Tuesday, January 2, 2024

December 2023 Financial independence update ($875,469 +$40,181 or +%4.8)

↑ Emerging Markets Stock Index Fund is up by $3,257 or +2.9%
↑ Eurozone Stock Index Fund is up by $5,102 or +3.3%
↑ US 500 Stock Index Fund is up by $18,092 or +5.4%
↑ Global Small Cap is up by $12,669 or +8.9%
↑ Growth fund is up by $1,060 or +1.5%
Total gains: $40,181


December 2023 Financial independence update


Overall economy.  Consumers are shifting more of their spending to so-called buy now, pay later lenders, a trend that is only accelerating as high interest rates dent budgets and pandemic savings dry up. That is sounding alarms at consumer-advocacy groups that say companies like Afterpay, Affirm AFRM -1.16%decrease; red down pointing triangle and Klarna provide fewer protections than credit cards and encourage shoppers to take on more debt than they can afford. Afterpay doesn’t report to Equifax.

A quarter of all American adult consumers have used buy now, pay later loans. Over Black Friday and Cyber Week, such payment plans accounted for 7.2% of all online sales, a 25% jump from last year.

Many people who plan to work until full retirement age fail to reach that goal. A 2023 study by the Employee Benefit Research Institute shows 35% of people surveyed said they retired earlier because of a health problem or disability, while 38% said it was to care for a spouse or family member.

Personal. For me the last year has been financially beneficial.   Since I shifted my invested to passive mutual funds 7 years ago, here are their annualised performance today:


Average growth per year (%) past 7 years

Vanguard Emerging Markets


Vanguard Eurozone


Vanguard US 500


Vanguard Global Small Cap


Although seven years is a short horizon but there is no question about 7% return, even with the last bull year, its more about 6.5% average for all four funds combined. I have rebalanced my portfolio by investing $120 K  in S&P500 in  March 2022. Assuming that S&P500 will continue to outperform other funds, I can get my 7% return or 3% real term return (adjusted for inflation).  If I can wait for 10 years it will grow to $1.2 MM, after 20 years without any additional contributions, I can expect ~ $1.6 MM nest egg in today’s money.  With annual $12K contribution it will grow to $1.9 MM.

How was your 2023 performance?



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