Monthly Reports

A Singaporean’s Financial Independence Journey – September 2017

MrLifeCEO - A Singaporean's FI Journey - September 2017

I’m late on this one.

Work has been exhausting. Not because of challenges with the work itself, but challenges with people.

People are lazy. Period. It makes me wonder how much real value is actually being generated in the entire office workforce when companies are paying more than half of their employees to take tea/smoke breaks, organize useless meetings, pushing emails that do not produce any outcome other than to get someone else to do the work or just simply, to avoid generating any real value for what they’ve been paid for.

Then there are folks like myself who actually want to get things done, but inevitably get sucked into an endless political battle, fought with long emails and coming up with extra processes to prevent ourselves from being exploited. How much time is left for real satisfying work?

At the rate that I’m going, I fear becoming one of them.

It always start out as self-defense but eventually, when the dust settles, there simply isn’t much time left for productive work.

How do people put up with this for 20 or 30 years?

I know I can’t — and that’s what’s driving me to continue monitoring my monthly progress towards freedom.

There’s quite a number of changes with this month’s update.

The Journey to F.I section will be dropped for now. Perhaps I’ll publish it on a year to year basis (on my birthday?), or when there is a major windfall or dip in my net worth. Tracking it for the last few months has stabilized the average of my income and expenses so there won’t be much changes in the projection on a month to month basis. It’s just not that exciting to watch it every month when nothing much is changing.

 

Key Statistics

So on with the key statistics for the month.

This month, I’ve decided to put an extra chart to show the combined financial statistics of the Life CEOs to supplement the section on the combined monthly statistical snapshot below.

Stats / Average YTD till September 2017SoloVarianceCombinedVariance
Net Worth:$96,352.15+2.5%$146,291.38+5.45%
Savings Rate:53.92%+0.31%53.47%+1.29%
Expense:$3,747.41+1.6%$5,292.85-1.28%
Actual Return:6.04%+1.21%4.62%+0.76%
I/We can stop working for:25 months+4.17%27 months+3.7%
Passive Income / Month:$161.97-3.01%$213.70-3.94%
F.I Ratio:4.32%-0.21%4.04%-0.11%

Mr Life CEO - Combined Financial Statistics - Sep 2017

The average combined savings rate took a slight dip in September. So far, we’ve not tried pushing this to 70% and beyond and considering we’re not really making any drastic frugal lifestyle changes at this moment, this is to be expected. Right now, it’s just making sure it doesn’t get any lower than 50%.

What’s encouraging is seeing our combined F.I ratio slowly creep up from the floor, like a small seedling (the use of green here was purposefully intended). This ratio measures our average monthly passive income against our average monthly expenses starting from the beginning of the year to date. At the current level, we can cover up to 4.04% of our average monthly expenses with the average passive income generated from our investments. This figure will be something we’ll be watching very closely.

As both of us are maintaining a Permanent Portfolio each, a considerable portion of our net worth is held in gold and bonds. The former is non-yielding and the latter is low-yielding. There is definitely space for accelerating passive income growth but I’m still struggling with whether chasing yields is worth giving up safety and stability. So far, our Permanent Portfolios have shown great resilience to negative world events that have been happening recently — case in point, North Korea, Donald Trump and China.

To counter that horrible struggle, I’ve already started a variable portfolio where I dwell into riskier investments. Since September, I’ve lowered my monthly contribution to my Permanent Portfolio from 20% to 14% and channeled the additional 6% to my variable portfolio. That’s on top of any other extra savings left by the end of the month, after contribution to my various fund buckets. My variable portfolio currently consists of REIT investments held both in SRS and normal trading accounts, STI ETF in normal trading accounts and the newest addition in August — Cryptocurrencies.

Cryptocurrencies are VOLATILE and definitely not for the faint-hearted. To illustrate this, consider the daily movement of my variable portfolio after adding cryptocurrencies into the mix in August.

Mr Life CEO - Variable Portfolio Daily Change

You can see the massive increased variances in spikes and dips after the addition of cryptos — at its peak and bottom, only 7% of the portfolio was in cryptocurrency!

If this sort of daily movement happened to my entire net worth, I am guaranteed to be sleepless for many nights and it’s statistics like these that makes me glad to hold more than half of my net worth in a Permanent Portfolio.

I’ll still continue buying into cryptocurrencies. Why? Because I believe in it — but only with a small portion of my savings on a weekly basis.

Perhaps my next short term goal is to hold 2 years worth of living expenses in my Permanent Portfolio before channeling 100% of my monthly savings into my variable portfolio.

 

Expenses

This month, I’ve decided to bring back my monthly spending chart.

Mr Life CEO - September 2017 Expenses

A former colleague held a wedding at the Fullerton Bay hotel, that’s a black-eye right there, considering there’s no chance of me ever getting that angpao 1Red Packet – Asian culture of packing money in red paper envelops as gifts during Chinese New Year or other auspicious occasions back since I’ve not known him to have invited him to my wedding 4 years ago.

Then, there’s the missus’s birthday coming up next month and I blew $585.00 + $56.15 on a Nintendo Switch with Mario Kart 8 Deluxe for her. Anyway, she wanted one of these Smartboy devices that can turn a Samsung phone into a classic gameboy. I figured, considering she’s an iPhone user, rather than buying a Samsung phone plus a Smartboy (which doesn’t make sense since a Gameboy would be much cheaper — if I can find one for sale), might as well get the Switch where we can BOTH have fun together. Worst case scenario, it can always be liquidated on Carousell for cash right?

Anyway both of these gifting events would’ve totally destroyed my Gift Fund. The wedding is undeniably a gift. However, the missus’s gift would probably bring me some entertainment value as well, therefore I’ve parked the cost of the console to my Shopping Fund and classified the game as part of my entertainment budget for the month.

A close friend of Mrs L.CEO is gonna have a wedding celebration in Taiwan in December. Yup, cost of air tickets for 2 under Travel. I’ll let the missus handle the red packets. Well, she’s homesick after all, so it’ll be a good time for her to catch up with family for a couple of days. Money well spent.

 

Where We Stand

I’ve realized that the previously month’s chart was way off in terms of calculations. The average expenses were not reflecting that as calculated from the beginning of this year, but was the average off the number of expense entries since 2016. In short, the data was just screwed up.

Having corrected the data for September, this is how we ACTUALLY look like in terms of where we stand.

Mr Life CEO - FI Milestones Chart - Sep 2017

Well, looks like a reality check, we’re actually a bit more short from where we thought we were previously.

Anyway, better to realize this earlier than later!

Footnotes   [ + ]

1. Red Packet – Asian culture of packing money in red paper envelops as gifts during Chinese New Year or other auspicious occasions

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