dull numbers journal

Where are you and where are you going?
10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Saving, living frugal, investing .... but what next? My plans? Covid pandemia has maked me to work from home for 13 months so far. I didnt liked it. I crave for former people interaction. I crave even for commuting. It made me to separate FI from RE in my FIRE plans. If retirement looks like current life, I dont want to accelerate it. Work gives you planty of possibility to cooperate with people, meet new people, forces you to leave your house, forces to mind how you dress up, forces you to evolve and even challenges you. And it all is good. So , old, good RE - bye bye.
This month also maked me look back about my carbon footprint and PV gains as it is 2 years after I decided to install one. If only there were no covid (and home office for me, my wife and kids) I would cover 100 % of my electricity nedds with photovoltaics, but covid rose up my electicity needs by 10%, so I can't say, I have 100% of electicity needs covered with Sun and sillicon cels.
NW: 268,009
Assets: 494,009
debts: 226,000
debts/assets ratio: 45,74%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Oh Wow,what a month. Everything happened then. First at all, I was vaccinated against Covid 4 weeks ago, and the second dose is waiting for me. Great.I feel safer. I can even thinking about holidays this year. But the most important thing is that I'm immune. I was sick in Nov 2020 so one dose of vaccine + being convalescent = makes me immune man. Of course,I will take the second dose. Astonishing things happened on stock market. Poland is still emerging market so former stock increases in develop countries avoid polish shares. Until end of April. Stock rise started this month, and it was solid ride. About 10% in main market. But my value-orientated portfolio perform even better. It was about 12%.
12% in one month!!! Now I have a new problem. What to do to do not lose this profit? I was lucky/stupid in March 2020 and bought some shares then. I did this decision in the worst moment of the first wave of pandemic, when stock prices were so low. I spend all my annual bonus that was paid for me at the 28th of Feb 2020. And now I can say - I doubled it. I was lucky, not wise. Now I want to be wise. I decided to devide my stock assets into 2 piles. One pile (55% of assets) will be invested by me in the same way as until now. Second pile (45% of asset) will be managed by asset management company. I want to protect my profits, but I dont believe to be lucky again. Stock prices are high. When to sell? Will I be enought determined to sell it? I dont think so. So almost half of me assets is now managed by professionals. I also sell some government bond to overpaid my mortgage. Inflation is rising, interest rates perhaps will rise soon.
NW: 305,023
Assets: 502,057
debts: 197,034
debts/assets ratio: 39,25 %

Der Leiermann
Posts: 36
Joined: Mon May 11, 2020 5:32 am

Re: dull numbers journal

Post by Der Leiermann »

Great that you made a handsome profit on your bonus, congratulations.

Asset management companies can be worth it if they outperform your portfolio by at least what they charge you in fees. What is the going rate for asset management in Poland?

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

@Der Leiermann, stock market in Poland is touched by politics, industry transitions and social transitions. There are many changes/reforms like, in Power Supply Companies (transitions from coal to renewable energy), in Banking area ( there are still FX mortgages in Poland with thousands of court cases), overpriced Gaming Sector - so we have a lot of possibilities and a lot of traps, with political actions involved. We are also in a retirement system transition. So investing in Poland reminds sailing on a burning ship during storm. March and April 2020 were the time I sell and buy every day. I put hardly everything on one card. I sold shares that lost 20-30% (from IT industry) and sector less infected by Covid, and bought shares that lost 50-60% (like banks, gas and electricity companies). I put all my money from growth companies to value companies. It was risky, stupid but turned out to be extremely profitable. My profit from 01.01.2020 to 28.05.2021 is 50%. From 200,000 PLN -> 300.000 PLN. Yes, my result outperform everything. Asset management companies profit in the same period (01.02.2020 - 28.05.2021) are 10% -20% depending on strategy. Blue chips index for the same period was ~3%, while wide market (all companies) was ~12%. So asset management companies overperformed big/medium companies index. Asset management strategies were less aggressive. I played extremely aggressive. I didnt believed that Covid is the end of the world, I regarded Covid as Black Swan, a possibility that happens once a 10 or 20 years. I realize now that I was lucky, not wise. I dont think so similiar opportunity happen in next 10-20 years. Also , now I want safety first, profitability later. I'm over 40, so I remember 2008 year breakdown, fortunately I didn't have many saving then, but I can see clear that stock losses are more dynamic than growths. In long run polish asset management companies are a bit (2%-5% yearly) better than ETF indexes but whole market is so shaky and fragile.

Der Leiermann
Posts: 36
Joined: Mon May 11, 2020 5:32 am

Re: dull numbers journal

Post by Der Leiermann »

Interesting insight, thanks for sharing! All those transitions and upheaval - while being outsized opportunities for losing money - probably present great upsides too. I hope it works out for you in the end, keep those dull numbers coming :)

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

And June is almost over, kids finished school and started 2 months holidays. Second dose of vaccination is behind me and 'no clouds on the sky'.Polish stock market reached his record, so the question 'how to protect money' is even more accurate right now. After 1 month of asset management of 40% of my asset I can see - they have different strategy. My portfolio behaved a bit better this month than asset management, they policy is 2/3 in stock and 1/3 in bonds/cash, but my policy is 100% stock. My portfolio composition is more risky. But beside 'retirement' stock-orientated portfolio I also have 100% of coverage of my first mortgage (for house I live in) in government bonds ( interest for polish government bonds is related with inflation - ~ 4%, but mortgages are related with Polish National Bank interest rates which are 0,2% plus 1,8% margin) - so it is profitable for me not to overpay my mortgage but keep money in Government Bonds. It will not last for ever - but now it gives me ~ 1,5% a year after tax. As I mentioned before I also have a small studio for a rent. Rent profit went down in last 15 months, but still above mortgage interest rates. I bought this studio last year with 20% of my share and 80% of mortgage (second mortgage for this flat). I pay ~450 a capital a month and ~200 interests and my flat income is ~460 after tax, so it is double of the amount of bank interest (2 x ~ 2%), so flat rental profit is about 4% a year or 2% above bank interest. I do overpay my studio mortgage with flat profits. So my 'money cases' are quite complicated , but still profitable for me.
End of June numbers:
NW: 314,150
Assets: 510,647 (excluding studio and house)
debts: 196,497
debts/assets ratio: 38,48 %

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

There are some thoughts that came to my mind on this warmy summer.
First - diversification. That was not a case for me up to now. I considered my portfolio as a small one and didnt see a need for it. But, slowly month after month my portfolio became bigger and now I see a need to do this.
This is going to be a slowly process (up to the end of this year) and will include both a geographical diversification and a variety diversification ( i Thing about commodity founds). I also consider a life-cycle founds. Stock market in Poland has come across a significant development in recent 5 years and I need to adjust to it. Now I have much more possibilities than I had 2-5-9 years age.
Second - 'the worst scenario' - my death. How can I help my wife to deal with all the money staff. Of course she will inherit everything but she is not so fluent about money. She knows nothing about shares, she doesnt know what and when to sell. How to prepare her (or) assets?

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

I have come up myself with a solution for my problems/questions. And this solution comes from IT world. Educate, automate and simplify. You can't solve the problem if you don't understand him. So I need to educate my wife. But stocks/assets knowledge is extensive. I don't think me to be a good and wise teacher. So, first I need to simplify. Simplify both saving phase and withdrawal phase. I make both of them to be as much automated as it can be. So - no raw stock investing. But when to sell? Next week? Next month? I need to do this in steeps.
To make all of this happen I set a 10 months plan. To convert my saving. To establish 'anti-shock' found. To overpay mortgages. It seems to be 10 months of transition from my current world into more predicable world.
Savings are great, saving ratio too.
NW: 323,695
Assets: 519,660 (excluding studio and house)
debts: 195,964
debts/assets ratio: 37,71 %

User avatar
Bankai
Posts: 986
Joined: Fri Jul 25, 2014 5:28 am

Re: dull numbers journal

Post by Bankai »

What do mean by no raw stock investing? No individual shares or no stock market at all? Stock market in PL is one of the most undervalued in the world, so it's not the worst place to park your money. On the other hand, diversifying into a world tracker is always a good idea - are there any international funds you could move to? Generally I'd only move out of stocks completely if it was obvious that a crash is starting or if I was buying something with a much better potential for return.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

@Bankai,yes stock market is undervalued because of many reasons. Both political (huge influence of State), economical (predominance of 'old' economy), social (no saving habbit among people) and traditional (popularity of big state-ovned or small-family-ovned companies, both reluctant to pay dividend). And Yes diversification is always a good idea, but , I fought my assets to be not big enough to diversificate and I was not mature enough to think about it.
But this had changed, so I started to do it. I dont want to perform any fast movement, to not to meet 'wrong' date of this action. But, I dont see only negative future for polish stock market. It is changing, slowly, but changing. Economy is changing, people are changing.
What do I mean by 'raw stock investing'? Buying and keeping shares on my brokerage account. What is 'no raw stock investing' - investment founds or asset management. Sorry for not being understandable.
I do continue to do both geografical and investement type of my assets and can even do some quarterly summation.
It was againg when 'my portfolio' defeat asset management 'portfolio'. My part (35% of all) is still more risky with 100% in shares and growth for last 3 month is about 9%. Asset management (25 % of all) portfolio is more balanced what I saw from quarterly report I had received. Their part brought me 4% of profit for last 3 months. Third part (40%) of my assets is in 'founds of founds', and it brought me humble 2% of profit for last 3 months.
So, what to name it? The power of diversificaion or the weakness of self-confidence? Yea I know, high self-esteem is a recipe for a failure.
NW: 332,911
Assets: 538,340 (excluding studio and house)
debts: 205,428
debts/assets ratio: 38,15 %

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

That was a great month. Especially to my wife. She was promoted to kind of Expert position and offered ~ 30% pay rise. Good for her, she deserved for it. This promotion make us to talk about money. I asked her if she wanted to change something in our spending habits. She denied it. We still 'save as creazy' and this pay rise bump our SR to 80%. Great result. I have never expected it.
NW: 341,904
Assets: 571,800
debts: 229,896
debts/assets ration : 40,20%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

With stock prices growing and stash of money climbing up it is the very first time I can/might think about RE date. 2-3 years ago I estimated it will be in 2024 year, but things changed to even more positive scenario. End of Year 2023 can be real date. Big surprise for me. It is so close that I started to feel concerned about it. RE means big changes in life. Am I ready for it? Should I quit well paid, stress-free job just to stay at home and do ... what?
Well, after years of heavy saving I will return to 'starting point' of this - Mr. Money Moustache, blog to seek for inspirations, to start thinking about new future. Fortunately there are post like from Apr 2015 - "Early Retirement Doesn’t Mean You’ll Stop Working".

2Birds1Stone
Posts: 1596
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: dull numbers journal

Post by 2Birds1Stone »

Hmmm, this is something you should shift your focus to asap. The goal of reaching FI shouldn't be to sit at home and do nothing, and it sounds like you've already identified the gap in identity once you're no longer an "employee". There's nothing wrong with leaving work and trying a bunch of things to see what you enjoy doing in your new life. Some people regret retiring "to" something which sounds like a good idea whilst working but ends up being terrible in practice.

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Yes, 2Birds1Stone, I need to prepare, but this will not be easy because of my ADHD. As a joke I said to my kids -'you will have to put my body to cremation, because otherwise I will be constantly doing sth in my coffin after dead'.
So, definitely I will not be a couch potato. There is a huge list of matters to do before my FI (RE).
But now I enjoy increasing savings and good life prospects. I have to do sth with my debts before RE.
NW: 352,138
Assets: 603,580
debts: 251,442
debts/assets ration : 41,65%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

For many years stress in work was my biggest problem. I'm sort of perfectionist man. I also recognized myself as a person with obsessive-compulsive personality disorder. It accurately describe myself: "excessive obsession with rules, lists, schedules, and order; a need for perfectionism that interferes with efficiency and the ability to complete tasks; a devotion to productivity that hinders interpersonal relationships and leisure time".
Maybe vast majority of people present here have similar disorder?
And money, lack of money was my most tense factor. I started my carrier at late 90' so it was a time of economic transformation in Poland, especially with high unemployment rate. So it all caused my money worries. Now I'm in my late 40', and after a years of hard work and heavy saving, my money worries are buried in the past for ever (I hope). It's not a FIRE a crave. It's a financial security. I done need to retire early. I need to have big financial pillow. And after years a I have it. I feel so good! I feel so secure!
NW: 364,080
Assets: 613,080
debts: 249,000
debts/assets ration : 40,61%

shaz
Posts: 420
Joined: Mon Aug 02, 2021 7:05 pm
Location: Colorado, US

Re: dull numbers journal

Post by shaz »

I know what you mean about craving security and a big financial pillow. Congratulations on getting your pillow big enough that you feel secure!

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

It's time to celebrate, it's my fifth anniversary on this forum, and you know what .... @Jacob was right. I can confirm his words : "If you're new here, this blog will give you the tools to become financially independent in 5 years". Incredible thing happened. 5 years of heavy saving, saving 60% - 80% of our (me & my wife) combined wages allowed us to be already or almost financial independent.
Thank you @Jacob for creating this blog http://earlyretirementextreme.com/hello ... aders.html, than you for creating this forum - to give us a tool to follow (and measure) FI.
I won't leave my job right now - I wouldn't kill the goose that lays the golden eggs.
(my corporate pension plan is very lucrative and I want to participate a bit longer).

Of course, this is not the end. It's a new beginning. It's a solid foundation for oncoming years.
On 'The Six Stages of Financial Freedom' i'm between Stage 3 and Stage 4, so some work is ahead of me - I need to eliminate all my debt (mortgage).
(https://www.getrichslowly.org/stages-of ... l-freedom/)

NW: 375,800
Assets: 619,800
debts: 244,000
debts/assets ration : 39,36%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Nothing new happened to me. Winter is not a pleasant season, no outdoor activities, just mundane duties. I spend 2-3 h a day learning , developing new skills and surprising for me I have no depression.

NW: 387,700
Assets: 627,700
debts: 240,000
debts/assets ration : 38,23%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Well, last month was good for me. I was paid an annual bonus and ... a special annual reward. I was evaluated as an overperforming mate at job. It happened to me second time during last 3 years. Special reward was ~5% of annual income - nice. Should I expect an promotion? Not so fast. Currently I work as a senior engineer and do some staff engineer tasks (like recruiting new people, mentoring ) and one level above is a Principal Engineer position and vast majority of engineers will not progress to this level. There in no staff engineer position in my company, and to be promoted to this position is hard. Principal engineer position is rare in my company, so it is not a piece of cake. But, maybe this promotion could be a final stage of my carrier? I do all my best to reach it, just to satisfy my ambitions. I also received a 15% raise in Q4 21. I still last with my frugal lifestyle, and bigger salary allowed me to reach 80% of saving ratio, or, in other words, I life for only 20% of my income. I feel happy, safe and fulfilled.

NW: 401,400
Assets: 637,600
debts: 236,200
debts/assets ration : 37,04%

10cents
Posts: 113
Joined: Fri Sep 15, 2017 12:42 pm
Location: Poland

Re: dull numbers journal

Post by 10cents »

Terrible thing happened last month. The war has started. I have never thought I can see a war, but it is. Was is 300 miles away from me. I saw thousands of refugees on railway stations. Sleeping, waiting for train transfer or waiting for someone they know to help them. The Ukrainians are fighting for their freedom, for my freedom, for millions of people freedom. I have supported them multiple times this month with donations. Poland is these days world biggest NGO and my duty is to participate in this.
On the financial matter there is a big change. We can expect high inflation and high interest rates. Currently in Poland main interest rate is 3,5 and further increases are expected. So real estate market will suffer. Our financial market in underdeveloped. Mortgages with fixed interest rates are in the minority. Both my mortgages are also with floating interest rates. So I started to do massive overpayment of my mortgages. I cannot predict stock prices, will they grow or fall, will I earn or loss. But mortgage overpayment is a basic path for me.

NW: 411,980
Assets: 635,180
debts: 223,200
debts/assets ration : 35,14%

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