April 2011 update

My goal for this year is to accumulate in savings - $ 40 K and invest them. So far I am on target - $ 14 K.

These are the results so far:

As you could see the only difference is in highly liquid assets - money. Investments in mutual funds, stocks and precious metals so far is a zero sum game - after three years.  At the end of the year there would be a question - where to invest?

I am keep reading and making notes of the books I read so far, and plan to publish my opinion and feedback on them.

Period 2009 -2010 August

Period  2009 -2010 August.

While I am still going to prepare what and how we did in the above mentioned period,  just to track  expenditure and spending habits. I am going to shift the focus from what we are doing towards my goal to financial independence. However, I started accumulating the content and did some basic analysis back in 2008.

Last year I invested all available resources into couple of properties in the apartment blocks that are currently being built.  Despite the fact that we paid 100% upfront in Russia it is a high risk investment, as there is not any guarantees or protection.  The reason for such step is not gaining any advantage, or additional rental income but to have some security against uncertainty.  Typically it takes 5-7 years in Russia from time money are invested, till you will have your keys, eventually.  

As an example - the apartment I bought is being erected  with original deadline in 2007. I invested my money in 2010 with verbal promises that it will be finished at the end of 2010 and all utilities connected and paperwork completed in 2011. In contract itself there is no any guarantees whatsoever. This is reality in Russia, the building company is among several behemoths with connections to the very top. Then again the apartments are bought as non-investment, for living.  In other words it was not procrastination of any kind, just diverting of my money elsewhere.

My A to B

Where I am now:  

Family budget comparison over three years 2007 through end 2010.

Non-inflation adjusted table:

 A few observations:

Child is growing and kindergarten fee is supposed to be lower, but they keep increasing fee annually, so really there is not much of a difference.

I joined a different project in my company and now medical insurance is provided covering the whole family free of charge, so we managed to save some money there. 

Percentage wise of the total:

 Note: Year 2007-2008 is a bit out of balance with the rest as we did not go on vacation that year. 

2009-2010 Family budget -US $65 K

Pictures tell thousand words, so I simply present all information in a table and a graph with some notes to them:

First of all I want to give a brief explanation of breakdown:

Accommodation – we have got no mortgage so we are renting a two-bedroom apartment.

Bills – all bills related to maintaining apartments – electricity, heating, land line phone, internet, etc..

Kindergarten  - we both work, so the child has to go to a kindergarten. Its  actually enjoys it quite a lot, to socialize with friends and be among kids of the same age.

Car insurance – speak to itself and everything related to car maintenance.

Miscell  -  gifts to relatives and friends,  haircuts,  cleaners and wax for our car, etc..

Drugs -  primarily mouth healthcare products, occasional prescriptions.

Medical insurance - speak to itself. It is provided be the employer, so we only have to pay co-pay, dental is not included.

Food – We separated our food from the child, as its primarily consumes organic only. We thought it would be a good start to build a strong foundation.

Child –  everything related to it – food, clothes, toys..

Gas – idea was to look how much to we spend on gasoline and how it weight in overall budget. I know that gas price affects other items as well, but we just thought it would be nice to count it separately.

Clothes, things - speak to itself.

Joy – occasional days away and vacations, it is also include all other expenditures – cinema, restaurants, parks, etc..

Home -  everything we need to buy to maintain our living in it.

Comms -  mobiles, phone cards.

Alcohol –  it is good to count, what we are spending on it. Apart from special occasions we tend to limit ourselves to $20 per bottle of wine max.

Year to year comparison 2007 -2009

Year to year comparison 2007 -2009

Percentage wise difference from 2007-2008 to 2008-2009:

Nominal values wise difference from 2007-2008 to 2008-2009:

 

A few comments which make easier to interpret the charts.

Investment Summary 2008 -2009

Investment Summary 2008 -2009 

One year later  (August 2009 summary):

- Savings: Accumulated more than $28 K USD for an investment ( which is 12.5% in  the currency I receive my salary in, but it is slightly below the  target in USD). I am under opinion that  Ruble is underestimated, so it does not cause a lot of concern to me, at the moment.
- Accommodation: As it tends to happen in Russia my building company is way behind it s big mouth promises and estimate time of new apartments handover is beginning of next year.
- I sent a request to re-invest my shares dividends s into buying more of those.
- Investment instrument is chosen and I became a bit more financially literate.

Investments in Bank of Moscow mutual funds:

 Short investment summary in mutal funds 2008-2009:

2007-2008 Family Budget

Family budget 2007 -2008

Family budget. As promised I want to publish a break down of our family budget for August 2007- August 2008 and later on I will compare it  with the one in August 2008 – August 2009.

First of all I want to give a brief explanation of breakdown:

Accommodation – we have got no mortgage so we are renting a two-bedroom apartment.

Bills – all bills related to maintaining apartments – electricity, heating, land line phone, internet, etc..

Kindergarten  - we both work, so with child has to go to a kindergarten. Its  actually enjoys it quite a lot, to socialize with friends and be among kinds same age.

Car insurance – speak to itself.

Miscell  -  gifts to relatives and friends,  haircuts,  cleaners and wax for our car, etc..

Drugs -  primarily mouth healthcare products, occasional prescriptions.

Medical insurance - speak to itself. It is provided be the employer, so we have only pay 200 a months, for a family coverage, dental is not included.

Food – We separated our food from the child, as its primarily consumes organic only. We thought it would be a good start to build a strong foundation.

Child –  everything related to it – food, clothes, toys..

Gasolin – idea was to look how much to we spend on gasoline and how it weight in overall budget. I know that gas price affects other items as well, but we just thought it would be nice to count it separately.

Clothes, things - speak to itself.

Entertainment, Books – occasional days away and vacations, it is also include all other expenditures – cinema, restaurants, parks, etc..

Home -  everything we need to buy to maintain our living in it.

Mobile, phone cards - speak to itself.

Alcohol –  it is good to count, what we are spending on it. Apart from special occasions we tend to limit ourselves to $20 per bottle of wine max. We quite a like in our  leaning towards wine, rather than spirits and beer.

We do not keep any special finance programme, just an Excel spread sheet.  It takes a bit of discipline to fill it after each purchase or at the end of the month, working with statement, but it worth it.

We spent nearly 62 K a year after taxes.  It will be easier to see it as a chart: