “Net Worth and other updates – March 2018

  1. Similar to blogging, podcasting has a LOT of voices out there, but if you aren’t in it to make the big bucks, why not? As far as return risk, we are ~10 years from FI (and likely well more than that from true early retirement), so I’m not concerned with the day to day of the market.

    1. Hi Angela, yes the barrier to entry are tiny now for both blogging and podcasting, meaning loads of people half heatedly try. In true geeky fashion I’m doing an episode plan, and will think about it before committing. I listen to a fair few little podcasts, and they are rough around the edges but still enjoyable.

      And the market is expected to be unpredictable, so let’s see how it plays out.

  2. Are you aiming to live by the 3 or 4% rule? We are aiming first for 25 years of expenses first as a net worth and then for our passive income to be 150% of our expenses. This will allow for reinvestment during the good times, and draw down during the bad times. With your expenses you would only need 30k of divi income, which with typical divis being 3%ish you would need 900k….easily reachable for you…

    1. A good question, I’ve got an excel model and have played with several options. My withdrawal rate won’t be constant, and I can’t get my pension until 58 or whatever they change it to. Then my state pension at 68. I’m aiming to keep it as tax efficient as possible, and empty my taxable account first before hitting my ISAs. Hence I’m only aiming for 750k, to support a spend of 30k max.

  3. Wow, 81.7% is an AMAZING savings rate! With living & working in London you would be forgiven for spending more than £20k and allowing a little lifestyle inflation to creep in.

    Having a pension always muddies the water somewhat so a final overall £FIRE fund figure can be misleading, especially if your pension is DB.

    Are you including the state pension in your calculations? There are some FIRE bloggers (R.I.T being one) who purposefully exclude the SRP but it is potentially £8k pa of money that you may or may not need to save for. I can understand why someone under 40 may exclude the SRP (will politicians play around with it, make it means tested in the coming 30+ years) but doing so does create an additional savings burden.

    1. Thanks Tuppenny, I am very chuffed at the savings rate. Yeah, DB pensions make net worth calc more difficult, but then you won’t need to rely on 4% rules etc for that part. I’m all DC which makes it simpler in some regards.

      Yes, I’ve modelled the state pension in at £5k, as I’ve already got 20 years and £5k a year pension grandfathered after their recent changes. However I know politicians could change the rules again, so I don’t need the money, it’s more nice to have. I think they will keep raising the age rather than go for means testing, but you never know, we’ve got a long time frame.

    1. Yes, I take out the tax, as I have to pay that no matter what. But I know there are many different approaches you can take to calculate it.

      Yes, I’m geographically diversified, only 18% in the FTSE – mainly in the US and emerging markets.

  4. Congrats on another awesome savings rate.

    Good luck with your venture into podcasts – there might be a lot of US voices out there but not so many UK ones?

    1. Thanks Weenie. Not quite decided on the podcasts, am in a serious research mode at the moment. You are right that there seems to be an American dominance of podcasts, but then again it is a big country…

  5. That’s a fantastic savings rate! I am enjoying your British perspective on personal finance 🙂 or as Weenie says, the UK voice! March has not been great in terms of my investments, but some of my dividends DRIP-ped so I’m happy about that and like you say, it doesn’t bother me much since I’m investing for the long run.

What do you think?