My Financial Independence Journey: Monthly Update #7 (July 2017)

Early retirement and financial independence

Friends,

I hope you are having a great start to the summer (or winter if you live in the Southern Hemisphere)! I have had a relaxing month and have started to settle in to the new apartment with fewer things to do and lower costs for new furniture etc., which means that I am back on track with a savings rate of 28% (it was actually 44% if I hadn’t prepaid my autumn holiday for October).

Lots of cool things (and one bad thing) happened in June, so read on!

What happened in June?

In June, four major things happened.

Let me start with the bad; I found out that a friend of mine has cancer which most likely will not be possible to cure. If you have ever tried this, you know that it is a nuclear bomb of emotions and sadness for the people involved, but it also puts your own life into another perspective. It makes me even more certain that the journey towards financial independence and early retirement is right for me, since I don’t want to waste my life on work (or any other things that I don’t want to do). I will invest time in close relations – people who genuinely matters to me – while I still can.

On a more positive note:

I got promoted at my work meaning that I am now entering a more senior position. This is reflected in a salary increase of >10% (10% in both base salary and pension, and potential higher bonus). I am both humble about the future challenges ahead and extremely happy to see a salary increase that can increase my savings rate.

I discovered that I am not getting the right tax deductions for the interest on my loan, which might partly explain the low savings rates of the previous months. From next month and forward, my take-home income will increase with approximately 4.000 DKK (570 USD), which will make a big difference for my savings rate.

I managed to grow the reach of MoneyMow last month despite somewhat low post frequency from my side – it seems that some of the posts are starting to get more organic traffic. My monthly newsletter subscriptions increased with 10%, page likes on Facebook increased from 500 to 600, and unique visitors to the blog increased with 60%. I am very happy to see this development and for all the nice comments and messages people send – thanks! 🙂

I also (for once) managed to achieve my three targets from last month:

  • Get a savings rate of more than 25% to get back in the game: I ended up at 28%, which I am confident will become even better in the coming months
  • Engage in the personal finance blogger community: I did this to some degree online, but I want to become even better at getting to know other FIRE bloggers. I am planning on setting up a meet-and-greet with fellow Danish FIRE bloggers in one of the coming months
  • Set up an Analytics dashboard for MoneyMow, so I start tracking visitors and engagement month-on-month: I have set up a nice dashboard in Google Analytics, so I can follow key metrics more closely

How’s that for a month? I feel really good with the progress even though I still want to increase my savings rate in the longer term!

How am I tracking on my early retirement goal?

My take-home income was 31,055 DKK (4,436 USD), which is slightly lower than what I will get in the future with my new salary, and my savings rate was 28%.

I have updated my budget after moving into my new apartment in case you are interested in seeing how I (plan to) spend my money going forward.

My current assets are:

Assets1 July 2017 (DKK)1 July 2017 (USD)1 June 2017 (DKK)1 June 2017 (USD)
Total assets212,45730,351 204,78529,255
Peer-to-peer lending15,1622,16615,0532,150
Stock indexes32,4574,63732,8804,697
Cash51,9397,42052,0007,429
Pension99,21914,17495,73213,676
Home equity13,6801,9549,1201,303

My total assets including pension of 212,457 DKK (30,351 USD) was an increase of 3.7% up from last month.

The total assets excluding pension of 113,053 DKK (15,579 USD) was an increase of 3.8% up from last month. This means that I managed to save 8,499 DKK out of my take-home pay of 31,055 DKK, which equals a savings rate of (8,499/31,055) = 28% (up from 6% last month).

MoneyMow savings rate over time (%)

I got my savings rate back on track from a one-digit savings rate to a savings rate of 28%. My savings rate was actually 15%, but due to the error with my tax payments I should have paid 4,000 DKK less in taxes making it a savings rate of 28%. Finally, I pre-paid my autumn holiday and stopped the next four months’ travel savings, which essentially gave me a savings rate of 44% (if I distribute it over the coming months). However, the lower travel spend in the coming months will result in higher savings rates, therefore I have decided not to include it in the savings rate this month making it a savings rate was 28% for the month of June.

I still have to improve my savings rate if I am to retire in 7 years when I am 33 years old, but I am quite confident that it will be possible going forward.

Focus areas for the coming month

For the coming month, I am on summer vacation (yay!) and I have three focus areas:

  1. Aim for a savings rate of more than 50%
  2. Increasingly engage in the personal finance blogger community – set a date for a Danish meet-up
  3. Write posts for the months ahead to front load some of the writing – write one bigger study on the personal finance sphere

Favorite posts of the month

Once again this month, I had the pleasure of reading great posts by FIRE bloggers:

  • RB40 wrote a great piece on remembering to the enjoy the journey to financial independence – something I have struggled with myself, especially in the bad times
  • Physician on FIRE wrote a post on declaring financial independence in connection with 4th of July. I loved the link between the rationale behind the original Declaration of Independence and the topic of financial independence
  • Steve from ThinkSaveRetire has now been retired for six months and reading his thoughts and reflections on how it is to be retired makes me so motivated to continue the journey

Let me know if you have any thoughts or question in the comments – and feel free to shoot me an email if I can help you with anything 🙂

Thanks for following my journey this month!

Onwards,
Carl

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