Egg's journal

Where are you and where are you going?
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Egg
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Re: Egg's journal

Post by Egg »

This month has definitely been cheaper - single living has meant less eating out, and I've pretty much just been keeping my head down at work. Full post-match analysis to follow when the month has come to a close.
Last edited by Egg on Wed Feb 25, 2015 3:21 pm, edited 1 time in total.

Rural Kiwi
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Re: Egg's journal

Post by Rural Kiwi »

What do you think is the root cause of these insecurities? I know how it feels to be caught in a downward spiral of negative thoughts caused by too much time spent thinking introspectively while inactive. I try to snap out of it by increasing activity on another topic, then come back at a later stage to try analyse with a more logical thought process to why I felt so insecure. Then make necessary changes

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Egg
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Re: Egg's journal

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Rural Kiwi wrote:What do you think is the root cause of these insecurities? I know how it feels to be caught in a downward spiral of negative thoughts caused by too much time spent thinking introspectively while inactive. I try to snap out of it by increasing activity on another topic, then come back at a later stage to try analyse with a more logical thought process to why I felt so insecure. Then make necessary changes
It's hard to pin them down. I could try to rationalise it, but I think psychology is a complex thing which is the product of so many different factors that it would be reductive to explain it through a handful of experiences. You're right, though, that insecurities come about about only when the mind is given enough time to introspect them into being. On the other hand, I think it is actually quite reasonable, if unappealing, to distrust people. That is perhaps what makes such thought difficult to reason away.

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Egg
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Post by Egg »

Alright. Self indulgent wallowing done for the moment. A busy week of...amorous activities...has sorted me out. Back to the task in hand. How did I do in January?

January

Income - £2250

Salary - £2250

Expenditure - £850

Bank account subscription fee - £10
Mobile contract (final payment!) - £30
Bike - £50
Hotel - £30
Cinema - £15
Eating/drinking out - £250
Food - £210
Accommodation charges - £105
Self-storage unit (final payment!) - £70
Transport - £80

Savings rate: 62%

The savings rate is slowly creeping back up - I'm setting a mental benchmark of 60% from now on until circumstances change - and I'm certainly pleased not to have a second month in a row under the 50% mark.

January contained some new charges such as accommodation and everyday food which will be reflected every month from now on and add around £315 to my monthly expenditure. If you take these out of the equation, I actually spent only around half of what I spent in December. For February the mobile contract charge will be gone, though I haven't actually reduced overall telecommunications expenditure because I've signed up for wifi at £20/m and phone £10/m (at least both PAYG, though, so can be stopped any time). I could halve that to £15 if I tethered my phone and used only the 2GB/m that would come with that bundle, but I like the internet waaay too much :S The self-storage unit is gone, however, so that's at least £70/m I'm done with. The overall recent changes in standing charges when all is said and done will probably add in the region of £250 to my monthly expenditure.

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Egg
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Re: Egg's journal

Post by Egg »

February looks like it'll be fairly similar to January for expenditure. Job loss still in firm prospect, but I've now been told the medical decision which will decide that isn't till November, so a solid ten months or so to organise a suitable fallback if I can't stay on. This fallback "Plan B" has received a bit of a boost, as I have recently discovered that if I lose my job on medical grounds I will likely get a tax free payment of £20k, which would very much soften the blow. That won't be confirmed until the medical decision, but I intend to take it into account whilst not relying on it in my planning. With what I will hopefully have saved by then, and £20k of studuent loans I've chosen to hold as cash rather than repay (for which interest = inflation), that would see me leave my job with net worth 80k and cash at my disposal 100k. I will also have to take this into consideration of Plan B - how best to use that money.

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Egg
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Re: Egg's journal

Post by Egg »

Here's how things went down last month:

February

Income - £2250

Salary - £2250

Expenditure - £725

Bank account subscription fee - £10
Car hire - £55
Petrol - £40
Other transport - £30
Eating/drinking out - £100
Internet - £20
Misc - £65
Food - £300 (of which ~£30 alcohol)
Accommodation charges - £105

Savings rate: 68%

A decrease in expenditure from last month. I think the food bill has a bit of fat as I eat regularly in the canteen at work for about £4/meal. ~£50/m on car hire, however, is turning out to be fairly standard - much more and it would be more economical to own a car. £45 of the "misc" is essentially a childrens' toy I'm too ashamed to admit to, even in the comparative anonymity of the internet. I've been more disciplined this month on eating out though, and it's great to be rid of the self storage unit (with its associated costs!). So positives and negatives, but a broadly satisfactory month, imo.

For the future, a couple of changes afoot, chiefly that I'm going to start renting a flat with the gf. Am I mental? Probably. Instead of having my room at ~£100/m, I'll be paying £250/m for my half of the rent, and I'll start having to pay council tax/utilities etc. which will be easily another £100/m each. Maybe make some saving on food as a result of having a proper kitchen, but in balance it's very clearly a financially non-beneficial move. On the other hand, the room is tied to the job which I expect to go by the end of the calendar year. So for the sake of ten months at a cost difference of £250/m, the decision will likely cost me £2500 in total, or ~0.7% progress opportunity cost towards my currently-imagined FI pot-size. And they say romance is dead!

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Egg
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Post by Egg »

I've been playing around with Excel. I know there are hundreds of premade spreadsheets online, but I wanted to make my own to be sure I understood all the underlying assumptions etc. I've made it dynamic based on projected ere income and expenditure, rather than assuming zero work and expenditure as latest month's expenses (though of course I can manually enter those two figures if I wish) which may not suit everyone and set it up to produce a rolling 12 month summary and a couple of graphs. I only have 11 months of data, but since I wanted to make it a 12 month rolling basis I just made up some numbers for March for now. Here's what it all looks like at the moment (These graphs calculated based on 900/m expenditure, 0 income in retirement). Any input/refinement appreciated:

Image

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Egg
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Post by Egg »

And a possibly slightly more visually pleasing graph similar to no.1 to show years to retirement of various levels of safety based on SWR:

Image

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Egg
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Re: Egg's journal

Post by Egg »

Last month's figures:

March

Income - £2250

Salary - £2250

Expenditure - £1050

Bank account subscription fee - £10
Rent - £250
Utilities - £70
Council tax - £60
Eating out - £150
Transport - £50
Internet - £20
Phone top-up - £25
Food - £150
Computer game - £20
Flights for holiday - £80
Misc eg entertainment - £65
Assorted home setting up costs - £150

Savings rate: 53%

Not too much to say about this one. Started renting with the gf from a base of zero homeware possessions. Think we managed not to go too mental, sticking to a couple of pots, pans, cleaning equipment, second hand bed etc. I'm alright about having a somewhat lower savings rate due to these costs.

In other news, I've been thinking about life after this job (which frustratingly has no closure as I don't know if I'm going to get the chop or not and won't know for a fairly long time). I've been toying with the idea of going to study medicine abroad. This would be a massive time commitment, and rule out any super-ERE for sure, but I have citizenship of that country and can study in my second language basically for free. Also, living costs are quite low there, so with the resources currently at my disposal, if properly harnessed into rental properties or some such, I could probably get through it all without losing nominal net worth. On the downside, the gf might not be willing to live in said country for that length of time. But it probably won't come to that - it's only a vague idea of the possible.
Last edited by Egg on Sat May 02, 2015 4:16 am, edited 1 time in total.

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Egg
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Re: Egg's journal

Post by Egg »

Looking back at what I wrote last month, it makes me think that I'm a bit of a fickle fantasist. Whilst there are good reasons I am still in the same job as ever for now, I don't really have a single, constant idea of what I want to do afterwards. This month's daydreaming has been about teaching English abroad and travelling like that broadly cost-neutral for a while. I strongly suspect I'll want kids within the next five years, and I'm starting to worry that the window to slake my wanderlust is narrowing. Sometimes I envy all your INTJ focus.

Anyway, here's last month's figures:

April

Income - £2250

Salary - £2250

Expenditure - £680

Bank account subscription fee - £10
Rent - £250
Utilities - £70
Council tax - £60
Transport - £50
Internet - £20
Food - £130
Eating out - £50
Misc eg entertainment - £40

Savings rate: 70%

A considerably cheaper month than the last. I expected living with the gf to increase my costs as I'm paying rent and utilities I wasn't before, but counterintuitively it seems to be having the opposite effect. One thing is eating out less I suppose because I finally live somewhere proper with a kitchen fit for cooking and see her in a domestic context in a way I didn't before. I'm generally quite pleased with my savings rate this month as there is nothing unsustainable or uncomfortable about the way I've been living.

I've also started getting back into playing my violin. I've played since the age of three and had my current instrument for around 12 years, so it's great to reacquaint myself with my old friend. I've started playing in a local orchestra too, which should force me to get out of the house and be a bit sociable in the evenings!

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Egg
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After considerable pondering, I've decided to go into P2P lending. This decision is as much ideological as it is financial. I approve of the concept even though I think the return as compared to the risk is not that stellar.

I put £30k on the market, of which £20k on a monthly basis (annualised rate 2.9) and £10 on a 3-yearly (annualised rate 5.6)

So far, £20k of that has been loaned out on the monthly basis.

We'll see how it goes. At worst some of that will default, and I'll lose some money in return for a lesson in bad money-decisions, but I think it should be okay. Besides, even if I lost it all I'd be pissed off but it probably wouldn't actually make a difference to the way I live my life in the long run.

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Egg
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Last month's figures:

May

Income - £2300

Salary - £2300

Expenditure - £750

Bank account subscription fee - £10
Rent - £250
Utilities - £85
Council tax - £60
Transport - £70
Internet - £20
Food - £170
Phone top-up - £25
Eating out - £30
Misc eg entertainment - £30

Savings rate: 67%

A slight dip on last month but nothing dramatic. I've in mind to save £1500/m until this job comes to an end, simply because it's a round number and fairly realistic.

Image
(* ~20k held in funds but owed as student loan so not counted in Net Worth)

After that anyone's guess. I'm still enjoying http://www.freecodecamp.com/ so as discussed in another thread (viewtopic.php?f=24&t=6435) considering that as a potential career avenue. Othewise, who knows?

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Egg
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Post by Egg »

June

Income - £2300

Salary - £2300

Expenditure - £925

Bank account subscription fee - £10
Replacement bike tyres - £25
Rent - £250
Utilities - £70
Council tax - £60
Transport - £200
Internet - £20
Food - £130
Eating out - £100
Pet expenditure - £60

Savings rate: 60%

I've not accounted for my P2P income as it's a bit hard to judge exactly how much I will get to keep after my tax returns, but it should be in the region of £70/m.

Overall, okay month. A bit worse again than last month, but not tragic. I went out on a compulsory work trip, where the main activity was drinking which turned out a bit expensive, but I enjoyed it in my own way.

This month I also got a hamster, so new expense, but she's my little darling even if she does insist on biting me. It's an added complication if the gf and I go away anywhere e.g. to visit parents, all of whom live abroad, but they do say pets are good stress relief, so even the hard-nosed ERE'ers might see some value for money in there.

Overall, financials are ticking along at an ERE-lite level. Certainly not spectacular, but I'm okay with that at the moment. Life as a whole is pretty decent. My job is increasingly busy, but more worthwhile than a couple of months back, I'm enjoying the new pet, and all seems reasonably dandy with the gf.

This month's focus will be health, with a view to maintaining a stronger emphasis on it in future. I'm reasonably fit, and do exercise, but I'm not especially healthy and eat far too much crap between meals. Also having a few problems "downstairs". Not a substitute for proper medical advice, I know, but anyone who's done damage to their frenulum please do PM me...!

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Egg
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Re: Egg's journal

Post by Egg »

July

Income - £2300

Salary - £2300

Expenditure - £975

Bank account subscription fee - £10
School alumni subscription - £10
Fitness equipment - £25
Rent - £250
Utilities - £80
Council tax - £60
Transport - £110
Internet - £20
Food - £130
Eating out - £200
Entertainment - £60
Pet expenditure - £20

Savings rate: 58%

Not too bad again. A continuation of the downward trend, but nothing too horrific. Quite a lot more eating out/drinking than last month as we've had visitors the whole month. Also a day out to a nearby town on the train. To be honest, I'm more on autopilot than making a big conscious effort to save at the moment. I believe in the concept of financial freedom, but it seems so abstract that I'm a bit short on motivation, and I count myself lucky that my salary is high enough to keep me moving towards it for the time being when I'm still being so lazy. I can already see August is shaping up to be a pathetic savings month, mostly due to going big on my birthday.

Personally, things still decent enough. I've survived to see another birthday. I've also signed up for some distance learning out of interest and have done more exercise/eaten cleaner than I have in recent memory. Violin playing still going strong.

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Egg
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August

Income - £2300

Salary - £2300

Expenditure - £1085

Bank account subscription fee - £10
Education - £150
Rent - £250
Utilities - £80
Council tax - £60
Transport - £85
Internet - £20
Food - £110
Eating out/drinking - £200
Entertainment - £100
Phone top-up - £20

Savings rate: 53%

Uh-oh. A fourth consecutive fall in savings rate :( This trend is starting to embed. The one saving grace is that I've accounted for £150 on education (the distance learning I mentioned in my last post). I should get £120 of that reimbursed so long as I successfully complete the course, but that won't be for a year or so, so I'd rather account for it as a pure 100% cost for now. If we did discount the £120 reimbursable element, though, savings rate would be on par with last month. A somewhat atypical month for spending more generally, as I had my birthday and somewhat expensive celebratory drinking/amusements. On the other hand, I was away for almost a third of the month visiting family at negligible in-month expense (cost of flights etc. accounted for in previous months). So essentially some unusually expensive and unusually cheap weeks.

In other news I'm going to be vegetarian for the month (only five days in so far and neither missing meat nor feeling any better for not eating it). Some people say it makes them feel much better, so worth a go. And if it makes no difference I'll be back on the meat from October! A poisitive develpment is that my job, which was looking quite likely to collapse in November has been extended to March at which point a longer-term decision should be made on my future. I'm a bit ambivalent about the job. I kinda enjoy it sometimes, and there's some cool opportunities but my main motivation is the pay atm, and there's a part of me which wants to lose my job, take the payout and work in McDonald's for a while. I'm very grateful to have that bit of extra security for the time being, though.

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Egg
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Re: Egg's journal

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September

Income - £2300

Salary - £2300

Expenditure - £840

Bank account subscription fee - £10
Rent - £250
Utilities - £90
Council tax - £60
Transport - £100
Internet - £20
Food - £150
Eating out/drinking - £50
Entertainment - £90
Pet - £20

Savings rate: 63%

Well somewhat of a financial rebound here after four consecutive decreases in savings rate. A rate of 63% is bang on my average since starting my tracking spreasheet in April 2014. Nothing unusual to report on financials.

Income/expenditure trends

As I now have a year and a half of tracked income and expenditure, it's increasingly fair and accurate to draw conclusions from the numbers. So, to celebrate 18 months of Excel geekery (and some needlessly elaborate equations) in this month's journal round-up I present a few fun(!) stats and figures:

(12 month average in brackets)
Average monthly income: £2234 (2223)
Average monthly expenditure: £808 (852)
Average monthly savings: £1426 (1371)
Average savings rate: 63% (62)

There were a couple of outlier months just outside the 12 month window, so my last 12 months is probably the most representative.

The end goal

In terms of my end figures, I do have a moving target as SWR is calculated on the average expenditure (since April 2014), which changes slowly over time:

2% SWR: £484,933 12.5% saved, 24 years to go

3% SWR: £323,289 18.8% saved, 15 years to go

4% SWR: £242,467 25.0% saved, 10 years to go

5% SWR: £193,973 31.3% saved, 8 years to go

At the age of 24, I can't imagine not wanting to make any money, so the figure in my head at which I am happy to chill out would be the 5% "SWR". Past this point, I feel like I will probably almost automatically keep on slowly lowering the SWR over a period of years with bits and bobs, without any great urgency...or else I'll have kids/become more consumerist and fuck everything up. Time will tell.

Other

The month of vegetarianism was fine. I didn't feel any health benefits, though. I put this down to two things. Firstly, I was not far off vegetarianism as it was, eating only chicken and that not all the time. Secondly, I feel like I was overly reliant on cheese, which no doubt cancelled out any possible health benefits.

Work is progressing quite well. I've got a one-off language bonus payment coming up next month for qualifiying as a French translator and interpreter. I don't know if I'll be able to use the qualification that much, but I was pleased with the result anyway. It's netted me some free postgraduate credits, too, although I've got partial academic qualifications up the ying yang so I've frankly not much use for those. I'm also hoping to get on a professional course, which could be valuable if I end up out of my current job. So all pleasing on that front.

Dave
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Re: Egg's journal

Post by Dave »

Egg wrote:The month of vegetarianism was fine. I didn't feel any health benefits, though. I put this down to two things. Firstly, I was not far off vegetarianism as it was, eating only chicken and that not all the time. Secondly, I feel like I was overly reliant on cheese, which no doubt cancelled out any possible health benefits.
Hi Egg, just read through your journal and enjoyed it.

I have never cut meat completely out of my diet, but when I drastically reduced meat intake I also noticed no effect. Also like you, I did not eat much meat leading up that point except chicken. Had I been one to eat a lot of steak or (especially) ground beef/burger, this may have been different. With that said, there are substantial financial benefits to reducing meat intake, so maybe you can find a happy middle.

Fair disclosure, I just spent the afternoon cooking refried beans so I may be biased at the moment :-D.

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Egg
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Post by Egg »

Dave wrote:Hi Egg, just read through your journal and enjoyed it.

I have never cut meat completely out of my diet, but when I drastically reduced meat intake I also noticed no effect. Also like you, I did not eat much meat leading up that point except chicken. Had I been one to eat a lot of steak or (especially) ground beef/burger, this may have been different. With that said, there are substantial financial benefits to reducing meat intake, so maybe you can find a happy middle.

Fair disclosure, I just spent the afternoon cooking refried beans so I may be biased at the moment :-D.
Hi Dave. Thanks for stopping by! I've read your journal too. You have a pretty similar layout to mine, so it feels deceptively familiar (although I'm not going to insult you by putting us in the same boat as you're obviously more frugal than I am!). We're also a similar age, so there's a few comparisons in our respective situations.

Good to get confirmation there's nothing wrong with me, though, for not noticing a difference from a small diet change. To be honest, I can't help but wonder if there isn't a siginificant placebo effect for some people and whether the mindset of ardent veggies isn't almost a self-fulfilling prophecy.

Dave
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Post by Dave »

I have to think that you are spot on about the placebo effect. It always feels good to align your values with your actions, so I can see ardent vegetarians feeling good just in general from practicing their beliefs. And eating a good amount of fruits and vegetables does feel better than not doing so, so they probably do feel physically good, in addition to the psychological benefit.

My motivation for limiting meat intake was financial, so I did not get those feelings. I have developed a greater appreciation of the environmental and in some cases ethical benefits to a low-meat diet, but they were not and are not primary in my decision.

Haha and very true, I just noticed our monthly posts are very similar. Great minds think alike!

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Egg
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Post by Egg »

Well, I don't normally post outside of my mothly updates, but I've made an "accounting change" to the way I record things, and it led to a bit of playing on my Excel spreadsheet. Nothing major has changed, but I have decided not to offset my student loan against net worth. There are three reasons for this:

1) If I were to retire right now, I'd stop having to pay it back and it would ultimately be waived after a number of years

2) I haven't been maintaining an accurate record of the size of that debt, but just mentally applying a blanket £20k. That's not too far off, but I repay around £160/month directly out of my pay, which I haven't been counting in either income or expenditure. Since I haven't counted it there, it is more consistent not to account for it in net worth either.

3) I thing about gains (or losses) in real terms. As my loan attracts no real-terms interest, but is used to generate real-term gains, the money acts in exactly the same way as any other money I control.

With that phantom £20k leap in mind, I thought it's been a while since I shared my rolling 12-month graphs, so here goes the main one:

Image

I can't help myself sometimes, but I added a NW projection tab to my spreadsheet with two columns:

1) I can select compounding percentage to see how existing savings would grow if I just covered my living expenses with other income

2) Projected compounding + savings (my 12-month average savings are extrapolated as the default)

Image

Just because you can, obviously doesn't mean that you should do these sorts of things in Excel, but aside from the nerdy pleasure I get from it, I hope this will focus my mind on the gains from working to increase NW as opposed to the snowball factor of wealth. At the moment, my work is the driving factor in increasing NW, but the larger the starting point, the less compelling the case for work to increase wealth becomes. In effect, though, my snowball has yet to gather any significant steam of its own, which is a little mentally frustrating for now.

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