Wednesday, December 21, 2011

End of 2011 - Period 2010-2011 ($ 165,000, +$45,000)

Financial goal:
- In the overall  the only changes were the additional savings and some fluctuation due to the fact that the assets are held in four different currencies.
- At the current inflation rate and the administration fees  combined around 5%,  it is very much uncertain how to get to my point B. My original goal was to have $ 2 million.
Inflation adjustments -two observations:
- Financial independence goal review. I should either to adjust for  inflation my nest egg or the financial independence goal, i.e. it should go to $ 2.1 million.
- Beyond financial independence. The invested money will earn at equal or just above the inflation rate,  the returns (annual income) will start depreciate immediately.

Let's say you have returns $60,000 in 2010 and at average inflation rate of 5% in 20 years time you will get only $ 23,000 annually inflation adjusted. To keep your capital protected - you need constantly top it up to protect against inflation.

- My original intention was to update this blog on the monthly basis. Although there is just under 20 posts this year , it did not occur on regular basis.
- The main benefit  has been  reading other people blogs, while received very limited feedback on mine.  It is OK, as main investment moves will start next year and I am for the long run here.

-  I was concentrating on getting my second masters degree, which I finally received with distinction. However I have not read all the book I was planning to.
-  I have invested nearly  1000 additional hours over last 16 months and got promoted...with increase of $2,000 a year.  It will take me 5 years to pay back at McDonalds entry salary level, however every little helps and I have no regrets. If I would just sit on my ass - there would be nothing.

Family Budget:
We did not manage to stay on the budget this year -$71,000 but started making contributions towards our 10 years durables goods list - $7,000 a year to replace what we have own already - maintenance fee.
The investments haven't produced any meaningful growth, so I have no regrets spending $ 4,500 on our trip to California. Life is a collection of experiences and that was one of them.

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