November & December 2018 Review

Hello all and apologies for my absence, I don’t really know where the last two months went. I wanted to get through the monthly posts quicker so I have more time for my end of year review and some other posts I’ve been thinking about writing, so I’ve combined November and December into one post. Actually in 2019 I’m thinking of just doing a quarterly review, because monthly reviews seem very frequent, and to be honest it’s getting a bit repetitive. I want to write about more interesting random topics, and looking at the stats for my most popular posts over the last year it seems my readers do to!

November and December

So what happened in Wephway’s World?

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Party on!

In November we had a house party, a cocktail party no less, and I think we actually broke everyone. I’m actually a little bit proud of what we achieved, among the cocktails were mojitos, espresso martinis, white russians, and exploding orgasms. There was champagne, and beer pong (it turns out we’re all really bad at beer pong), and also table football. God knows what the neighbours must have thought. My cat was not impressed.

Also in November my girlfriend and I celebrated our one-year anniversary by going to an Italian tapas style restaurant in Northampton. Which was lovely.

Financially speaking November wasn’t great – I had to spend another £500 on repairing my car. I also splashed out on a Nintendo Switch – once I’d bought a couple of games and two extra controllers it cost about £400. And the Christmas spending began as well.

In December the partying continued, including four Christmas nights out with various different people. By the time we went to visit my family I was glad for the break from alcohol to be honest. I’m not really that much of a drinker, though my posts on here probably make me sound like one.

Christmas was great, my nephew is growing up really fast and my sister is due another in January (edit: baby number 2 was born on the 6th Jan, all are doing well). My family have all now gone vegetarian which is amazing, especially as I’m not the odd one out anymore and it means we can all plan and eat the same dinner together.

And then after Christmas it was my birthday, closely followed by my girlfriend’s birthday (we’re only two days apart). We went to a spa hotel for an evening and a day, which included a jacuzzi, massages, and breakfast, lunch and dinner. We tried some ice skating, and then we went out in Bedford on the 29th. And then of course there was NYE, a (thankfully) relatively quiet affair this year with some board games and pizza.

Financially December was another heavy month what with all the food and drink and travel and hotels. I also had to pay my car tax, and there was the little matter of my £2325 self assessment tax payment. Ouch. In 2019 I’m thinking of spreading the self assessment tax payment over 12 months – not literally, I’ll still only pay it at the end of the year, but I want to split it into 12 on my spreadsheet so that my month-to-month savings rates are more accurate.

One other thing to note, I finalised the remortgage of my main house in December. This means I’ve now recently remortgaged both houses, one with a 2.55% five-year fix, and the other with a 1.94% five-year fix (the first is higher because it’s for a House of Multiple Occupancy which are typically considered more risky by lenders). I’m really happy to have got both of these sorted out this year, especially for such a long fix. Hopefully five years will cover any major shocks (such as Brexit). I can’t see how interest rates could go much lower really, but I could see them increasing significantly in the near future.

So how did my spending pan out in November and December?

November Spending:

  • Mobile phone – £7.50
  • Imputed rent – £550  – I own my house (with a mortgage) but I pay myself rent. I don’t actually move any money around, but for the purposes of my spreadsheet and my savings rate I treat my house as though it were a rental property and I am a tenant in it.
  • Food, drinks, toiletries – £204.27
  • Eating/drinking out, takeaways – £248.93
  • Petrol/travel – £84.20
  • Car expenses (insurance, repairs etc) – £512.83
  • Gym/Sports – £30
  • Music/gigs/cinema – £0
  • Cash Withdrawals – £30
  • Miscellaneous – £712.12 – mostly the Nintendo Switch and Christmas shopping
  • Bank charge – Negative £2  – ie they paid me.

Total: £2377.85

December Spending:

  • Mobile phone – £7.50
  • Imputed rent – £550
  • Food, drinks, toiletries – £203.51
  • Eating/drinking out, takeaways – £236.13
  • Petrol/travel – £242.26
  • Car expenses (insurance, repairs etc) – £290
  • Gym/Sports – £30
  • Music/gigs/cinema – £0
  • Cash Withdrawals – £21
  • Miscellaneous – £503.64 – As above
  • Bank charge – Negative £6.68  – ie they paid me.

Total: £2077.36

November Income:

I split out my income into active and passive – passive is basically my rental income, active is everything else.

  • Salary (after pension/sharesave removed) – £2289.50
  • Pension payment – £899.16 – I put in 6%, my employer puts in 20%
  • Sharesave – £250
  • Matched betting – £0
  • Rental Income (after bills, expenses, council tax and mortgage interest removed) – £1194.69

Total Active Income = £3438.66

Total Passive Income = £1194.69

December Income:

  • Salary (after pension/sharesave removed) – £2589.50
  • Pension payment – £899.16 – I put in 6%, my employer puts in 20%
  • Sharesave – £250
  • Matched betting – £0
  • Rental Income (after bills, expenses, council tax and mortgage interest removed) – £1574.36.
  • Self Assessment Tax Return – negative £2325.40

Total Active Income = £3738.66

Total Passive Income = negative £751.04 – The negative amount here is because I’ve taken the self assessment tax payment of £2325 off.

November and December Savings Rates

I work out my savings rate by using passive income as an expense reducer. So for November my spending was £2377.85 minus £1194.69 which equals £1183.16. As my active income was £3438.66 and my spending was £1183.16 that makes my savings rate for November 65.6%. For December it was much lower (due to the tax payment) at 24.4%.

See my earlier posts here and here if you want a bit more explanation on how I work out my savings rate.

Here is my month to month and year to date savings rate:

srdec18

Unfortunately that big dip at the end of the year reduced my savings rate for the year to 64.38%. Which is not bad really but not at my 70% target. I’ll be doing an end-of-year review soon to look at these figures in more depth, but overall I’m not too unhappy, I had a fun year with trips to Thailand, France, Germany, Italy, and New York. I also beat last year’s savings rate of 58% quite comfortably.

My Net Worth Tracker

My net worth increased in November from £235,316.04 to £244,745.21, a big increase of £9,429.17, and then reduced a little in December to £242,742.42, a decrease of £2,002.79. This is based on the estimated values of my properties minus my debts (mortgage/loans etc), plus my savings, plus my investment accounts (including pension) and the total of my bank balances.

Over the two months then I’ve seen about a £7.4k increase in my net worth. About £2.2k of this increase is thanks to me saving my income (well, not spending it all is perhaps a better way of putting it), and about £5.2k of the increase is thanks to increases in the value of my assets.

Since this time last year I estimate my net worth has increased by £43,380.87. Here’s a lovely graph to show how my net worth has increased since September 2012:

nwdec2018

For the first time I’ve crossed the £240k net worth milestone. Why is that a milestone? Because at a 4% safe withdrawal rate I could take out £10k on average and not be any poorer, in theory at least. When I first began on this journey to FIRE I thought £10k would be enough to retire on (how naive I was), and though my goals have changed significantly it still feels good knowing I’ve reached that initial goal. Interestingly, my passive income for this year after taxes and interest are removed was £10.7k, just over that 4% figure, though that is based purely on my property income (remember I treat my main residence as a rental property for the sake of working out my passive income).

(Edit: I’ve just realised 4% of £240k is only £9,600… how could I have made that mistake?! Just shows how naive I was at the start of this journey.)

Anyway as I say I’ll be doing a more in-depth review for 2018 in the near future, so for now at least, happy new year everyone!

Wephway

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