Hi RIP voyeurs,
November 2016 is gone. Typing these words from Isla Mujeres in Mexico, with a sheetty internet connection but an amazing view and ~30 degrees Celsius. We’ll be back in Switzerland in few days where the only thing that won’t change will be the 30 degrees. Just… Fahrenheit!
As end-of-month routine I’m here showing my numbers and I’m really (positively) surprised by them. I thought saving rate would be bad this month and progresses would be minimal but, luckily, that was not the case. The market reacted incredibly well to the Joker election in the Divided States of America and our Mexico unplanned expenses are being low.
The reference document for the following considerations is my Net Worth spreadsheet. I’ll post a screenshot every month in these financial update posts.
Last month, despite a bad saving rate, we grew by a solid +13.3K EUR. I was wondering for how many months can we keep growing in the 5 digits world. The market is going to crash, the dollar is going to depreciate, my not yet nicely balanced portfolio is going to show its weaknesses et cetera.
No, November 2016 is the second best month on record by NW increase: a staggering +22.3K EUR! For the records, best month so far has been January 2015, when Switzerland unpegged the Swiss Franc from the Euro.
More important of all… I’m billionaire!
In Italian Lira 🙂
…But apparently not for Google.
Reasons for this amazing performance? Here are the major wins for November 2016:
- Euro dropped, Dollar skyrocketed again (pure luck).
- Great investments’ performance, especially the S&P500 fund (facilitated luck).
- Low expenses both in Switzerland (first two thirds of the month) and in Mexico (last third of the month). Almost 70% saving rate (merit).
- I got another unexpected550 CHF bonus at Hooli! Nice! It will be credited in December (merit).
- Another taste of freedom, traveling and relaxing in Mexico – more on this will come (planned).
- Few potential tenants are interested in my Milan apartment. I see high chances of finding a tenant during December and having it rented out by January (luck).
Losses of November 2016:
- I don’t see any. Well, Mexico trip was simply awesome and I’ll write about it soon-ish, but [Spoiler Alert] getting robbed, breaking a tooth, losing a flight and a luggage… well, that could be considered a loss!
- Pillar 2 Buy in of 20K done.
- 80% part-time request at Hooli is ongoing. Filled all documents, got manager and director approvals, need to wait for HR. Requested to start in January 2017. Let’s cross fingers.
- Switched health insurance provider for next year from Assura to Mutuel. From “Family Doctor” model to “Telmed”. Assura raised our insurances premiums and it’s no more uber-cheap. Given their sheetty service I’d rather spend few CHF more and get some quality. Plus, let’s experiment the telmed model, where you should always call their on-call doctor before physically going to a doctor. I think I’ll write a dedicated post about Swiss Health Insurance System (added to the infinite TODO list).
Income for the month was 16,729 CHF (cell N55), an above average month essentially due to stocks vesting.
- ~9,000 CHF my base net salary.
- ~4,500 CHF stocks vesting.
- ~2,200 CHF my Swiss pension Pillar 2 contributions.
- 1,000 CHF Miss RIP contribution to shared economy.
- 50 CHF Sold a used Machine Learning book to a colleague. I’ve plenty of valuable books that I don’t want to own anymore. I may sell them all. Is anyone interested in the whole Game Programming Gems series? 🙂
Total income in 2016 so far is 164,839 CHF (cell P55).
Average monthly income in 2016 so far is 14,985 CHF (cell R55).
Forecast for the end of 2016 is still ~190K CHF. Thirteen month, stocks vesting and bonus are coming in December! Expected ~25K CHF. No impact on NW forecast, since I’m already accounting for these credits (row 32).
No target set by end of year.
Total expenses for the month were 5,211 CHF (cell N56). Not that bad! Wait… I know it’s A_LOT but I thought I’d be above 6.5K, considering Mexico trip third tranche of expenses (Hotel in Isla Mujeres and all the food/gifts/tips/other expenses for the two weeks).
Here’s the detailed list of expenses (in CHF):
- 2613 – Travel & Transportation (Local, Trains, Planes):
- 2390 – Mexico trip. Major expense here is 1609 CHF for the luxury hotel in Isla Mujeres. 7 nights, roughly 230 CHF or 220 USD per night. Very expensive. But you get swans out of towels… What’s left (~800 CHF) is for food, beverages, some entrance fees, tips, gifts and money stolen. Total Mexico trip expenses so far are ~6.8K, spread over 3 months. Expected close to 10K, so I’d say it’s ok.
- 176 – Local Transportation. 165 of which are for my Swiss Halb-Tax abo renewal and 11 for local trains/buses/tram. I was covered by last month delayed monthly pass till Mexico trip and Miss RIP switched to annual pass. Very cool!
- 32 – Gas. We used Miss RIP’s car while in Milan, for secret project X.
- 15 – Tolls. Italian highways…
- 1440 – Flat rent (1300) and condo fees (140). Business as usual.
- 442 – Health Insurances (mine 213, Miss RIP’s one 229). As I said, we’re switching to a new provider and it will cost us more. In the range of 240 CHF per person (current raised our premiums to ~225-230 CHF). Good news, we lowered Miss RIP premium (it will be same as mine) from December on, due to accident insurance covered by her employer. We should have done that several months ago though…
- 126 – Utilities & Phone.
- 113 – Grocery. Ridiculously low grocery bill. We consumed what we had sitting in our fridge/pantry and survived with few grocery trips.
- 100 – Cleaning Lady. A single 4 hour visit this month.
- 100 – Clothing. I purchased a pair of high quality winter shoes I planned for something like… 2 years?
- 99 – Dinners Out. There’s actually no dinner in this list. A brunch, few visits to fast food while in Italy and an expensive Raclette & Fondue cheese purchase for a special dinner at home with good friends. I consider them in this category rather than “grocery”. Raclette and Fondue are awesome. I love them!
- 91 – Housing. Condo fees in Milan apartment.
- 55 – Health. Few medicines.
- 15 – Leisure. Few small purchases like videogames & post cards.
- 12 – Fees. Mostly bank fees and Interactive Brokers fees.
- 3 – Gifts. Finally a month with almost no gifts. Gifts expenses in Mexico are not included here though.
- <5 – Not tracked. Almost perfect.
Without Mexico we’d be below 3K, which is my “perfect expense amount” given current conditions. Awesome!
Total spending for 2016 so far is 55,364 CHF (cell P56).
Average per month: 5,033 CHF (cell R56). Still above 5K per month but I guess December will bring us below.
Forecast for End of year: 60,397 CHF (cell S56). Not scared anymore. We’ll make it for sure below 60K.
Target for End of the Year: 59,000 CHF. Let’s be aggressive. to reach 59K we have 3.7K expenses left for December. We have already paid for the December train tickets to Milan (16-18 and 24-27). We don’t plan having other extra-large expenses. We’re not going anywhere for end of year (friends will come visiting us). We can make it.
Savings & Saving Rate
Total savings for November are 11,518 CHF (cell N57). High income month, not very high spending… wow, 11K saved!
Yearly savings so far are 109,475 CHF (cell P57).
Average monthly savings are 9,952 CHF (cell R57). Getting back close to 10K per month, next month we’ll destroy that wall!
Forecast for end of year say 119,427 CHF (cell S57). But I bet on 10K more than that 😉
Saving rate for November is 68.9% (cell N58). Back on track!
2016 saving rate so far 66.4% (cell P58). Small improvement respect 66.1% of October. The platinum badge in Mustachian Post’s ranking of bloggers saving rate indexes is still far but not technically impossible.
Target saving rate for End of the Year 70%. To achieve that we should spend less than 2.5K and earn more than 25K in December. It’s a 90% saving rate, pretty tough. Spending ~4K with the same earnings would result in a 69% Yearly saving rate. Anyway, let’s aim for the stars!
Net worth at the end of the month is 528,261 EUR (cell N39 or P39). I had less than 400K at the beginning of this year… Wow!
Delta for November 2016 is +22,293 EUR (cell N40). Best month in 2016!
Delta Percent November 2016: +4.41% (cell N41).
The logo of this blog changed accordingly:
With a long jump of +2.23% toward the (cheated) big goal.
Net Worth cumulative 2016 Delta so far: +145,747 EUR (cell P40). It was last month’s forecast by end of year!
Net Worth cumulative 2016 Delta Percent so far: +38.10% (cell P41).
Forecast end of year 2016 Net Worth: 541.5K EUR (cell S39), +159K EUR, +41.57%.
Target for End of Year: ok, I’ve reached my Billion Lira and there’s still a month left. USD and Mr Market will surely crash… let’s more or less stick with the forecasts. 540K EUR.
Forecast for 100% FIRE: 36 months left (-4 months), i.e. forecast Fire Date is December 1st 2019, (cell T20). What? 3 years left? I cut 4 months in compared to last month! Well, let’s be honest: my investments are doing great so far but I don’t expect them to keep running at that pace. Plus, within these 3 years I’d like to slow down at work (waiting for 80%) and maybe RIP family will grow and need more house space. Maybe we’ll also review the actual “Million Euro” FU Number a little bit… Anyway, it’s exciting to track FIRE date and see it getting closer and closer each month!
Current Monthly allowance: 1,467 EUR (+62 EUR, cell T26). It represents how much I could withdraw indefinitely per month (at my desired WR) in case I decided to call myself FI today. This month I created another 62 Euro per month, forever!
Current Withdrawal Rate – Real: 10.61% (-0.35%, cell T29). This represents the WR I need to support current spending regime with my today’s NW. It finally got better this month because we increased our NW more than the actual yearly spending forecast.
Current Withdrawal Rate – Ideal: 6.31% (-0.28%, cell T32). This represents the WR I need to support my desired spending regime (lower than current, since I plan to retire in Italy and not in Switzerland) with my today’s NW. This went down, since ideal expenses didn’t go up but our NW did. When this number will match the desired WR (cell T11) we’ll be FI 🙂
Before the Mexico trip I left few bureaucratic things undone and I’m catching up with them. Things like Italian property taxes, health insurance change, internet provider analysis… Time to tackle bigger TODOs.
- Pillar 3a ~6.7K CHF. Need to find the right Pillar 3a where to invest. I don’t want to keep up with my crappy saving account (UBS Fisca). If I can’t find a better alternative I’d go for a saving account at PostFinance, where I have the shared account with Miss RIP and EUR&USD accounts. I don’t like the ETFs based Pillar 3a funds due to purchase fees, high TERs and the fact that they invest mostly in Swiss stocks. Plus, I may take the money out of Pillar 3 in 3-5 years so it may not be worth investing in crappy & volatile products.
- Stocks & ETFs – Strategy. I need to take time to think about a diversification strategy and, in general, an Investor Policy Statement (or IPS). Fiscal news say that today, in Switzerland, distributing is better than accumulating for funds holding securities traded in the US markets (due to dividend withholding claimable by a DA-1 form). Someone says that “world” based funds are better than manual diversification with few ETFs – but they have higher TERs. Someone says that the more the better (I have a friend that owns a lot of different ETFs). Someone says small caps are better than large caps. Someone says you can’t live without emerging market… A lot of information that needs to be processed and decisions that must be made. Ideally by end of the year. It’s still ok by end of January 2017, since I’ll get yearly bonus and want to invest it heavily.
- Stocks & ETFs – Numbers. I plan to have roughly 50K available to be invested by end of January 2017. December and January earnings will be huge (25K each). I plan to diversify by investing more, i.e. minimize selling current assets (but I’ll surely cut half of S&P 500 Tech ETF, row 7 of my NW) in favour of differentiating by buying other assets with freshly invested money.
I currently have account on 2 Swiss banks: UBS and PostFinance. I opened a UBS accounts family (a checking, a saving, a rechargeable credit card and a Pillar 3a saving accounts) on day 2 in Switzerland, back in 2012. I went there because they had special offers for Hooli employees. Two years ago I opened another position at PostFinance (a shared account with Miss RIP, a personal checking and saving account for Miss RIP, a USD account and a EUR account). I’m fine with that but I’d rather handle a single bank. Everything would be simpler. I’d like to close my UBS position, since it’s costing 10 CHF per month and providing nothing special. No rush, but I’d like to do that in few months.
- few ebills (health insurance, electricity, phone, internet) go directly to UBS, need to change that.
- I have a Pillar 3a account with them. Need to transfer that to PF. Not sure how it works.
- My only “credit-like” card is with UBS. Need to get a card from PostFinance or, like most Swiss do, get a Cumulus credit card with zero yearly costs and a personalized picture on it, cool!
I got contacted by several people interested in my apartment in November. Few of them disappeared but a couple of them are still interested. Renting it out would be great. I’ll invest some time to get this done.
Project X (still secret) needs to be resumed after Mexico, need to invest energies there too.
I had to slow down with posting in November, too many other things to do (aaaand 2 weeks in Mexico). I must admit I can’t write as much as I would like, for now. Life is too complex these days. I set the goal of writing one article per week (or 2 if I manage to make them shorter).
Anyway, even if I don’t publish I still see traffic on my blog, which is both awesome (people like what I write) and awful (I want to write more and I don’t have time).
I’ve been contacted by people asking for my help, which is what makes me feel so good about what I’m doing with retireinprogress. I had more joy thanks to this blog in 5 months than in 15 years engineering career.
I’ve been added to a monevator list of FI blogs after few people protested for my absence from the first draft. What to say… read the previous sentence about joy. Since then visits to my blog spiked for a while. Again, both awesome and awful. I want/need to do more!
“hey RIP, how was your Mexico trip? I just came here to hear about that.”
Oooh, I was missing you my friend! Keep following, Mexico trip report is coming next week 😉
That’s all for this month!
How was your November?
Wow. You’ve spent 3k less on Mexico than planned… Congrats! What will u do with them?
Hi W, yep I even tried to overspend there but no way, Mexico is very cheap!
For “what to do with the extra 3K”… I’ve never really understood this kind of questions. Every money that shows up for me are added to the same bucket of “my net worth” and then triaged according with the algorithm (a.k.a. invested/saved/whatever).
Sounds like a top month…! A Mexico trip is always great.
Numbers are going in the right direction, gives a great feeling, doesn’t it?
AS for your investingg question in ETFs. Yes, people say a lot… hard to make up your mind. You have to find out what you believe in and what makes you sleep well at night… I beleiev in diversification of stock. This can actually be done with one ETF that buys the whole world. Simple: done. Rather, I choose to put a little more EU i, to add some small cap and to make sure I have Emerging. All in all, 3 ETFs. Easy to maintain in my view. When you want to know what is best: I will answer you in 40 years: then I will know if I was right… :-). In the mean time, I do sleep well…
the more diversification is implemented within a fund, the higher its TER. Anyway, I’ll set some time to think about it and do my math!
Hi RIP, are you going to convert your S&P 500 ETF from accumulating to distributing ?
I too have only the ETF accumulating version; I thought it was better – for me – to get the interests automatically reinvested, on one side in order to spare the “buy” costs connected to the reinvestments, on the other not to lose interests during the time where I’m waiting to collect enough dividends to balance the “buy” costs…
I might switch – for the new purchases – to the distributing ETF, but perhaps the sell/buy costs of the existing ones are not worth the possible gain (for sure it also depends on how much you have invested in that ETF, in my case only about 15k…).
What do you plan to do ?
Hi Weirded, I don’t actually know. Converting funds costs 2 trades. I have ~280K CHF invested and even with cheap 0.1% InteractiveBrokers trade fees it’s 280 CHF to sell and the same to buy… I don’t want to change investments every time a new paradigm emerges. What if Swiss tax authorities change how funds are taxed next year?
Anyway, I didn’t pick accumulating to save money on reinvestments, it’s a very marginal benefit with a broker like IB. I did to avoid dividend tax withhold hard to claim, but that’s no more true. And I like the idea of dividends, it makes me feel like I “get something” from my portfolio, it’s an “income”.
As I previously said, I need to sit down with myself and come up with an Assets allocation strategy.
What kind of rent could you get for the Milan apartment? 300 euro per month + spese?
I’m aiming to 400 + costs.