This month's graphs are in and given below. Day-wise breakdown will be provided if anyone is interested.
Clockwise from top-left:
First: Pie chart of total expenditure divided into categories.
Second: Pie chart of total income.
Third: Day-wise income.
Fourth: Day-wise expenses.
Financing 38.4%
Education 55.5%
Transport 3.9%
Food remaining
Of expenses.
Operating income 66.9%
Bond income 0.4%
Invoice discounting income 23.6%
Interest income 3.7%
Of incomes.
Books bought for gift giving classified under Education.
Savings in this month comprise 1.58% of total savings.
Savings will exhaust on December 2028 assuming debt repayments and debt level both remain same.
Savings will exhaust on July 2050 assuming I've cleared all debt from savings.
Income rose by 14.08% vis-a-vis last month.
Expenses rose by 98.76%, that is, nearly doubled from last month.
EMI to income ratio 0.4683119493
Debt to Equity ratio 0.1591114724
Thanks for your journal update! Doubling expenses is a wild swing. What is the "financing" under expenses? Are those debt payments? (I remember EMI = monthly equated instalment.)
I find finances are clearer when I separate personal spending from saving and investments. Personal spending is about making the most of my monthly budget. Saving and investing is about wealth management. The first requires daily attention and is fairly predictable, especially if you make reservations for upcoming payments. The second requires attention a few times a year, and has truly wild swings in value.
I can have a frugal month and yet lose a lot of net worth to market swings. That still means I made financially healthy personal choices.
Thanks for the tip delay. I agree that decisions should be judged in the light of the information available when making them.
Apart from debt repayments Financing expenses also includes the frictional transactional costs of using banks such as SMS charges, minimum balance non maintenance charges, transfer charges when incurred. They wild swings are also because I am using cash basis rather than the accrual basis of account keeping.
I make reservations for upcoming payment by laddering invoice discounting payout dates before the EMI due dates. Payments upto January are covered in this way.
In accordance with the discussion with delay above, I've separated the loan repayments (cash outflow from financing activities) as the loan principal and interest repayments have alreaded been subtracted when calculating the net worth.
Expense Rate 3.67%
Saving Rate 96.33%
Transport was 14.13% of expenses or 0.52% of income.
Food was 21.10% of expenses or 0.77% of income.
Financing was 857.82% of expenses or 31.48% of income.
Investment Income covered 98.86% of expenses or contributed 3.63% towards total income.
Operational Income covered 1222.28% of expenses or contributed 45.91% towards total income.
Invoice Discounting covered 1208.44% of expenses or contributed 45.39% towards total income.
Bond Income covered 6.71% of expenses or contributed 0.25% towards total income.
Interest Income covered 67.89% of expenses or contributed 2.55% towards total income.
This month's income contributed 4.06% towards net worth.
Net worth will last until June 2077 if I spend like I spent in November 2024.
The amount I've saved in November 2024 will last me until December 2026 if I spend like I spent in November 2024.
After adjusting the month prior to the month under review, that is October 2024, also for financing expenses, income in November 2024 rose by 45.36% where as expenses fell by 39.72%
The amount I've saved in November 2024 will last me until December 2026 if I spend like I spent in November 2024.
Thanks for your journal update! These numbers are rather extreme. How likely is it that you will maintain the spending level of November 2024? To what extent are these numbers a real estimate of your future? Which decisions could you make based on these numbers?
Yes it is extreme but what's the name of the website again?
I cannot predict expenses nor do I budget for it but income in December 2024 will be 79.79% less than that in November 2024.
1/6th of net worth could get wiped out when I decide to pay for the marriage ceremony.
Expenses will multiple based on the number of dependents I pickup or produce.
Paying for rent to move closer to work could also set me back a few years.
From reading your journal, it looks like you're modeling a future you know won't happen. Like, you won't really live on November's income until December 2026
I get the impression you want to be a good member of your extended family more than being financially independent. If you model that, then spending money on family matters may have a comparable or better return than investing.
Money is fungible. Except for the sequence of return risk, it does not matter which unit I spend first.
I grew up in a nuclear family and visit the next of kin once in two years.
Thanks for your reply. Yeah, agree on the fungibility of money. Based on "the number of dependents I pickup or produce" I assumed you were part of a non-nuclear extended family, where pickup means like a nephew or uncle coming to live with you. It's not easy to communicate over the internet
A cousin had applied for college admission in the city we live in this year with the understanding that she'd live with us but got admitted into a college in her hometown itself.
Another cousin lives on rent one pin (zip) code away but we've not visited since she moved there, lost here job, took on a loan to start a salon there.
Used to take the rickshaw as the bus route changes due to a bridge the bus used to pass over was cordoned off for renovation.
Discovered that the same bus number now takes two routes, one of which drops me off at the station to take the train to work.
So switched back to taking the bus leading to drop in daily transport cost in the ratio of 10:1
Transport was 12.02% of expenses or 0.52% of income.
Food was 32.05% of expenses or 1.4% of income.
Investment income covered 97.32% of expenses or 4.25% of income.
Salary income covered 1930.25% of expenses or 84.2% of income.
Invoice discounting income covered 62.39% of expenses or 2.72% of income.
Bond income covered 69.06% of expenses or 3.01% of income.
Interest income covered 112.79% of expenses or 4.92% of income.
All in all, non-salary income was only 15% this month.
Savings grew by 2.10% this month.
Savings will last until February 2112 if I spend like I spent in December 2024.
Income fell by 79.16% from that of November 2024.
Expenses fell by 36.68% from that of November 2024.
Safe Withdrawal Rate stands at 1.81%
Got a serendipitous interpretation gig on the last day of the month.
Moved home, now commute time is 2 hours either way minimum.
Saving Rate 96.31%
Expense Rate 3.69%
Transport was 34.36% of expenses or 1.27% of income.
Food was 65.24% of expenses or 2.40% of income.
Financing Expense was 1507.89% of expenses or 0.56% of income.
Investment Income was 173.78% of expenses or 6.41% of income.
Operational Income was 24.58% of expenses or 90.59% of income (this includes the gig.)
Bond Income was 0.11% of expenses or 0.41% of income.
Interest Income was 1.19% of expenses or 4.40% of income.
Non-Operational Income was 304.38% of expenses or 11.22% of income.
This month's savings increased total savings by 2.25%
Savings will last for 96.61393939 years until August 2121 if I spend like I spent in January 2025.
Change in income from last month 5.31% (income increased)
Change in Expense from last month -10.16% (expenses decreased) Safe Withdrawal Rate 1.04%
Got a serendipitous interpretation gig on the last day of the month.
Moved home, now commute time is 2 hours either way minimum.
Thanks for your journal update! I wonder what an interpretation gig is. I'm thinking maybe real-world translation services, but it could also be analyzing a helpdesk data set.
Two hours commute is rather long. I hope you commute fewer than five days a week.
Thanks for your journal update! I wonder what an interpretation gig is. I'm thinking maybe real-world translation services, but it could also be analyzing a helpdesk data set.
Two hours commute is rather long. I hope you commute fewer than five days a week.
Translating in real time to and from Russian into other languages.
There was another potential client at an exhibition for three days but they wanted a girl.
This exhibition seems to have absorbed all the interpreters in the city opening up this group of after-business tourists for me.
It is work from office all 5 days. I have enough leaves stacked up with which I am trying to give myself a 4-day work week. These leaves will extend by notice period if I take them when serving notice so better to use them up.
Transport was 36.37% of expenses or 0.94% of income
Food was 37.80% of expenses or 0.98% of income
Financing expense (paying back loans) was 44.04% of income
Salary was 62.46% of income with the remaining income being non-salary income.
Dependent on salary for 86.7% of income as faced a default and matter in court.
Thankfully a previously delayed repayment came through and I was able to max out the public provident fund PPF for this year.
Lesson learned, first thing I am doing after setting aside a portion of salary for loan repayments is maxing out national pension system and PPF contributions.
This puts away the money until I am 60 for NPS and for another 5 years for PPF so that I don't do something stupid with it.
I have transitioned from the growth phase to the preservation phase.
Will transition to the distribution phase when I retire at 58 years old.
Thanks for your journal update! The Dutch provision for do-it-yourself pensions is called "lijfrente aftrek". It comes with serious drawbacks, like requiring that you use the savings to buy a 20+ year annuity, and ever changing rules, not the least of which is an ever increasing pension age.
By contrast the Indian PPF reads as really generous. You can withdraw after 15 years without penalty. I wonder if it's too good to be true
Dear delay, NPS national pension system is market-linked and is the same as what you described above where you've to buy an annuity at 60 with 80% of the accumulated amount.
PPF was started more to increase the reserves with the country but now is kept as millions of people have become dependent on it, its tax exempt status on withdrawal of funds was changed, interest rate was reduced but people like me keep putting money in it due to the sovereign guarantee. I will have a third of my net worth in it if a repayment I am owed come due on time on 26th April. My dad went to deposit in his PPF account this FY and was refused as his 20 year period was over (15 years and then can be extended in blocks of 5 years) so he filled form H to extend it for another 5 years. Instead of rushing into buying this apartment, if he'd had timed his cash flows, he would not have had to sell his mutual funds during the first dip and by waiting 5-6 months, could have reduced the home loan by taking some out of the ₹27 lakhs in PPF and renewing the remaining as the interest rate on PPF is 7.1%, interest rate of the home loan is 8.5% which has fallen to 8.05% in the past two quarters.
There is also UPS now so that pensions are available to non-salaried persons also.
Between 20% to 30% of my net worth is stuck in highly illiquid assets which I though were non-market linked with 5% of net worth defaulted already. I have been assured it is a delay and not a default but my blood pressure seems high and I am having sleepless nights. It is not that I did not anticipate such a situation but I overestimated my ability to bear such a situation. Plus my dad asking me to give all my money to him to buy a flat as we've been renting in this city for 20 years spooked me into it.
My dad faced a similar situation when he was my age when all his savings and his dad's retirement savings got wiped away when the credit society in which they had deposited collapsed. Regulatory environment has improved much after that but I have become like my dad as he become like his.
If you don't mind me asking, why did you move back home and subject yourself to a two hour commute each way? Will the apartment your father is thinking of purchasing closer to work?
