September 2016 Financial Update – “Shame on us” edition

Hi RIP voyeurs 🙂

September 2016 is gone. Still nice weather in Switzerland, I guess it’s the hottest September ever seen. As end-of-month routine I’m here showing my numbers, with slightly less proud compared to last month, where we saved more than 80% of our income.

Disclaimer: I’m keeping my FU Number at 1,000,000 EUR instead of the 1,200,000 planned by reducing yearly allowance to 33,333 instead of 40,000 and keeping WR at 3,33%. Nothing is fixed in stones and these numbers are still WIP.

The month in brief

The good news: I got a nice unexpected bonus of 600 CHF (gross) at Hooli 🙂 The payment won’t be in September paycheck but in October one. From a NW point of view I credit this bonus (estimated 400 CHF after tax) on this month. From a cash flow point of view, it will appear next month.

The bad news: A shitload of money spent. I feel discomfortable with that. Ok, we have excuses. Ok, 2K EUR were for Mexico flight tickets. Ok, ~750 CHF were for Miss RIP yearly transportation pass. Ok, 400 EUR were for Miss RIP’s bike, a purchase planned since 3 years… A lot of “ok, but” but when you sum those expenses up you get this scary “above 7 thousands” that just… feels wrong. All friends back from summer vacations, several dinners out or other events (movie theaters, festivals, events, events everywhere). Planning trips like crazy for next 3 months (more details here). Other bad news come from the market performing poorly and both the USD and the EUR dropping few points against the CHF, which makes me richer in EUR and USD but poorer in CHF.

The reference document for the following considerations is my Net Worth spreadsheet. I’ll post a screenshot every month in these financial update posts.

The NW spreadsheet improved a little: I added few columns on the right with averages, forecasts and FIRE numbers. Including a “Months left” which is literally becoming my obsession, for a valid reason: at the beginning of the month it said 38 months to go and at the end… 39! No surprises with these high expenses and reduced saving rate.

Overview

[Note: I decided to switch main metrics in EUR, since it’s the target currency for our progression. Yes I know it’s kind of lame, since this months metrics in CHF look sheetty :)]

Last month we had a nice +12K EUR, this month we achieved +11.5K Not that bad, after a crappy mid-month market reaction and considering these high expenses. This is mostly due to EUR dropping few points against CHF and remaining flat against USD. In fact seen from a CHF point of view we only increased by 8K.

Major wins of September 2016:

• Small Bonus. 600 CHF, unexpected, as mentioned before!
• Another Hooli stocks vesting package. Next big one will be in December along with13th month and yearly bonus. Too much all together.

Major losses of September 2016:

• Milan’s apartment is not rent out. Second wasted month in a row.
• A lot of costly social activity, our friend circle is not frugal. I do my best to limit social expensive activities and/or pushing toward frugal activities but it’s a very tough job.
• A lot of travel planning, my inbox is full of train/plane tickets: Rome, 2x Milan, 1x Mexico, plus Miss RIP is going to Milan the 2 weekends I’m walking the Appian Way. Plus we’re probably going to Milan again for Christmas and somewhere else for Last Year Evening. A lot of tickets. Plus some airbnb for my Appian Way trip.
• We’ve been so busy we had to give up on something, no intelligent grocery shopping but almost a visit to Coop/Migros everyday, Outsourced cleaning activities to a cleaning lady, few extra dinners out instead of MrRIP awesome pizza at home.
• Stock Market performed poorly (but not dramatically). Two out of three funds I own lost a little bit (S&P 500 and STOXX Europe 600), while the warhorse of my portfolio (S&P 500 Tech) keep going up (+20% since February 2016). In September I’ve globally lost a little bit of money, mostly due to USD and EUR depreciation. I can’t imagine what will happen (because it WILL happen) to my health when I’ll experience a two digits market loss.

Other facts:

• Miss RIP’s contribution for the month has been 2,000 CHF, due to extra “internal taxation” for Mexico trip. As I explained previously, we pay taxes in our shared account in 3:1 ratio. We payed 8K this month (4K extra), 6K by me and 2K by Miss RIP.

Incomes

[Note: I keep Income section in CHF, since we’re both earning CHF]

Income for the month was 15,194 CHF (cell L55), an average month thanks to Hooli stocks vesting and extra Miss RIP contribution. Income components are:

• ~9000 CHF my base net salary
• ~2000 CHF Hooli stocks vesting.
• ~2000 CHF my Swiss pension Pillar 2 contributions
• 2000 CHF Miss RIP contribution to shared economy
• 45 CHF for selling an item 🙂

Total income in 2016 so far is 134,801 CHF (cell P55).

Average is 14,978 CHF per month. Almost unchanged since last month.

Forecast for the end of 2016 is still ~190K CHF. No surprises here. Well, actually the linear forecast says 179,734 but I explained that December will drastically be nonlinear.

No target set by end of year. As I previously said, I’ll try to set an income target for 2017 later this year.

Spendings

[Note: I keep this section in CHF too, since we mostly spend CHF]

Total spending for the month was 7,137 CHF (cell L56). Highest month on record. And we’re still missing Mexico trip lodging, eating and tour guide. Expected another ~5K EUR between October and November. Other expensive months are coming…

Here’s the detailed list of expenses (in CHF):

• 3707 – Travel & Transportation (Local, Trains, Planes). Yes. Unbelievable. Let’s break it down:
  • 2368 – Flight tickets. 2000 EUR 2x roundtrip to Mexico. I know it’s crazy expensive, but try to flight from any Swiss airport. And no, we tried to optimize by selecting other airports but… not worth the time loss. I’m poor of time today. When I’ll be FI I will fly on Wednesdays from Poorcountry Airport. 192 EUR 1x roundtrip to Rome.
  • 859 – Local Transportation. Mainly Miss RIP yearly local transportation pass, plus other local Swiss trains
  • 310 – Other Train Tickets. Mainly to Milan (2x roundtrip MrRIP, 4x roundtrip Miss RIP), few local trains in Italy.
  • 129 – Airbnb. A night close to Bergamo. A night in Formia.
  • 33 – Gas. We used Miss RIP parents car in Milan.
  • 8 – Tolls. Italian highways are not free.
• 1440 – Flat rent (1300) and condo fees (140).
• 445 – Stuff. Bought a bike for Miss RIP, bought special honey while in Italy.
• 442 – Health Insurances (mine 213, Miss RIP’s one 229). I have time till end of November to change insurance company for 2017. We want to take action here, since we’re probably going to change insurance company, insurance model (telmed instead of family doctor) and deductible (probably lowering it to go to doctors more frequently). This will end up with an increase in monthly premiums…
• 273 – Groceries. I thought it was going to be worst…
• 242 – Dinners out (several episodes). Too many this month. A lot of social events.
• 200 – Cleaning lady. 2 Fridays, 4 hours per Friday, 25 CHF per hour.
• 146 – Utilities. Energy. Television, Internet, Phones.
• 91 – Leisure. Two movie theaters night, some purchases while on Hooli Offsite
• 90 – Fees. 35 EUR for late communication of Milan’s apartment rent contract cancellation. 15 CHF to send the cancellation form by traditional mail with return receipt… yes, Italian bureaucrazy. 10 CHF for banking fees. 25 EUR for asking the Hooli Offsite Hotel to send me back my Timberland shoes I forgot there 🙁
• 56 – Gifts. Too many birthdays!
• <10 – Not tracked. Nice.

Now that I think about it, if you remove one-off expenses like the Bike and a little bit of transportation costs we’ve done good, on path. Grocery and dinners out are ok, really. That’s the amazingness of doing budget: you discover where your money really goes (or “actually went”), which most of the cases is not where you expect.

Total spending for 2016 so far is 43,625 CHF (cell P56).

Average per month: 4,847 CHF (cell R56). Shame on us.

Forecast for End of year: 63,000 CHF (cell S56). Same as last month. Actual math says 58K but  we know there are still at least 5K left for the Mexico trip.

Target for End of the Year: 60,000. We can make it. We have still ~16,500 left before reaching that. We’ve accounted for most of the travel expenses and if you consider another 5K for Mexico we’re still left with ~4K per month. We can definitely do it.

Savings & Saving Rate

Total savings for September is 8,057 CHF (cell L57). Still looking good.

Yearly savings so far are 91,174 (cell P57).

Average monthly savings are 10,130 (cell R57).

Forecast for end of year say 121,565 (cell S57).

Saving rate for September is 53.0% (cell L58). Shame on us. Below current 2016 saving rate of 67.6% (cell P58), and getting far from the platinum badge in Mustachian Post’s ranking of European bloggers saving rate indexes. I still set my Target for End of the Year to 70%.

Net Worth

Net worth at the end of the month is 492,656 EUR (or 536,308 CHF or 552,087 USD).

Delta for September 2016 is +11,529 EUR (+2.40%), or +8,062 CHF (+1.53%), or +15,197 USD (+2.83%).

An average month. The USD lost few points vs the CHF but the overall effect is neutral from a EUR point of view.

The logo of this blog changed accordingly from:

To:

… and got 2 decimal digits!

With a modest jump of +1.17% toward the big goal in this month.

Let me remember you that the progress bar is tracking advancements toward the FU Number of 1,000,000 EUR.

Net Worth cumulative 2016 Delta so far: +110,142 EUR (+28.79%, cell P40 )

Forecast end of year 2016 Net Worth: 529K EUR (+147K EUR, +38.39%, cell S39).

Target for End of Year: still flying low: 1 Billion Italian Lira (516,456 EUR or 566,000 CHF). Let’s try to join the three commas club!

Forecast for 100% FIRE: 41 months left (February 2020, cell T20).

Current Monthly allowance: 1,368 EUR (+32 EUR, cell T26). It represents how much could I withdraw indefinitely per month (at my desired WR) in case I decided to call myself FI today. This month I created another 32 Euro per month forever!

Current Withdrawal Rate – Real: 10.85% (+0.49%, cell T29). This represents the WR I need to support current spending regime with my today’s NW. It got worse this month because we increased actual yearly spending forecast more than we increased our NW

Current Withdrawal Rate – Ideal: 6.77% (-0.16%, 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, while our NW did. When this number will match the desired WR (cell T11) we’ll be FI 🙂

Next Steps

I moved some CHF into EUR (10K CHF to 9K EUR) according with my cash needs. I’m going to fully repay my home loan to RIP Sr. next month. I don’t consider it of any impact in my NW, since it’s a debt cancellation with cash.

I still need cash for other planned activities by end of year:

• 20K CHF – Pillar 2 buy-in
• 6.7K CHF – Pillar 3 buy-in. Not sure about that. At least not in a saving account at 0.5%. I’l post about it later.
• 5K EUR – Mexico trip
• ?K EUR – The secret project

So I don’t plan to invest much more this year. I still have 15K USD sitting on my Interactive Broker account, waiting to be either invested or converted into other currency and withdrew. I’m tempted to invest them though. I have 14K CHF on my checking account, plus I can count on October and November salaries (minus 3K “family taxes” per month). It’s another 12K by end of November. I can’t count on big fat December for Pillars buy-ins. I’m tight, I can’t invest other CHF. I could invest the 15K USD though. I’ll think about it next couple of week.

But let’s talk about something bigger: I’m really getting inpatient with this Early Retirement thing. Hooli is cool and amazing, I can manage my time, work from home whenever I want, receive unexpected bonuses. I’m extremely lucky. But still I feel like I don’t have time for what matters the most to me. I’m seriously thinking about asking for a part-time 60/80% (3 or 4 days per week). That way I’d still save a lot of money and keep making progresses toward FI (slowly though) but I can start tasting ER. Having 3 or 4 days long weekends would be a quality of life improvement that will make the journey longer but happier. I’m thinking about it. Eventually the discussion with my manager would take place in January 2017 and maybe an agreement could be reached around April 2017. A lot of time to ‘stash more money!

Another minor update: blogging. I really like it! I’ve experienced few interactions with other bloggers and it was awesome. I love writing and I had fun interacting. I plan to be more socially active in future: guest posts, podcasts, social networking, meetups – I sadly need to skip the October Belgian/Dutch one. I’ve created a facebook account and a facebook page, a G+ account (that I use on Youtube too) and a reddit account. It requires a lot of time, but I really enjoy being active part of the FIRE blog community 🙂

That’s all for this month!

How was your September?