End of 2012 year update ($224,500 +$61,000 or +37%)

The portfolio changes:

↑ $55,600 were accumulated over the year and invested.  This exceeded annual goal of $40,000 with my annual bonus almost fully invested and some additional efforts were put in.  Otherwise the portfolio only gained 3% or $5,400 otherwise.

Primarily this was due to over exposure to cash & precisions metals.   This year I reduced exposure to cash from 74% to 54%, with stock market portfolio allocation went from 18.5% to 39.5% (next year 2013 I expect it will go up to 49% or even %55).

↑ Company shares are slowly going up, as I am reinvesting all the dividends into the new shares. Annual gain is $800.

↑ Keeping emergency fund into GBP, allowed me to gain almost $3,000 on the differences in exchange rate. Albeit from 2008 it lost almost $18,000 as GBP was stronger back then and this is without taking inflation into account.

- Mutual funds invested into emerging markets did not bring any gain this year (To be fair $300). I started wondering whether it is worth keeping money there. Since 2008 there has been loss of 7%, but the currency lost 30% of its value as well. Grand total loss over the last 4 years $9,600

↑ Precious metals gained $2,400 this year.

↓€ lost about 3% towards $ this year,  for my nest egg it meant $1,200 loss.

In time

          One of the most recent challenges i have is strong sense that i do not have time for anything, but even when i stand still it still running at ever increasing speed.

I think that the main contributing factor is number of responsibilities, non-value added things i involved in. It does clutter the life and takes away precisions moments when you could simply sit and dream.

            An analogue with personal finance is buying thing you can afford but do not need. Over the period of time their number grows and you do need to replace them. It eats up and limit the potential savings you could make.

Positive moment that i am so stressed about lack of time that i can work almost anywhere, when i have a moment to myself.

          On the other hand (to be brutally honest) i feel like i have not made any measurable progress in educating myself towards financial independence. The savings have been made do not count, as i always been pretty careful (scared do not have money). Yet again i spent  perhaps 2000 hours blogging, reading and commenting on the posts. It gave me a unique insight into personal finances but sometimes i wish i spent that time reading books and learned fundamentals about modern economy.

        What i understood that for the most of the people financial independence is a challenge  and life long process with no silver bullet. Some of us on a higher salary or (and) with no kids achieve better results but with the real returns of 3-5% on the investment  one cannot expect an early exit.

November 2012 update (224,500 +20,100 or +9%)

It has to be highlighted that the change is for the last 3 months, rather than one.

The portfolio changes:

↑ Accumulate additional $17,100 as part of my annual savings plan (just slightly over three months worth of savings)

↓ The stocks went down by €1,500

↓Mutual funds went down by  $100

↑ $ is weaker towards €, £ and RUB the additional gain from those currencies overweight the stock market losses.

Family budget comparison 2008 – 2012 ..after the relocation.

We had to move last year and relocated to a more expensive area.  Evidently we spent $ 16K more.

As new place of residence  and more expensive area,  I averaged our three previous 3 years of expenses, when we lived in the same environment.  

Non-inflation adjusted table:

Family budget 2012 - $81 K – above the budget $65K

Our 2012 family budget per category: 

House rent	Bills	Nursery	Car insurance	Miscell	Drugs	Medical insur.	Food	Kids	Gas	Clothes	Joy	Home	Mobile	Alcohol	Total
24,900	8,300	4,200	3,800	1,300	500	1,200	12,000	4,700	1,300	600	13,600	3,400	300	1,200	81,300	2012
2,075	695	350	317	108	42	100	1,000	392	108	50	1,133	283	25	100	6,775	Monthly
31	10	5	5	2	1	1	15	6	2	1	17	4	0	1	100%	100%

 

 Percentage wise among the categories our family budget for 2012:

 Bills

Last year we consumed:

		Paid Total $	Per Unit $
Electricity (kWh)	2371	620	0.26
Natural gas  ft3 (m3)	75,300 (~2033)	2390	0.031 (1.00)

By the sounds of it I need to look closer at my utilities company shares, as the end consumer prices are almost three times higher for what Gazprom sells it in continental Europe.  The expenditures are next to nothing – only distribution network and sales department.

In overall the year was rather expensive, while I feel that we maintained almost the same lifestyle, apart from the trip to an exotic destination.

In the next post I will try to compare our 2012 family budget with the four previous years.