Monthly Reports

A Singaporean’s Financial Independence Journey – May 2017

MrLifeCEO - A Singaporean's FI Journey - May 2017

Well, I’ve finally got about doing it.

My first monthly report to track my progress towards Financial Independence. Hopefully someday, someone will find this useful as encouragement that I had been where they are currently at.

Hopefully, I would’ve already reached FI by then.

So anyway, expect these monthly reports to come out as scheduled.

I hope to churn them out much earlier than in the middle of the month like this!

#LifeFullofHopes

 

Key Statistics

Here’s a couple of key statistics where I’ll be comparing with the previous month’s performance.

Net Worth (as of 31st May 2017):$72,106.60 (+11.57%)
Savings Rate:69.97% (+10.5%)
Latest Total Expense:$2,932.14
Actual Return:3.80%
I can stop working for:20 months

As you can see from the table and chart below, I’ve actually been tracking my income/expenses since July 2016. Of course, I believe there may be some tracking error, but I make every effort to keep all the numbers as accurate as humanly possible.

Do note that the savings rate is post CPF, as I did not include CPF as part of the evaluation.

Net Worth Savings Rate May 2017Since this is the first monthly report, best to start addressing the elephant in the room. The massive dip in savings rate and net worth in March was due to my annual life insurance premium. However, I take it as an investment as I’ve devised a means of taking a loan from myself to derive the savings from paying premiums annually rather than monthly. This savings will be treated as interest earned on the loan for myself.

The month of May was yet another transition in my working career. I had a week’s break after leaving my old company before starting the new one. Having had my last day towards the end of the previous month of April, I was able to get close to the full month’s salary. Also got my balance leave en-cashed and coupled with the increased salary of the new job, 3 weeks of work in the new position got me close to a month’s worth of my previous monthly income.

So overall, even with a week’s break, I came up tops with regards to income, hence the boost in savings rate and net worth.

 

Net Worth Mileage

This is where hypothetically, if I were to somehow lose my job tomorrow (considering it will be such a massive failure, having just started in this new role), this is how long my net worth as of May 2017 will last on the average expense and actual returns of my portfolios.

I currently maintain a Permanent Portfolio (held physically and in CDP/banks) and a Variable Portfolio (held in my SRS account).

As of May 2017, I can last 20 months on an average expense of $3,678.99 per month.

Net Worth vs Average Expenses and Actual Returns May 2017

 

Expense Distribution

So what am I spending on?

Distribution of Expenses May 2017

 

A good chunk is money given to my parents and wife. My own personal F&B requirements comes a close second which includes the occasional dining out with the missus or the family but excludes meals I had during work, which is tracked via a separate category.

Since there are expenses incurred just by going to work (close to 10% of my monthly expenses), if I were to really lose my job tomorrow, my total expenses may lower, which could push my net worth mileage even further.

The month of May was terrible for my health. Lost my voice for nearly a month due to a bout of flu, then just after I’ve recovered, caught another one which knocked me out for another 3 days. You know what? I had a flu jab the month before and yet still managed to get hit twice! That’s what happens when you come into contact with people everyday.

I’ve switched over my wife’s and my own mobile plan to Circles.Life 1If you’re considering switching as well, here’s a code that will give you $18 off your sign-up fees! PRZHB. Figured that we needed more data and they offered it for much cheaper than our current data plans anyway. The cutover period incurred additional costs as the existing and new plans overlap, but it should end up cutting our mobile expenses in the subsequent months as billing normalizes and the extra charges from M1 and Starhub are refunded back to us.

 

The Road to FI

Here comes the most important point for these monthly reviews. How much more to go?

Target to FI as of May 2017

Answer: Still a long way.

Assuming the current returns of 3.80% p.a. and savings of around $36.5k/year, it seems like it will be around the year 2036 before I can live entirely off the interest generated. #SoMuchForFIRE

Seems like FI is another 19 years away, which will make me 53 by then. I guess its not too bad compared to the average, who may be fretting over whether they meet the Basic Retirement Sum in their CPF for withdrawal at age 55. I should already have enough to live off the interests generated by my investments outside CPF.

Looking at this, there are still many questions in my head.

  • Is my Permanent Portfolio dragging my returns?
  • How much CPF will I have by 53?
  • How much will CPF life be able to supplement my monthly passive income?
  • How about declaring FI a few years earlier and start drawing down on my net worth until CPF life kicks in?

These will be questions to be answered next month while I take the time to figure these out.

Anything I’ve left out that will be nice to include?

Footnotes   [ + ]

1. If you’re considering switching as well, here’s a code that will give you $18 off your sign-up fees! PRZHB

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