Monthly Reports

A Singaporean’s Financial Independence Journey – August 2017: First Milestone Reached

Mr Life CEO - A SINGAPOREAN’S F.I. JOURNEY AUGUST 2017 MILESTONE- F U $

It’s amazing how time flies when you are forcing yourself to churn up an update every month.

Well I guess it’s also a reminder that at least all this time is spent working towards something, rather than let time slip by without any progress towards a meaningful goal — and what can be more meaningful than buying your freedom?

So once again, for the month of August, I present, the monthly update!

This month is special. I’ve hit my first milestone of Financial Independence!

 

Key Statistics

Here are the key statistics for this month.

As per last month, the figures indicate Year-To-Date averages for myself as well as when combined with Mrs Life CEO’s.

Stats / Average YTD till August 2017SoloVarianceCombinedVariance
Net Worth:$93,999.21+11.62%$138,736.72+4.93%
Savings Rate:53.61%+3.95%52.18%+4.58%
Expense:$3,688.30-3.26%$5,361.513.73%
Actual Return:4.83%+0.15%3.86%0.2%
I/We can stop working for:24 months+9.09%28 months+16.67%
Passive Income / Month:$167+17.89%$222.46+16.32%
F.I Ratio:4.53%+0.81%4.15%+0.72%

Pretty good so far, with green variances across the board.

Guess what? I’ve amassed my F U $!

I now have the choice to stop working for 24 months if and whenever I feel like it! If we take into consideration Mrs L.CEO’s numbers, the both of us can call it quits tomorrow and still go about our current lifestyle for 28 months straight! Just what do we do with that 28 months? Figure out what we really want to do with life? Go for a long sabbatical? Do something we’ve always wanted? As long as it doesn’t tip the balance of our current average monthly expenditure, its all gooood!

Now that’s power money is SUPPOSED to buy!

 

The Journey Towards Financial Independence

Here’s my personal outlook with all the different milestones of F.I.

Mr Life CEO - FI Target Chart - Aug 2017

Since returns for this month increased only by a minuscule 0.15%, we can see the power of how a slight increase in savings rate can literally shed a couple of years needed to attain F.I.

From last month’s report, F.I. can only be achieved at age 50. This month, with just an increase of 3.95% in average savings rate from year-to-date and if this keeps up, I can literally take 2 years off and achieve F.I. at 48!

Assuming income remains unchanged, the effect of a sustained increased savings rate is two-fold — apart from the obvious accumulation of more net worth, it also reduces the total amount needed for financial independence.

I have 3 more months to go in order to get the full estimate of my average monthly savings rate for the year, then I’ll know for sure what is my benchmark — assuming all things remain equal and there are no additional unexpected commitments.

 

Towards F.I. As Life CEOs

Now let’s take a look at the numbers when the Life CEO family puts everything they have together.

Mr Life CEO - Combined Target FI Chart - Aug 2017

As you can see, the story is the same for our combined net worth.

This month, our combined net savings rate increased by a whopping 27.08%. Ok disclaimer, this may not be a sustainable long term figure and it will most likely drop next month — but it does give us a sneak preview at the difference it would make should we be able to keep this going.

Why is this not permanent?

Now, the reason for the increase was due to some additional income from Mrs L.CEO’s side hustle, as well as her getting rid of a bunch of rags she was no longer wearing, by selling them through Carousell. The Missus managed to nab over $600 of additional income through a couple of semi-permanent make-up gigs. Her Carousell sales? After getting rid of a whole bunch of clothes at rock bottom prices ($1-$5 per piece), she was able to raise another $120! Not to mention freeing up a whole lot of wardrobe space in the process! #ClutterIsBad

So what did an increase of 27.08% of savings rate equate to?

F.I. by 47! That’s FIVE years earlier than the projection made last month!

This shows the power of a side hustle. If the side hustle can consistently provide you with a stable income on top of your day job, you can potentially shave off a couple of years in your journey towards financial freedom! However, do consider that it may wear you out, but hey, if you have the energy now, better not to waste it — or alternatively, build a passive income stream.

 

Where We Stand

So how much of our lives can already be fully funded by the dividends and interests of our net worth?

Mr Life CEO - FI Milestones - Aug 2017

Not surprisingly, it doesn’t look like much different from last month’s chart — still working on getting family expenses fully funded. Perhaps I should compile this chart into like an animated gif once I’ve collected 5 years worth of it, because I have a feeling this one’s not gonna be changing significantly every month.

Is it me or does the green column look slightly taller this month?

You can refer to last month’s report to get an understanding how this chart came about. In general, the categories are items that have non-discretionary components based on the average spent from the beginning of the year-to-date.

So what did I spend on?Mr Life CEO - Expenses Aug 2017

As you can see, I’m a pretty simple person who just can’t do without food and family. For expenses that recur monthly, I track them with a budget.

Mr Life CEO - Budget Aug 2017

I must say, keeping a budget and tracking my expenses certainly did put my life into order without me having to wonder where all my money went. I don’t know about you, but I strongly believe everyone has this problem. Therefore, do up a budget if you’re serious about achieving F.I.!

Do you know what you are spending on? What does your budget look like?

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