October 2022 update ($701,515 +$41,544 or +6.3%)

↓ Emerging Markets Stock Index Fund is down by $4,622 or -4.1%
Grand total losses: $4,622 USD

↑ Eurozone Stock Index Fund is up by $8,387 or 7.9%
↑ US 500 Stock Index Fund is up by    $21,198 or 8.0%
↑ Global Small Cap Index is up by $9,734 or 8.1%
↑ Growth fund is up  767 or 1.3%
↑ EUR is up to USD by 2.1%, so for my portfolio its $4,519
↑ GBP is down to USD by 2.7%, so for my portfolio its $1,560
Grand total gains: $46,166 USD

Financial independence Portfolio expense ratio

The US government provided a lot of cheap money to the market.  This led Price to Earnings ratio for S&P500 returned back to 21.5, which is to 2% yield.  More over this is based on prior year earning for a lot of companies! In times like this portfolio expenses are one of the things to look at.

Properly measured, the average actively managed dollar must underperform the average passively managed dollar, net of costs. Empirical analyses that appear to refute this principle are guilty of improper measurement. All six of my investments are passively managed.

However, the financiers are always find a way to skim a little bit more. I decided to calculate, how much am I paying a year for my passive financial independence portfolio?

My funds charges:

	Charges, %	Annual charge, USD
Emerging Markets Stock Index Fund	0.23	256
Eurozone Stock Index Fund	0.12	126
U.S.500 Stock Index Fund	0.10	132
Global Small-Cap Index Fund	0.29	303
Growth Fund	0.259	129
Kids S&P500 funds	0.06	23
Total		969

Financial Independence change in the Net Worth over the past 7 years analysis

This is how my financial performance looked like over the course of the last 6 years and benchmarking my investment decisions against global stock markets:

Year	2013	2014	2015	2016	2017	2018	2019
End of the Year, $ K USD	298,429	288,608	295,536	387,831	482,266	432,089	575,086
Money invested (Do nothing)	298,429	318,105	332,356	413,899	508,617	528,940	549,690
Inflation adjusted U.S.*	394,553	361,145	336,942	462,739	619,649	501,911	722,293
S&P 500 benchmark**	394,553	467,612	488,316	627,481	859,178	835,597	1,118,724
DAX (Germany)**	374,528	404,317	457,382	570,485	708,560	599,216	772,167
FTSE (the UK)**	354,235	376,391	385,749	540,970	700,605	664,879	804,044

* If I invested in inflation protected US treasury bills

** Total return (market change and dividends reinvestment)

Financial Independence change in the Net Worth over the past 6 years analysis

This is how my financial performance looked like over the course of the last 6 years and benchmarking my investment decisions against global stock markets:

Year	2013	2014	2015	2016	2017	2018
End of the Year, $ K USD	298,429	288,608	295,536	387,831	482,266	432,089
Money invested (Do nothing)	298,429	318,105	332,356	413,899	508,617	528,940
Inflation adjusted U.S.*	299,282	322,877	337,740	418,038	519,298	540,048
S&P 500 benchmark**	394,553	470,275	491,211	640,340	895,521	869,044
DAX (Germany)**	374,528	404,848	459,332	578,196	724,056	608,157
FTSE (the UK)**	354,235	376,529	385,699	556,486	729,349	689,698

* If I invested in inflation protected US treasury bills

** Total return (market change and dividends reinvestment)

This is how my networth change last 9 years:

Financial independence portfolio performance review

I think that benchmarking, when used in the right context is a representative reflection of affairs, especially in finance where it is numbers game. I analyzed my portfolio performance and investment choices made.

These are better presented in a table (all sum of money is in thousands):

	2012	2013	2014	2015	2016	2017
Cumulative	21	140	202	215	303	303
Inflation adjusted	22	146	217	236	337	347
S&P500	23	173	265	280	412	440
Yearend value	20.7	141	169	167	316	304

Cumulative:              The invested money added up together.

Inflation adjusted:   The invested money adjusted for the inflation and added up together (as if I would have invested in Treasury Inflation Protected Securities aka TIPS).

S&P500:                     If I would invest money in S&P500 (commissions are not included).

Yearend value:          Value of my portfolio at the end of the year (including received dividends).

Here is the same information presented on a chart and “how and  why” this happened and what to do next.

2016 Financial Independence Goals ($387,831 +$92,295 or +31%)

Financial goals.

- Accumulate at least $24K a year. Stretched target - $50K.  – Partially complete. Accumulated approximately $ 38K.

- Portfolio should be able to generate $8,000 a year after taxes in the money of the day.  – Complete.  Without seeing end of the year result from some of the companies received $8 K after taxes.

- Develop additional income source in full, potential reward about $2,000 a year – Not achieved, although some measurable progress made.

- Less than 5% of portfolio in cash by end of the year and $350 K overall net worth in the money of the day – Partially achieved, portfolio $387 K but approximately 11% in cash.

 Blog:

- Regular monthly updates – Not achieved. (Missed September update).

- To cover 6 themes on financial independence -  Portfolio performance, Assets Allocation,  Energy stocks screening and Family budget. Missing one more theme.

- Publish easy tracker for the long-term portfolio performance – Not achieved.

 

Educational:

- Create list of books to read - 12 books are minimum. Not achieved. Read only two, not achieved.

- Read the books.

- Publish the books reviews – Not achieved.

 

Family Budget:

- Stay under $100,000 with the family expenses – Achieved. Spent $84K.

- Accumulate $7,000 towards durable goods replacement over 10 years – Achieved.

Be happy.  Run 1,000 miles during the year. Keep BMI below, target 26.6 (current 27.5)- Partially complete. Ran 1,022 miles but BMI is 27.4.

Real life portfolio performance 2015 and retrospective

2015 Values	Performance indicator		Comments
Absolute return	$, K	%	This is without taking into account accumulated $ 48 K
	-25	-9
Relative return	S&P 500, %	Portfolio, %	Exposure to emerging markets and energy sectors
	0.8	- 9
Cash accumulated in 2010 money	Planned $, K	Actual $, K	On target.
	48	48
Personal plan in 2010 money	Planned $, K 330	Actual $, K 244

The  target is not becoming currently achievable, as at the beginning of the year I have had only $244 K in 2010 money, so I had to reduce it for 2016, so it is realistic:

Year	2008	2010	2011	2012	2013	2014	2015	2016
Money of the day actual	153,400	119,800	165,600	226,800	298,400	288,608	295,536
Target						370,000		350,000
Inflation %		2	3.5	3	4	4	3	4
Cumulative inflation		1.02	1.06	1.09	1.13	1.18	1.21	1.26
2010 money	153,400	117,451	156,967	209,032	265,244	244,583	244,244	277,777

In another words if in 2010 you would have $ 10,000 and keep it, it worth $7,930 today.