2021 Financial Independence Goals

 Having a blog is fun thing to do. You can write about your favorite subjects, or anything really.  Your blog keeps memory of your thoughts, ideas, memories, goals.  I can also review what I promised. I have been consistent on meeting my financial savings and investments but not so much on development, which I am convinced is the key.

 

Looking at my income stream and assuming it will remain the same I need another 15-20 years before I can reach the financial independence.  While it is quite a long time away one of my real concerns is to get ready for the second life – what to do, hence the development is important. Quarantine time gave me insight into spending time at home.

So how can I make my goals achievable? I think that I need to scale back. If I can do more -great.

 

Financial goals:

a. Save 20% on the income - Accumulate $25 K a year.

b. Chose where to invest it and when.

 

Blog:

a. Regular monthly updates.

b. To cover 6 themes on financial independence.  

 

Educational:

a. Read 3 books from the list.

b. Publish the books reviews.

c. Corporate finances to study in detail.

 

- Be happy.  Run 600 miles during the year. BMI at 26.3 by December. Loose 2.5 pounds a month.

 

What are your 2021 goals? Is it something you recommend I do more or stop doing?

2020 Financial Independence Goals review

 This extraordinary year came to the end.  My portfolio went up by 15%.

Financial goals:

- Save 20% on the income - Accumulate $25 K a year and invest it either in one of the existing funds or new one. – This goal is only partially complete. I accumulated $24 K but not invested. The markets are all time high, so it is no point to invest it now. I have not selected where I want to invest them.

 

Portfolio:

- Develop additional income source in full, potential reward about $2,000 a year. Target sites to be developed in full this year.  This is “make it or break it”. If I am not able to do this year, I will wind down niche sites and focus elsewhere.  My personal preference is to make it, despite disproportionate amount of time I might spent. – This did not happen. The main financial independence site generated some income. However, combined niche sites did not reach $2K a year. I need to re-focus the time elsewhere.

 

Blog:

- Regular monthly updates. – This complete.

- To cover 6 themes on financial independence, including mortgage one.  –  This goal is complete. Networth change past 10 years,  Mutual funds spreading, The rich vs. Poor, Junior ISA, Market Charges, Dividend Aristocrats,  Four percent rule.

 

Educational:

- Read 12 books from the list.  – Read only two. One of them is Enough by John Bogle.

- Publish the books reviews.  – Complete for the books that I read.

- Corporate finances to study in detail. – This did not occur.

 

- Be happy.  Run 1,000 miles during the year. BMI at 26.3 by December. Loose 2.5 pounds a month. – Ran only 240 miles. I thought that last year with 253 miles the lowest possible one.

 

What are your 2020 goals? Is it something you recommend I do more or stop doing?

 I need to think how to make this year goals smarter and to make sure that I will complete them.  How was your year and the goals achievements?

December 2020 update ($684,298 +$32,954 or +%5.1)

↑ Financial independence savings for last month $2,000

↑ Emerging Markets Stock Index Fund is up by $6,430 or +4.4%

↑ Eurozone Stock Index Fund is up by $2,160 or +1.6%

↑ US 500 Stock Index Fund is up by $3,588 or +2.3%

↑ Global Small Cap Index is up by $9,162 or +6.9%

↑ Fidelity Growth Fund is up by $998 or +1.7%

↑ EUR is up to USD by $7,237 or 2.5% for my portfolio

↑ GBP is up to USD by $1,379 or 2.3% for my portfolio

Grand total additions: $32,954 USD

Funny Life

 In the UK the government made retirement (especially for women, minorities and naturalized citizens) an impossible and unaffordable dream.  The new pension age to receive meager state pension is 66 years old and its less than a third of an average salary.   To get this “full pension” you need to work for 35 years. The pension is $1,000 a month.

 There is an expression “smoke and mirrors”.  This means the obscuring or embellishing of the truth of a situation with misleading or irrelevant information. The Black Lives Matter, climate change, transgender issues and the rest are there to distract attention from real issues, injustice and discrimination in everyday life.

 A colleague of mine is about to retire (at the age of 55), after working for the same company for 30 years.  As he worked part of his career abroad (for about 18 years), he has two pensions.  The pension for the time abroad is worth $1.7 million and you could take it as tax free lump sum.  The other is worth $1.7 million too but subject to taxes, should he withdraw it as a lump sum.

According to the pension fund conditions, the second $1.7 million pension, should he leave it in the fund, will generate $50K a year taxable, inflation adjusted pension for life.  This is an independent confirmation of my four percent rule review. 

 I am working for the same company. We worked together on two projects in to different countries, as expatriates. I actually progressed faster than him, by approximately 6 years.  The truly illuminating detail that my pension will be zero with the same company. The reason?  We have different nationalities, so when we work on the same project and in the same role the employment conditions are different.  This is hidden truth that will never be published or discussed, as this is how western system is all built and functions to this date. 

The funny part? Having zero pension contributions is not considered an employing advantage, as “non-core” nationalities are perceived as inferior.  Such behavior is revealing in its hypocrisy.

I actually have to take money out of my paycheck to make my savings for the retirement. The paycheck is lower too for doing the same job. I will be very lucky to have half of his pension as taxable and ten years later (65 years) at the current savings rate. 

 It is clear that discrimination and exploitation is integral to the UK and EU economy nowadays, like the slavery was for more than a century, with proceeds enjoyed at home and misery parked offshore.

 Fun fact: The richest 1 per cent of humanity is responsible for over 15 percent of all emissions between 1990 and 2015, while the richest 10 per cent were responsible for 52 per cent. While the poor will pay for the greenhouses gases emissions transition.

November 2020 update ($651,344 +$75,923 or +%13.2)

↑ Financial independence savings for last month $2,000

↑ Emerging Markets Stock Index Fund is up by $8,498 or +6.3%

↑ Eurozone Stock Index Fund is up by $18,738 or +17.1%

↑ US 500 Stock Index Fund is up by $15,535 or +10.9%

↑ Global Small Cap Index is up by $17,618 or +15.3%

↑ Fidelity Growth Fund is up by $5,157 or +9.7%

↑ EUR is up to USD by $7,021 or 2.9% for my portfolio

↑ GBP is up to USD by $1,357 or 2.3% for my portfolio

Grand total additions: $75,923 USD

 

Pandemic raid

I read the other day a puff piece sponsored by Swiss finance industry. It was about them attracting ultra-rich clients.  Its understood, that Swiss are desperate to restore some appearance of credibility after they rat out their clients under so-called “The swiss bank program”. In short, the program allowed for Swiss banks to avoid criminal prosecution in exchange for the disclosure of all of its U.S.-related accounts that were open at each bank between August 1, 2008, and December 31, 2014.

The piece presented the ugly truth, that this time the rich lobbied quick and hard the western governments. The markets were flooded with liquidity at the first sign of the pandemic, with very little places to go but the stock market. As the result, asset prices across financial markets have held up very well.

While the global economy is going to contract by 4.4. percent (8% in the USA, 10% in the UK, 6% in Russia and China will grow by 2.7%).

The billionaires grew richer, as they could afford to hold to their investments and even poured in more money during the crisis.  Any pre-pandemic worries about wild evaluations of the technology stocks were washed away.  The main growth in stocks was in Technology and Health Industries. Equities price to earnings ratio is now 33 for Facebook, 34 for Google, 36 for Apple, 92 for Amazon, 800 for Tesla. This is much higher the historical average, which was mostly between 10 and 20.

Amazon chief executive Jeff Bezos net worth grew by $73bn between mid-March and mid-September. The EU is unable to adequately respond to the pandemic and going into second lockdown. Jeff's net worth expected to grow further. Tesla and Facebook chief executives (Elon Musk and Mark Zuckerberg) each have $45bn more. 

There has been an enormous wealth transfer from the poor to the rich via injection and direct contracts to selected companies by the governments in West.

 On much small scale I benefited a little bit too.  I invested in the each of kids' college accounts $17K in April 2020 it has grown by 20% now.  The fact is that the poor and middle class will pay higher taxes once they are back to their jobs.   

 

 Emotions cost the investors’ money.

Family budget 2020 – Family budget over last 12 years.

 This is 12^th year we are keeping our family budget formally, recording every expense and trying to make sense of it all at the end of the year. 

Overall:

The expenses this year exclude a one-off house redecoration - $60K. This is fence around the house, internal doors, wardrobes and hallway parquet replacement, repainting the walls and ceilings.  The house is a typical one for the UK of approximately 1,700 square feet.  Previous once were 60 years old, I think.  These are not registered on the expenses but something to take into account.  I think its reasonable to assume that you need to put aside at least $3K a year on the house long term maintenance. This day will come sooner or later.