Bankai's Journal

Where are you and where are you going?
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Bankai
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Joined: Fri Jul 25, 2014 5:28 am

Re: Bankai's Journal

Post by Bankai »

I assume paid off mortgage when calculating how big the stash needs to be. So it's half of the value of our flat plus 28x the average of all other expenses from last 24 months (for 3.5% wr).

fingeek
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Joined: Wed May 24, 2017 8:16 am
Location: Wales

Re: Bankai's Journal

Post by fingeek »

Interesting... Do you also take into consideration the likelihood of downsizing when older and releasing a bit of equity? I've recently added 10% of house equity into net worth with this reasoning

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Bankai
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Re: Bankai's Journal

Post by Bankai »

Yeah, especially considering that we don't plan having children and so leaving inheritance won't be a priority. But I see it more as one of the backups in case plan A (28x expenses & paid off property) fails, along with cutting expenses, state pension, renting out spare bedroom & possibly receiving inheritance.

Speaking of cutting expenses, here's our spending divided into needs and wants. On average, 25% of our spending is on wants, so there's some scope to trim if needed, but it's pretty tight already (this will change once mortgage is paid off as needs will go way down):

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OK here's the same chart excluding mortgage payments - looks better with wants at 35% so much more scope to chop if big bad bear comes:

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mountainFrugal
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Joined: Fri May 07, 2021 2:26 pm

Re: Bankai's Journal

Post by mountainFrugal »

I really like this visualization! Thank you for sharing. I will do something similar for my expenses going forward. It is really cool to see it over this time frame.

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Bankai
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Q2 2021 update

Post by Bankai »

1) Health

Roughly on track - eating healthy and exercising almost daily, although as I'm currently on holiday I did have some sweets, as well as some alcohol over last few weeks. Planning to go back to more strict routine once I'm back to work.

I also went on a full day hike few times lately. I really enjoy wandering around in highlands with barely any other humans in sight.

2) Relationships

After many conversations with DW she finally quit her work in public sector. Since then her recovery is gathering pace, although it's still likely to be a few months before she's in shape for longer trips/looking for a job etc. The last few months were hard both for her for obvious reasons, and for me as I was stressing about her health and our future. Multiple years of expenses saved helped to an extent, but it's still a stark reminder that money is nothing without health. Fortunatelly, as DW's recovery progresses, my stress levels go down.

I'm playing board games (online) weekly with a group of friends. Other that that, DW, work and occasional hike with a friend, I don't have much contact with other people.

3) Work

The bigger the stash, the lower the motivation. Very nice weather over last few weeks doesn't help either. On the other hand, rationally I realise it's a good job, fully remote, with above average pay and good boss/coworkers, so there's really nothing to be unhappy about, other than the fact of having to work. Still on track to close 'work' chapter within the next 2 years, although it depends on what income will DW be able to generate.

4) Time allocation

Continue my daily reading about investing and I'm getting a better idea of how I want to structure my portfolio.

DW thinks I need some hobbies for pure pleasure/stress reduction. I'm not sure I'm able to have a 'hobby' - the problem is if I like something, I tend to go all in, and if I don't, I don't want to spend any time on it. Whereas the idea of a hobby assumes spending some time here and there. Seems too causal for me - I'm more of a 'all or nothing' type of person.

5) Money

Expenses in Q2 were £3,396 or £1,698 per person (1.07 JAFI annualised). Excluding capital part of mortgage payments, expenses were £2,736 or £1,368 per person (0.86 JAFI annualised). There were no unusual expenses; alcohol, eating out and clothing picked up somewhat as places reopened.

SR: 84.5%. Individual SR won't be relevant going forward as I'm the only earner currently, so will be covering full household expenses. Household SR should be c. 65-70%.

NW: £181.2k (+12%). Ridiculous growth continues - NW grew twice as much as my post-tax earnings in Q2. Most of that was due to investments as growth stocks resumed their, well, growth. I also updated the value of our flat to reflect RE inflation since the start of pandemics. Buying this flat was by far out best financial decision so far, with over 150% profit on our deposit in 3.5 years (compared to renting).

As I'm getting closer to my number, I'm allocating less to growth and more to 'neutral' (world index) and alternatives. Soon I'll also start building positions in gold and cash. I'm also seriously considering a tiny allocation to BTC & ETH - price is well off recent peaks and appears to be consolidating, which is usually not the worst time to enter.

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fingeek
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Joined: Wed May 24, 2017 8:16 am
Location: Wales

Re: Bankai's Journal

Post by fingeek »

"All or nothing" with new hobbies, or should I say, obsessions! Yep, guilty here too... Nice progress!

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