Great job but... A Danish FI journal

Where are you and where are you going?
DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Re: Great job but... A Danish FI journal

Post by DutchGirl »

radamfi wrote:
Mon Oct 04, 2021 2:26 am
Can't you get your work pension earlier than the state pension? In the UK, work pensions can be withdrawn at age 55 (57 in a few years).
In some cases yes, slightly sooner. In that case this would become a three-stage-plan: 1. before any retirement plans pay out 2. after you can tap into the work pension but before you get the state pension 3. work and state pension both pay out.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

@DutchGirl
We have mandatory work pension. We also have state pension that is paid by taxes. As of now the rules are that I can get my work pension from 63yo and state pension from 71yo. GF can get hers a couple of years later than me because she is 3 years younger. The state pension could very well be postponed because of deficits in the state budget. Nobody knows how the state budgets look like in +30 years so I don't think that it is very reliable. Work pension is more reliable as the money is saved in a big fund. I read that I can expect around 300K annually (enough to pay all of our bills) if I retire at 63 but I think that is only if I work until then. I cannot find anything about early retirement. So far I have saved 3-400K in my work pension plan. State pension will probably also be able to cover all of our costs because by then our mortgage will be paid off and that is by far our biggest expense ~40%.
I cannot get the firecalc to work for our variables. I don't think that it is unreasonable to say that we will need 500K-1M less savings if we expect to be able to live of our work pensions in 30-40 years. I will try to put it in the spread sheet when I have time for it.

Q3 results
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Record earnings after tax. I got a lot of over time paid and that made up for Gfs one month without salary.
SR dropped from 61% to 55% due to higher expenses. We paid many annual expenses in September (house+car insurance) and I also donated 17K to MSF which I have done annually in the past +5 years.

House maintenance went to paint and other stuff for the upper floor. We are in the process of painting all the walls white. They were brown when we bought the house. We have done all of it ourselves with the help of GFs parents and it has taken up a lot of our spare time but worth it since it will become a very nice second living room.

Other house exp increased due to annual payment of house insurance.

Other fixed exp fell as there was no payment for my psychotherapy course this quarter. We both went to the dentist and that cost a little less than 2K total.

Transport increased due to insurance payment and we needed a part changed. I thought we still had warranty but apparently not since the car was imported. So we had to pay 1.5K for the repair. I guess the value of the car also dropped 10-20K but I have not included that as an expense. We want to keep the car for many years and we could end up saving money as it does not have to go to maintenance twice a year anymore. We only followed the official maintenance program to keep the warranty. The car is known for its longevity so we cross our fingers and hope that we don't have an unlucky model.

Food dropped a bit. We harvested a lot of tomatos, cucumbers, green pebers, some zucchini and even a small watermellon.
It could maybe have been a bit lower but during our holiday in July we bought extra treats since we didn't travel.

Other variable exp would have been lower were it not for the MSF donation.

Overall, we are doing much better than budgeted. The main reason is that our salaries are much higher. Nothing had really happened, maybe I forgot to include paid over time in the budget. In little more than a year I will finish as a specialist and my salary will increase. I don't know how much. It depends on where I end up getting hired. With this pace, I think that we could be FI in 3-4 years depending on how we can include our work and state pensions in the calculation.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

2021 results

Savings rate for Q4: 53%
Annual SR: 59%
Mortgage rate of total expenses: 40%
12-months SWR: 31.5%

JAFI: 2.4 (1.4 excluding mortgage)
1 JAFI = 9343 USD (34% inflation since 2007) = 122,369 DKK for the two of us. (1 USD = 6.55 DKK)
Excluding mortgage our total expenses were 178,845 => we have to spend around 50,000 less to reach JAFI. It is not that far away. Work related expenses were significant this year. I spent about 32,000 on psychotherapy course including transportation. Union fees and GFs unemployment insurance equals just short of 18,000. Additionally, our power bill will go down a lot if we do not have to take the electric car commuting.

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Savings have been much better than anticipated. One reason is that I did not start psychotherapy myself which would have cost about 40,000. House maintenance was lower than budgetted. We only needed to change the kitchen extractor hood. We paid 875 for service of the old one only to be told that the switch was the problem and that part is not sold anymore. It was 15 years old but still stinks to throw it away due to that. If I had (a lot) more free time it could be fun to try to fix it. Instead we bought a new one from Ikea for a little less than 2,000. It is a bit noisy but for the price it is fine and cooking is not a big interest of ours.
We have not yet felt the increased cost of energy. We had a very good fixed deal on power that ended on new year and we now pay the real-time cost of power and even in night when we charge the car it is most often much more expensive that our previous fixed deal. I expect avr cost will be at least 2x and 5x is not unlikely. We might end of saving on power because I change work place to a hospital within biking distance and GF works two days home per week. In the summer I think that we most weeks will be able to charge the car from the solar panels. GF also work closer to home and that alone will safe around 50%.
I have paid my last fee for he psychotherapy course. It ends in the summer and I will then also spend less on transportation.
Our very good result for the year is because the salary in the budget is a bit conservative. I did not start psychotherapy myself, which in mandatory for a specialization, and would cost at least 40,000. I’m not sure that I will do it this year. I don’t know of any specialist that lives close to us so I might wait until an opportunity arises.
My salary for next year is uncertain. I don’t know how much over time my new department will pay or demand that I take time off instead. I also got an offer for an extra part time job at my current department. I will be able to do some of the work for home but will have to go to the ward at least one time every other week, maybe even ones a week. I also have a lot unfinished research so I’m not sure that I have time for it. The pay is good but even 50,000 extra after tax a year is mentally not that much for me compared to this year’s surplus.

Liquid assets

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We are now fully invested and plan to continue DCA in the future. We invest in global equity index and bond index. Equity has an overweight of emerging markets, ESG and low volatility. Lately we bought a green bond index and have decided to focus on ESG and low vol. I don’t like investments in oil etc. and I have decided that diversification is fine in the world ESG index. The ESG index that we buy follows the MSCI ACWI ESG Leaders Select Sustainability.

In hindsigt it would be better and cost us maybe 40,000 not to invest all of our money in the beginning of the year. Though DCA gives us better sleep at night and in the grand scheme it is not that much.
Bonds is 23% of our investments. We aim for around 30% and I think that we will catch up during this year.
In total our investments made us 46,089 or 6-8%. I hope for 5% this year but who knows.
GF also paid of her student loan and a loan from her parent for more than 60,000. So except for mortgage we are dept free.
Soon we will reach 1,000,000 in liquid assets which will be a fun milestone.

Other assets

Our house and land are worth about 3m. I not sure if the price target has moved up or down the past year and we are not interested in selling anyway.

The car is worth 100-112,000 according to a danish website. That is a 40,000 decrease in less than 1,5 years since we bought it. I hope that it can last 5-10 years with minimum of maintenance and if so it will not be that bad of a deal.

To conclude, it has been a really good year moneywise. We have not had any unforeseen costs. Our salaries are expected the be in the same range in the coming year as as we both hold stable government jobs.

I might dive more into our expenses in a later post or write about other stuff e.g. prioritizing work/income/research/free time. I enjoy during the quarterly updates so those will for sure continue.

Married2aSwabian
Posts: 265
Joined: Thu Jan 07, 2021 7:45 pm

Re: Great job but... A Danish FI journal

Post by Married2aSwabian »

Bonde wrote:
Sat Sep 11, 2021 10:45 am

Reading Ray Dalios online book "The changing world order" I prefer to have broad exposure to be ready for a possible change in the big debt cycle.
https://www.principles.com/the-changing-world-order/
I’ve listened to several of his talks in the past couple of years and just watched this summary yesterday:

https://youtu.be/xguam0TKMw8

How was the book? Does he give more specific examples - comparisons with Roman Empire as well?

As an American, it’s unsettling, but seems to very accurately connect the dots.

Maybe some gold and crypto in the portfolio wouldn’t be so bad after all.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Married2aSwabian wrote:
Tue Mar 08, 2022 7:31 am

How was the book? Does he give more specific examples - comparisons with Roman Empire as well?
Sorry for the late reply!

I cannot remember if he used Rome as an example. He wrote a lot about the Dutch and GB and how they also turned away from the gold standard during their decline.
I think some chapters is shared by Ray on Linkedin.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Our first million!
(and look out for an early Easter egg)

I have been busy with work and other projects the past quarter. I want to journal about habits and goal setting inspired by the Huberman lab podcast but have not found the time to do it.

Results for Q1 2022
Savings rate: 59.5%
Mortgage rate of total expenses: 42%
12-months SWR: 30.3% (down from 31.5)

Liquid assets: 1,027,785 DKK
It’s is exciting to see our priorities and financial focus turn into measurable results.

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The percentage of bonds in our portfolio is tiny bit down from 23% to 22%. Luxor green bonds ETF has been hit hard and I am not sure of my strategy for bonds when the interest rates are trending upwards. We also hold a Danish bond fund and a TIPS ETF.
Overall the investments went down this period. We have lost about 20K. This is also due to annual dividends from our Danish fund. The dividends are taxed by 27% before we can invest the money again. It does not help to buy accumulating ETFs as the gains are taxed annually anyway.
Our most profitable investment has been in the ishares gold producers ETF. It is up 24% since we bought last year. We own for about 45K and that is about 5% of our investments. Due to Danish tax law it is not favorable for us to invest in real gold or a gold ETF.
Here is the results from my main account. Though the results to the right do not show the dividends of 15K after taxes.
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Expenses
I put Q1 2021 and 2022 next to each other. We have some larger annual expenses that usually are paid in the same time of the year. But I am not sure if it is more confusing to put them next to each other. If you have any suggestions for the graphic please let me know.

Other variable expenses have increased. Covid is almost not a thing anymore. Masks are not mandatory and life seems back to normal. I see in the news that thousands of refugees from Ukraine have travelled to Denmark but our lives are not at all influenced by it. So sad to witness most of their country get ruined. We have donated a small amount to charity. I prefer donating to MSF without a specific purpose. Here the state are able to handle the crisis (a benefit from the high taxes).
Concerning other variable expenses: When life are back to normal, we go out more with our friends and coworkes. I have paid 1K upfront for a bachelor party. And we will visit my sister abroad in May and bought plain tickets for 3K in advance.
Electricity is paid in advance but luckily our consumption has been quite low in the recent months. I have not really felt inflation that much elsewhere but I do not buy so much stuff. I felt it most when I bought plain tickets. In a way that felt no so bad because I think that plain tickets used to be way to cheap compared to the environmental costs.

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Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Small bruises from a bear (market) attack

I have been even more busy with work. So much going on and I don't think I will be able to do more than the quarterly updates for the rest of the year. I still follow the forum and enjoy reading but rarely comment.

Results for Q2 2022
Savings rate: 67.9% Second best ever. Mostly due to 30K tax returns from 2021.
Mortgage rate of total expenses: 43%
12-months SWR: 28.9% (down from 30.3)

Liquid assets: 1,095,107 DKK
I read that S&P500 have had the worst 6-months downturn in the past 52 years. With that and inflation in mind it is good to see that our savings keep going up.

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Overall our investments took a big hit in Q2. We lost a little less than 80K on equity and bonds. We also lost about 20K in Q1. A simple calculation gives a percentage loss of 8-9% which is a lot better than if we were fully invested in the S&P.
I don’t think it is easy to balance risk and values/ESG. We have 22.2% bonds in our investments and the rest is placed in mostly global ESG or low volatility funds.

Expenses

Our expenses are a couple of thousands below Q1. Other variable expenses include a trip to visit my sister in England and a wedding that we attended (1K for gift and 1K for bachelor party).
Other fixed expenses are down compared to last year. This year I have finished my psychotherapy course and last payment was in 2021 (26K/year).
Next quarter we have to pay insurance. We got noticed that they will increase fee by 10% so we try to find another insurer and have booked some meetings.

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That’s all for now. Enjoy the summer.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

We converted our mortgage to a 4 % loan instead of 1 %. We cut off around 20p of our loan (the Danish mortgage model) and paid of an extra 133K from our savings. Now we owe a little less than 1.9M (2.5M before). Our quarterly mortgage will be about the same but due to higher interest rate our tax deduction will be larger. The total expenses for the new loan are higher so in the long run (+15-20 years) it is not a good move. We have 28 years left on the new mortgage but we plan to convert again if the interest rate moves up or down 1 % or pay off extra. Total annual expenses goes up from around 4 % to 5 % so it makes it more attractive to use some of our savings for that.
Psychological it is nice to know that we can pay off our mortgage in 4-5 years if we use all of our annual savings. A 50/50 split between equity funds and mortgage is more likely. I don’t think that we will invest more in bond funds. Mortgage is a more secure alternative for us and as I have mentioned before bonds are taxed heavier than equity in Denmark.

Short garden update: It is a really good but short plum season. We got two trees and this year they both produce a lot of plums that taste amazing (like Kramer’s Mackinaw peaches). Each tree only has ripped plums for 2-3 weeks. Fortunately they almost don’t overlap. We try to freeze some bags of plums and I think that we will have enough through the winter as oatmeal topping. We will also freeze apples. Both can also be used for jams, pies etc.
We will maybe save a few hundred DKK so not the most profitable endeavour but more real life rewarding than converting our mortgage. Mortgage is a short term target to reach FI. Eating healthy and sustainably are targets for the rest of our lives.
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Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Q3 2022: Recovery and crashing again

Still busy working. Research is really interesting and takes up a lot of time. We got some interesting findings from a small study and have applied for more funding.

Zettelkasten
I got inspired from a post about it by AxelHeyst. I have not managed to get a good work flow using obsidian yet. From now on I will keep track of some metrics from there:
7 maps
46 files
1 output (funding application but did not use obsidian from the beginning)

Financial results
Savings rate: 63.2%
Mortgage rate of total expenses: 29%. Some of the payment was postponed to next quarter due to conversion of the loan as mentioned in previous post.
12-months SWR: 27.3% (down from 28.9). Pretty good when liquid assets decreased. 12-months expenses fell even more from about 316K to 293K.

Liquid assets: 1,071,851 DKK
As mentioned we paid of 133K when we converted the mortgage and we almost did not invest anything this quarter.

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Our investments went up and down as shown in a graph from our main investment account. We lost about 10K and in total we are down about 64K. On a positive note it is happening for us early in the accumulation phase.

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A simple calculation of our total net worth including our house minus mortgage and car (not including work pensions) puts us at around 2.85M. It is totally fictional as we are extremely unlikely to sell our house. But it is nice to know that we are wealthy.

Expenses
We got a generic email from our insurance company (house and car) saying that they had to increase prices by around 10% due to bla bla bla. Then we held meetings with other insurance companies and got a better offer. Only one company could get us a better offer than we had before. I called our current insurance company about the offer and the quickly matched it so for now we stay with them. We end up saving about 2K annually.
We have some big expenses coming up. We have to buy wood pellets for heating and the price have increased 3x compared to last year. Instead we can fire with pellets from leftovers from sunseed production that is only 50% more expensive than the wood pellets from last year. Luckily we have leftovers from last winter. That is about 60% of the pellets we need to get through the winter so our heating cost will pretty much stay the same. Other expenses include annual donation to Doctors without borders (17K) and I also consider donating 10-20K to a political party that takes climate change seriously. Election for parliament in Denmark is likely to be announced next week. I don’t feel so bad about using around 10% of our annual expenses for courses that I believe is important and don’t mind the extra time to financial independence.

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That’s all for now. I really enjoy writing these posts, going through our finances and thinking about what to come.

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Happy New Year :)
I enjoy this forum and visit almost daily but do not have much time to post anything worth sharing.

2022 results

Still busy working. I had a long christmas break which I appreciated. Research had a setback because I made a mistake in the application for funding. A minor mistake with major consequences. My supervisor was pretty sure that we would get funding so now we have to apply other funds and the project will be delayed at least some months. I will talk to him on Tuesday to make a plan B together. I really looked forward to starting the project even though research is only part time for me. I mostly do clinical work.
On a positive note, we got an article published and I also finished a book chapter that is expected to be printed in some months.

Zettelkasten and GTD
Obsidian: 130 files (Q3: 47)
Output: book chapter, academic manuscript that is in peer review, two abstacts.

Almost a note a day but got out of track during December. I only have obsidian on my home computer so instead I have just made an online doc I can use at work. Hopefully that can help getting this habit more consistent. In the next months I will also try to find some time to read my notes about the zk system to improve my note taking.

I changed a bit in my own system a bit after I read AHs post about GTD and also listened to some podcasts. I have made a brain dead list for things to do that use almost none mental energy. I also got some inspiration for weekly review. All my list are not fully updated but I made the spread sheet that I use available when I am at work and I am hopeful that this will help.

Financial results
SWR: 27.9.
Up from 27.3 in Q3.
22.4 if donations and the most obvious work-related expenses like DWs unemployment insurance are removed.

Savings rate: 58.1% for 2022. Slighty less than 2021 (58.7%).

Our expenses increased by around 25K compared to 2021. But we also donated way more (45K vs 18K). I have not had the time yet to make the usual graph.
Our income increased by almost 50K.

Liquid assets: 1,154,587 DKK
Up around 82K compared to Q3.

Our investment results ended up unchanged. We are all time down 61K, 3K better than Q3.

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Are we FI?
I guess in theory we have options to go FI.
Including illiquid assets our net worth is close to 3M but we do not want to sell our house. If we did we could maybe go FIRE/ERE if we found a cheap place to live and lowered our expenses. It is good to have that option but it is not at all relevant at the moment.

Goals for 2023
- Read up on forestry and look into what is possible on our land
- Study zk and GTD
- Acquire funding for research project or get it done without funding
(these are on purpose not very specific and may change)

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Q1 2023
Due to privacy I have kept the birth of DS secret for several months. Fortunately, no major problems. He is lovely and has a lot of energy. We try to adjust to the new circumstances and we are both really tired. It is both physically and emotionally draining to be a parent.
The economic costs have so far been negligible. DW breastfeeds and we had some minor expenses for antifungal treatment. Diapers etc. are part of our groceries. My guestimate for monthly baby-related costs is 500-1000 DKK. It will be more expensive when he starts in daycare, around 3500 DKK monthly (heavily subsidized by the government). DW also gets a lower salary for some part of her maternity leave. I get 11 weeks in total with full salary.
Most stuff like clothes, bed, car seat, toys we have borrowed from DWs sister and we also got some gifts from relatives.

Financial results
I have chosen to make it more simple. Both to save time and privacy.

SWR: 27.0
Savings rate: 44.5% (58.1% for 2022)
Liquid assets / goal: 38.8%

We got a good offer to buy a lot of wood pellets. That’s partly why the SR is a bit low. Our income was also a bit lower than usually.
I will adjust our goal annually according to our current expenses, expected pensions etc.

Zettelkasten and GTD
Obsidian: 149 files (2022: 130)
Too few new notes but I have upped my effort in the past week and are currently at 186.
I have not worked on GTD other trying to use less time on social media.

Weight
I had not stepped on a weight for more than a year and was a bit surprised to see an all time high. I gained 5 kg. Not good. I started to do more cardio. I have time for short workout sessions of around 20 min., 6 days a week. I don't count calories. Instead I try to be mindful not to eat too much. My goal is to loose 0.5 kg per week and end at 69 kg. So far it has been a bit up and down. In six weeks I have lost 0.43 kg per week.

70,7 - 17/2-22
75,7 - 9/3-23
74,2 - 22/3-23
75,0 - 5/4-23
75,3 - 12/4-23
73,9 - 19/4-23

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Q2 2023
DS is doing well. He is mostly in a good mood, sleeps long naps and eats well. But life as a parent is tough. Babystuff takes up most of the day, very little time to relax and DS is messy so much more everyday cleaning than we were used to. I have much less time to read and do other stuff that I am interested in. On a positive note, I have less screen time, I spend less time on facebook and youtube.

Financial results
SWR: 24.0 (-3.0)
Savings rate: 65.4% (+20.9)
Liquid assets / FIRE goal: 43.6% (+4.8)

Results look good. We got a good tax return from 2022 and SR was unusual low last quarter. In one of the coming months we will buy a second car. It will cost 100-150K. Though I don’t like to have two cars from an environmental standpoint, public transportation on the countryside in Denmark is so bad that it will take too much time away from DS when we will both be working again. Prices of electrical cars has gone down so I think that we will get a descent one within that budget. The problem with two cars is also that I will use more time for maintenance.
In the end of the year I will recalculate our goal. I have looked into my pension plan and it seems that I have already saved an amount that will cover a good chunk of our expenses when I will be eligible to withdraw (+65yo). Our pension plans are not included in our goal so it can probably be adjusted a good bit down. And I will have more data to get a more realistic FIRE budget than when I did our first FIRE budget a couple of years ago. Having DS will of course make it a more difficult calculation as we would have to take care of him the next 18y at least.

Zettelkasten and GTD
Obsidian files: 244 (+105)
I have used it more but very periodically. I would like to be more consistent because the notes is very useful and helps me to get a better overview when I write research manuscripts.
GTD: My goal of less social media has been going up and down. I have been away from youtube for several weeks and tried also to minimise facebook but when I don’t have a lot of energy due to all the babystuff I often use those as entertainment as they are easier when you only have short breaks. I have some ebooks on my smartphone that I have been reading but not consistently. I don’t use facebook or youtube on my phone as I don’t have a good adblocker and hate all the ads.

Weight
Hit my goal of losing 0.5 kg per week. I focused mostly on diet and it was tough to combat cravings. The process have helped me understand my nutritional needs in calories and how to use a bit of intermittent fasting (usually skipping breakfast). I have included burpees (with push-up) in my workout rutine which I think have improved my cardio.

73.9 - 19/4-23
73.4 - 26/4-23
71.9 - 3/5-23
72.3 - 11/5-23
70.8 - 17/5-23
70.5 - 25/5-23
70.4 - 31/5-23
71.4 - 7/6-23
70.1 - 14/6-23
70.0 - 21/6-23
69.9 - 28/6-23

Bonde
Posts: 70
Joined: Mon May 31, 2021 5:21 am

Re: Great job but... A Danish FI journal

Post by Bonde »

Short update.
We are tired parents trying to keep up pace with DS (see here). Work is great. Besides clinical work I am involved in many interesting projects.

2023 results:
Liquid assets / FIRE goal: 47.4% (+3.8).
Pretty good since we also bought another car which took all of Q3s surplus.
I have not calculated SWR yet.

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