Thursday, February 7, 2019

January 2019 update ($480,872 +$40,797 or +%9.3)

↑ Emerging Markets Stock Index Fund is up by $8,716 or +7.7%
↑ Eurozone Stock Index Fund is up by $6,415 or +6.3%
↑ US 500 Stock Index Fund is up by $8,521 or +8.0%
↑ Global Small Cap Index is up by $10,080 or +10.3%
↑ Vanguard FTSE U.K. All Share Index is up by $4,112 or +5.0%
↑ EUR is slightly up to USD by $2,027  or 1.0%
↑ GBP to USD is slightly up by $926 or +4.0%
Grand total additions: $40,797
Financial Independence - -

Reliable (conservative) economy forecasting. By law in the UK the pension funds should issue annual benefit statements. Those present a conservative forecast based on the available information.
I received mine recently (from one of the leading banks) where the provider assumes 5.25% annual growth, 2.5 % inflation and 1.25% charges.  This essentially leaves you with 1.75% annual growth.  At such rate for every $100 invested one will get $141 after 20 years  growth or $168  after 30. The money invested closer to the retirement date will attract lesser multiplication factor ($118 after 10 years).
As you could see from the past 12 months rolling period the USA lost 3% for S&P500 and 8% for the Global Small Cap (57% are the USA stocks, and 13% Japan, UK + Canada + Australia another 13% combined).
Europe zone lost 10% over the same period.

Looking at the past 5 years EU and the UK are shadowing USA but consistently lagging in the performance:
Comparison on S&P500 vs. FTSE 100 and Eurozone Stock indexes
This is mainly attributed to continuous engaging in politicking instead of forging economic ties with its neighbors and highly bureaucratic and occasionally corrupt business environment (China is actually mirroring the USA).

Savings increase. First step to bring it to 20%.
    I previously mentioned that my company was evading to pay into mandatory pension scheme (introduced in 2012) contributions for non UK citizens using creative employment set up. This has now stopped, as the government intervened (the law is 5 years old).  In the scheme the main load is on employees (starting from April employee pays 5% and employer 3% of $52,000).
    I am going to take the deal, in spite that I am already paying 8% into a private pension scheme myself.  This will mean receiving $1,500 matching contributions from the employer and stretch my savings target by another $2,500 annually, bringing total savings to 10% into the private pension.
   This should bring my total monthly contributions to the pension funds to $1,450 from current $950 (the taxman returns income taxes directly to the account). Additional bonus is the previous couple of years missed contributions will be paid in as well.
If I would have the same rights as a local employee  my monthly contributions would be  $4,200. This is because the employer choose to pay the UK citizens 20% of their overall salary, while non-citizens get 3% of 52,000. This is Western Europe and such practices are legal here.  It is still move in the right direction as I will get some extra money from the employer and contribute some more myself. 


  1. January saw a nice bounce from those nasty lows in Dec. in almost every market. Keep that savings rate as high you can and stay invested!

    1. Hello DivHut,

      Thank you for stopping by. You are right the January was a reminder, that the stock market is very volotile i the short term. I want to increase the savings rate from about $20 K to about $28 K or 25% of annual after tax income.
      How do you motivate yourself to keep saving and delay the gratification?