Been a follower of this website for quite sometime, but haven't found the motivation to get going until now. Tired of seeing my pay packet disappearing down a rabbit hole. I like my job, but I desperately would love to gain financial independence, rather than retire early. I don't think I am in a completely terrible situation, but I definitely need to be doing a HECK of a lot better. I am 28, married and have a child, so financial independence is going to be tougher for me than most of you guys.
Here's the overview of where I am.
Cash: €1,100 in my bank account right this minute. €40 and £80 in my wallet. That is all I have in the world, a shockingly low amount of savings, I know. My wife and I have another £2,500 in savings in an account of hers for a rainy day. I am just going to leave her hang on to that.
Stocks: $3,500 worth of stocks in my brokerage account. I have made some really, really dumb decisions with regard to picking stocks (concentrating on extremely risky companies that have tanked). If I had picked a lot safer stocks, I would be in a much better place. I have learned my lesson. I should probably liquidate what is left and start again.
House: I own a house with three bedrooms that's worth about £60,000. There is £52,500 outstanding on the mortgage of this house. I have spent most of my savings (about £10k) on refurbishing and kitting the house out. Going forward, there shouldn't be too many costs associated with this. Other than the mortgage, I don't have any other debts as I have paid off my student loan.
Pension: I contribute to a pension that currently has a value of €16,100. At the moment, all this money is entirely in cash, as opposed to bonds or stocks.
To start with, I am going to get my expenditure under control. Have a basic spreadsheet set up to track spending. Need to start cutting out the low hanging waste, there should be a lot of it.
NIERE's Journal
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NorthernIrelandERE
- Posts: 10
- Joined: Thu Jan 12, 2012 5:31 pm
Ok, time for an update.
I haven't been keeping track of my records very well, but I have been making an effort to reduce my expenditure and build my savings up. I now have €3,300 in one savings account and £625 in another savings account, in other words, I have managed to save roughly €1000 a month. Not amazing, but it is a start and there is still low hanging fruit that can be pruned from my expenditure.
The bad news is that my stocks took a further hammering, portfolio is down to $2,720. What annoys me most about my investment portfolio is that I actually spent a lot of time researching high-quality stocks, but ignored my own advice and went for much riskier comapnies which were struggling with large debt loads or crappy business models in the hope that I could get a return of multiples of my original investment. Really, really dumb strategy which I deserved to be roasted for. The irony of the whole mess has been that if I had just bought the high-quality companies that I had found through research, I would have gotten very respectable 20-50% returns over the past 3 years. The important lesson for me is that I must diversify (instead of 2-3 companies, I should have about 10) and that I should focus on high quality companies that are trading at reasonable prices. With the turds I bought, bad news just begot more bad news. With the high-quality companies, I found that generally good news begot more good news.
Some new year goals.
1. Start actively tracking expenditure. I know I am still spending too much money on things I don't need. A tracking spreadsheet makes a lot of sense to identify waste and cut it out. I have already set this up in Google docs and have been adding my expenditure record as of the 1st of January.
2. Invest more wisely. Not too concerned with picking investments just yet, as I want to build up a decent sized cash pile first. Also need to consider the tax implications. Dividends in this country are taxed like ordinary income, so it is much more preferable for me to invest in stocks that don't pay them.
3. Start selling all my excess crap. I have a house full of cd's, dvd's, electronics that I no longer have the need for. It will be interesting to see how much my collection of "stuff" is going to sell for.
4. Look at other sources of income. I have a few websites (hobby-related) that get a decent bit of traffic. I will have a look at seeing can any of what I have can be monetised.
I haven't been keeping track of my records very well, but I have been making an effort to reduce my expenditure and build my savings up. I now have €3,300 in one savings account and £625 in another savings account, in other words, I have managed to save roughly €1000 a month. Not amazing, but it is a start and there is still low hanging fruit that can be pruned from my expenditure.
The bad news is that my stocks took a further hammering, portfolio is down to $2,720. What annoys me most about my investment portfolio is that I actually spent a lot of time researching high-quality stocks, but ignored my own advice and went for much riskier comapnies which were struggling with large debt loads or crappy business models in the hope that I could get a return of multiples of my original investment. Really, really dumb strategy which I deserved to be roasted for. The irony of the whole mess has been that if I had just bought the high-quality companies that I had found through research, I would have gotten very respectable 20-50% returns over the past 3 years. The important lesson for me is that I must diversify (instead of 2-3 companies, I should have about 10) and that I should focus on high quality companies that are trading at reasonable prices. With the turds I bought, bad news just begot more bad news. With the high-quality companies, I found that generally good news begot more good news.
Some new year goals.
1. Start actively tracking expenditure. I know I am still spending too much money on things I don't need. A tracking spreadsheet makes a lot of sense to identify waste and cut it out. I have already set this up in Google docs and have been adding my expenditure record as of the 1st of January.
2. Invest more wisely. Not too concerned with picking investments just yet, as I want to build up a decent sized cash pile first. Also need to consider the tax implications. Dividends in this country are taxed like ordinary income, so it is much more preferable for me to invest in stocks that don't pay them.
3. Start selling all my excess crap. I have a house full of cd's, dvd's, electronics that I no longer have the need for. It will be interesting to see how much my collection of "stuff" is going to sell for.
4. Look at other sources of income. I have a few websites (hobby-related) that get a decent bit of traffic. I will have a look at seeing can any of what I have can be monetised.
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CelticTiger
- Posts: 71
- Joined: Thu Oct 21, 2010 12:04 pm
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NorthernIrelandERE
- Posts: 10
- Joined: Thu Jan 12, 2012 5:31 pm
Yes, I live in the North, but work in the Republic. If it wasn't for the fact that salaries in the Republic are much higher than what they are here, I definitely wouldn't be bothering.
There isn't a lot of crossborder arbitrage you can do other than the one you've highlighted (fuel). Having said that, I did make a profit of €55 buying a Nexus 4 from the Google Play Store and selling it to a colleague in work
There isn't a lot of crossborder arbitrage you can do other than the one you've highlighted (fuel). Having said that, I did make a profit of €55 buying a Nexus 4 from the Google Play Store and selling it to a colleague in work
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NorthernIrelandERE
- Posts: 10
- Joined: Thu Jan 12, 2012 5:31 pm
GPMagnus - I am way ahead of you. I have read several investing books (including the The Intelligent Investor), like I said though, I made my mistake in the execution. Even though I am well capable of identifying good investments, I just went off and bought bad ones, in the attempt to try and beat the market.
The focus from now on will be buying high-quality businesses with good track records that are selling at reasonable prices. Oh, and to increase diversification.
The focus from now on will be buying high-quality businesses with good track records that are selling at reasonable prices. Oh, and to increase diversification.
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BelfastERE
- Posts: 2
- Joined: Fri Mar 29, 2013 1:41 pm