Thursday, December 31, 2015

2015 Financial Independence Goals ($295,536 +$22,649 or +8%)



Financial:
- Accumulate at least $48,000 (This is  $40,000 in 2010 money)  or $4,000 a month for investments during 2015, beginning  2016. – Complete. This has been done, $4,000 a month like a clock work.
- Portfolio should be able to generate   $9,000 a year after taxes in the money of the day  (In 2014 it was $7,500). Stretched target – $10,000.  NO. Actual dividends were $6,000 after taxes, which less  to the previous year. Two main reasons:
#1 I am sitting on a pile of cash, not investing them, i.e. not translating them into dividends (~ $100 K).
#2 USD is stronger, so the companies with operations outside US struggling to deliver performance.
Dividends for 2015:
S&P 500 Index fund ~ 740 USD after taxes or 1.7%
Emerging markets fund ~  500 USD after taxes or 3.5%
Rosneft ~ 250 USD after taxes or 3.3%
Gazprom ~ 4,500 USD after taxes or 4%
Average dividends 3% after taxes.

Sunday, December 27, 2015

December 2015 update ($295,536 -$7,218 or -2%)


↑ Accumulated $4,000 USD as part of my annual saving goal for December
↑ Received 4 additional Company shares for re-invested dividends ($0.47 USD per share before taxes or 5% annual dividends).
↑ Precious metals went up by $318 USD
↑ EUR appreciated to USD by 4% or $6,725 USD for my portfolio.
Grand total additions:  $11,044 USD

↓Emerging markets lost 6% or $763 USD
↓Vanguard S&P500 lost 2% or $1,049
↓ GazProm shares lost 12% or $12,720
↓ Company shares combined lost $1,264 USD or 8%
↓ Rosneft lost 14% or $1,224 USD
↓ iShares Core Dax lost 5% or $583
↓ GBP lost to USD 2% or $657 for my portfolio
Grand total losses:  US$  18,261

Tuesday, December 15, 2015

The U.S. Middle Class is Losing Ground

Pew Research Center recently published a very interesting report on what is happening to the middle class in the US.  The report itself freely available online is recommended for reading, however if you do not have time to go through all 74 pages of it, I will share my observations and reaction to it. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971.   
Financial Independence - Household income in the USA 2014 - http://www.niterainbow.com
        For the three person household the middle-income range was about $42,000 to $126,000 in 2014 dollars. Lower income households have incomes less than two thirds of the median and upper  income households have incomes that are more than double the median. Under this definition, the middle class made up 50% of the U.S. adult population in 2015, down from 61% in 1971.      In early 2015 120.8 million adults were in middle-income households, compared with 121.3 million in lower and upper-income households combined. Number of adults living in the middle income households has been steadily declining from 1971 to 2015.  As one commentator put it: American dream used to be a to own a house and two cars, new American dream it is to have a job. 

Friday, November 27, 2015

November 2015 update ($302,754 -$4,084 or -1%)

Accumulated $4,000 USD as part of my annual saving goal for September
iShares Core DAX are up by 404 USD
Grand total additions: US$  4,404 USD

Emerging markets ETF lost $223 USD
Gazprom shares lost $1,325 USD
Company shares combined lost $236 USD
British pound is lost to USD 3% over one month, for my portfolio it is $2,521 USD
EUR lost to USD or $3,721 USD
Precious metals lost $462 USD

Grand total losses:  US$  8,488

Sunday, November 15, 2015

Financial Independence Family Budget 2007 -2015. 2015 - $92,814 USD

       We have started our family budget, tracking all expenses back in 2007. Initially it was looked at as fairly cumbersome and time consuming exercise.  However, over the period of a few years we educated and trained ourselves to spend 5 minutes a day  in the evening to record all expenses.
       Now with the statistic we could more accurately predict and plan our expenses. It also  helps to clarify some fallacies and incorrect assumptions. For example, as a young parent when you look at nursery cost you think that over the period of time, as your child grows it will be cheaper. Our personal experience clearly tells that it is not happening, nurseries keep rising fees and even at “low inflation” you are lucky if you keep paying the same prize.  However, enough of that, let’s go directly to figures and who we spent $92,814  vs. previous 6 years.

Thursday, November 5, 2015

October 2015 update ($306,838 +$19987 or +7%)


 Accumulated $4,000 USD as part of my annual saving goal for September
Vanguard Emerging markets is up by $1,545 USD.
Vanguard S&P 500 is up by $4,435 USD
Gazprom shares are up by $13,160 USD
Company shares are up by $1,912 USD
Rosneft shares are up by $1,176 USD
iShares Core DAX are up by 1,209
GBP is up to USD slightly $604 USD
Grand total additions: US$  28,041 USD

Precious metals are down by $614 USD
EUR is continue to fall to USD $7,440
 Grand total losses:  US$  7,219

Saturday, September 26, 2015

September 2015 update ($286,850 -$11,560 or -4%)

Accumulated $4,000 USD as part of my annual saving goal for September
Vanguard Emerging markets quarterly dividends $194 USD or 6% at the current price.
Vanguard S&P 500 quarterly dividends $196 USD or 1.9% at the current price.
Vanguard Emerging markets shares are up by $3,025 USD
Grand total additions: US$  7,415 USD

Vanguard S&P 500 slid down another $740 USD
Company shares down collectively $1,340 USD
iShares Core DAX down $270 USD
Gazprom shares down $13,160
GBP down to USD $3,465 USD
  Grand total losses:  US$  18,975

Tuesday, September 1, 2015

August 2015 update ($298,404 +$ 8095 or +3%)



Accumulated $4,000 USD as part of my annual saving goal for July
Gazprom shares are up 1,320 USD
Gazprom annual dividends   4,542 USD  (USD 0.225 per share).
Rosneft annual  dividends  258 USD  ( USD 0.144 per share)
Precisious metals are up by 733 USD as investors are seeking safe harbor.
GBP is up to USD 2,420 USD
EUR is up to USD 3,284 USD
Grand total additions: US$  16,557 USD

Vanguard Emerging markets are down 5,115 USD
Vanguard S&P 500 collapsed 2,540 USD
Company shares down collectively 807 USD
  Grand total losses:  US$  8,462

Wednesday, August 5, 2015

The Undercover Economist strikes back by Tim Harford


            I recently finished reading “The Undercover economist strikes back” by an English writer Tim Harford. Tim has an education in economics from Oxford University.  Although not very well known outside England is quite popular in it, mainly as a columnist for Financial Times newspaper.
          Aim of the book was to bring macroeconomics a little bit closer to a non-economist in an entertaining fashion.  The book is written like a dialogue between the writer and reader, based on real life examples.  The way topics are presented it has a lot of similarities with  “Irrational Exuberance” by Robert J. Shiller.
          Modern economy for general public is increasingly focusing on psychology, how people react and behave. As example acceptance of the wages falling in real terms, while growing in nominal ones – “money illusion”.  Tom continues on about Bank of England commenting: “ Public trust in the pound is now maintained by the operation of monetary policy”, apparently with a totally straight face.   This basically means that most of modern currencies worth something as long as people believe in it.
          The worrying fact is being a influential economist in his own country the author is advocating having inflation at about 4%, this would help to maintain nominal growth of salaries about zero.

Monday, July 27, 2015

July 2015 update ($290,313 -$ 25,350 or -8%)



Accumulated $4,000 USD as part of my annual saving goal for July
Vanguard S&P500quaterly dividends 186 USD or 1,7% annual rate
Vanguard Emerging market dividends 99 USD or 2,6% annual rate
 Grand total additions: US$ 4,285 USD

Vanguard Emerging markets ETF lost 1,465 USD
Company shares lost 1,300 USD
Rosneft shares lost 1,750 USD
Gazprom shares lost 20,670 USD
Vanguard S&P500 lost 370 USD
Precious metals lost 990 USD
EUR lost to USD 1,940 USD
GBP lost to USD 1,150 USD
  Grand total losses:  US$ 29,635

Tuesday, June 30, 2015

Asset Diversification

Financial independence currency allocation:
Currency
October 2011
June 2012
February 2013
June 2015
December 2015*
EUR
26.5%
25%
13%
68%
93%
GBP
50%
41%
30%
29%
0%
RUB
21.6%
18%
14%
7%
7%
USD
1.9%
15%
43%
0%
0%
*Aspired
I wish I could have more direct exposure to USD, however Western European banks do not allow direct exposure to the USD. A lot of the EU brokerage firms excluding products trading on the US exchange rates  as these are non-AFM (Authority for the Financial Markets) registered investment funds. AFM. This is responsible for supervising business conduct, which focuses on providing:
- Orderly and transparent financial market processes;
- Transparency between market participants;
- Due care in the treatment of customers.
So they excluded Vanguard S&P 500 and Emerging markets sold in US on the USA exchanges. I think they are doing it to reduce US tax entanglements with these.
Many EU brokerage funds removed products listed on the stock exchanges in Israel, South Africa, New Zealand and Russia.

Wednesday, June 24, 2015

June 2015 update ($315,600 -$ 5,730 or -2%)

Accumulated $4,000 USD as part of my annual saving goal for June
EUR gained against USD $5,620
GBP gained against USD $1,000
 Grand total additions: US$ 10,620
  Vanguard Emerging market lost 970 USD
↓ Vanguard S&P 500 lost 1,240 USD
Company shares lost 390 USD
Rosneft shares lost 790
↓Gazprom shares lost 12,960 USD
  Grand total losses:  US$ 16,350

Tuesday, May 26, 2015

May 2015 update ($321,392 +$6,072 or +2%)

Accumulated $4,000 USD as part of my annual saving goal for May
Precious metals went up by $363
EUR gained against USD $2,098
GBP gained against USD $1,050
Grand total additions: US$ 7,511
Vanguard Emerging market lost 321 USD
Company shares lost 888 USD
Rosneft shares lost 224.7
  Grand total losses:  US$ 1,434

Friday, May 15, 2015

Energy Stocks Screening



Energy Prices forecast
Energy price forecast until 2020
* Brent Oil price
mcf - hundreds cubic feet (North America, Henry Hub).  Inflation assumed at 2% a year.
May 2015 Analysis major Oil and  Gas Companies stocks analysis:
Energy companies benchmark. Big Oil at glance.
* Gazprom has big exposure to one country only - Russia
** proposed

Tuesday, April 28, 2015

April 2015 update ($315,320 +$37,699 or +14%)



Accumulated $4,000 USD as part of my annual saving goal for March
Vanguard S&P500 is up $1,155
Vanguard Emerging markets is up $1,260
Gazprom shares are up $22,680
Company shares are up $580
Rosneft shares up $1,323
EUR is slightly up to USD $3,995
GBP is slightly up to USD  $2,706
Grand total additions: US$ 37,699

Tuesday, March 31, 2015

March 2015 update ($277,620 -$17,851 or -6%)



Accumulated $4,000 USD as part of my annual saving goal for March
Vanguard S&P500 is up $1,271
Vanguard Emerging markets is up $ 504
Received Q1 dividends Vanguard S&P500 $176 (after taxes)
Received Q1 dividends Vanguard Emerging markets $33 (after taxes)
Grand total additions: US$ 5,984

EUR is down to USD, lost $16,716
GBP is down to USD, lost 3,300
Gazprom shares lost $2,520
Company shares lost $523
Precious metals lost $776
Grand total losses:  US$ 23,835

Friday, February 13, 2015

February 2015 update ($295,471 +$22,583 or +8%)



Accumulated $4,000 USD as part of my annual saving goal for February
Received Q4 dividends for company shares $103
GBP is up against USD, gained $1,337
Vanguard Emerging markets is up $1,060
Vanguard S&P500 is up $2,382
Gazprom shares are up $13,600
Company shares are up $1,197
Rosneft shares are up $2,394
Precious metals are up $3,209
Grand total additions: US$ 29,282

EUR is down to USD, lost $6,699
Grand total losses:  US$6,699

Thursday, January 15, 2015

January 2015 update ($ 272,888 -$15,702 or - 5%)



Accumulated $4,000 USD as part of my annual saving goal for January
Invested additional 7,080 in the Company share plan and got the at 25% discount worth of $8,665
Received  $48 for Vanguard Emerging markets ETF and $179 for S&P500, which is roughly 1.5% each after taxes.
Vanguard S&P500 ETF gained $1,690
Vanguard emerging markets ETF gained $354
Grand total additions: US$ 14,936

EUR lost $10,050 towards USD. Year to year EUR lost 17%
GBP lost $2,293 towards USD. Year to year EUR lost 11%
Gazprom shares lost $11,330
Company shares lost $265
Rosneft shares lost $3,720
Gold lost $2,980
Grand total losses: US$ 30,638

Saturday, January 10, 2015

2015 Financial Independence Goals



Financial:
- Accumulate at least $48,000 (This is  $40,000 in 2010 money)  or $4,000 a month for investments during 2015, beginning  2016.
- Portfolio should be able to generate   $9,000 a year after taxes in the money of the day  (In 2014 it was $7,500). Stretched target – $10,000.
- Think about additional source of income.  My blog start bringing some measurable income but want to beef up with some streams.

Blog:
- Regular monthly updates
- To cover 6 themes on financial independence.
- Publish easy tracker for the long term portfolio performance.
I have no intentions to move towards an entertaining blog with 2-3 weekly posts.   I will endeavor my best efforts to stay on personal subject of financial independence and family budget.  

Educational:
-  Create list of books to read  & read them- 12 books is minimum.
-  Publish the books reviews.

Family Budget:
- Stay under $100,000 with the family expenses
- Accumulate $7,000 towards durable goods replacement over 10 years.

Be happy.  Run 1,000 miles during the year.