Our Financial Independence Journey: 2020 End Of Year Update

Happy New Year, friends!

I hope you have had an amazing Christmas and New Year.

It’s time to look back on 2020 and reflect on a crazy year in our life.

2020 indeed became a year like no other for us – not only because of the COVID-19 pandemic but certainly also because many things happened we didn’t expect. We bought a new house and a car (I never thought I should own a car), and we increased the family size by 33% with little brother arriving late this year. I had honestly not expected any of these things to happen 12 months ago.

Our eventful year also meant that I could not focus as much on the blog as I would have liked. I am not sure 2021 will be any better in terms of writing new content, but I will continue with the monthly updates.

So, how did 2020 go for the MoneyMow family? Let’s dig into it.

The family

Late this year we could welcome a healthy baby boy into our family. Having experienced one birth previously definitely didn’t make the experience less special the second time. It was absolutely incredible to experience my wife giving birth again.

We are slowly getting used to having two kids while also managing work, friends, and everything in between at the same time.

Most importantly we all remained safe and healthy during the year – the same goes for our wider family. Every year where we don’t have to deal with health issues in the family is a privilege.

The house

When the year started, we loved our apartment. We had a plan of moving to a house in three-five years. However, this changed when we slowly started looking at houses in the suburbs of Copenhagen.

We fell in love with one of the first houses we looked at and after looking at +30 houses in record time, we decided to go for it. The house was already beautiful, but we decided to fully renovate it from floor to ceiling.

Not only because the house had the potential to become our fully-renovated dream house, but also because it can end up being a quite good investment. We expect the house to increase in value compared to the investment we put in.

The investment in the house in recent months has meant that our savings rate has been pretty low. We expect this will transfer into the net worth of the real estate once the renovation is complete.

The house is more expensive each month from a cash flow point of view, but given the extremely cheap fixed interest loans in Denmark at the moment, the majority of the extra cash outflow is a principal payment on the loan rather than interest expenses. This means our real estate net worth will increase faster than previously.

The car

I have always biked everywhere and never needed a car. That was when we lived in the city.

After moving out, it just became clear that we needed a car in the suburbs.

We have bought an electric car, and I am still trying to figure out how to include it in our net worth (if at all). I guess I need to depreciate the asset over time. Does anyone have any ideas?

The blog

The blog was heavily affected by my lack of time and COVID-19.

My lack of time caused the blog to be less active than in recent years. Less content means fewer visitors. There was a total of 71,000 visitors which was 49% fewer than in 2019.

The primary income from the blog came from affiliate programs that were heavily affected by COVID-19. This means that the blog hasn’t turned a profit this year, which also means I will not be donating to charity from the blog this year. I hope this will change post-COVID-19 again.

The journey

The journey towards financial independence is still very much on, but as expected it is not a linear line towards to goal.

I see the last part of 2020 and the first part of 2021 as a transition period in our lives. In this period, we will shape the basics in terms of housing and family. This costs money and our savings rate will be impacted in this period.

Our overall life goal is still to “spend all of our time with people we love, doing things that really matter“. Even though our FI date is pushed a bit in these months, we definitely spend time with people we love and we are doing things that really matter to us.

Becoming FI is still a big priority for us, but it is not the only priority, which the past few months have been a result of. Once everything settles down with our family, house, car, etc., we will be even more strict on saving and investing in liquid assets again.

Recently, I also heard about another life purpose:

Making it easy for those I love to love me

That simple sentence has so many different meanings in it. I believe it co-exists excellently with pursuing financial independence because FI can often be a vehicle to more easily achieve that purpose. For me, it has become a mantra in our journey to living a meaningful life.

Will we still become financially independent in 3-4 years? Probably not, but it is impossible to say. If you had told me 12 months ago that we would be living in the suburbs with two kids and a car, I would have laughed at you.

I have learned to embrace not having a fixed FI date anymore. It causes more stress to me than not having one. As long as we are on our way and our net worth increases at a substantial pace, I am happy.

The financials

Now for the part we have all been waiting for (at least I was super excited to count the beans after year-end).

The savings rate for the year 2020 ended at 28%. This is lower than I expected going into the year. If you look at the first six months before we bought a house, the savings rate was 42%, which I guess is closer to the +50% that we targeted for the year.

Despite having more cash outflow to our house in the future, I recently got a salary increase that I believe will somewhat make up for this.

Our net worth in 2020 increased by 29% or 898,344 DKK (147,441 USD). I am obviously very happy with this increase – especially in a year where we couldn’t save and invest as much as we wanted to.

Where did that increase of nearly 900k DKK (148k USD) come from?

170,984 DKK (28,063 USD) came from savings.

139,044 DKK (22,821 USD) came from stocks increasing in value.

17,619 DKK (2,892 USD) came from stock dividends.

19,470 DKK (3,196 USD) came from pension payments and stock return.

504,905 DKK (82,868 USD) came from principal payments on our housing loan and selling our house at a substantially higher price than we expected.

37,841 DKK (6,211 USD) came from CC.

10,332 DKK (1,696 USD) came from P2P lending.

Our net worth is now comprised of the following with liquid assets having roughly a similar share as last year:

That’s it for the 2020 year update. Thanks a lot for following our journey in 2020. I really appreciate every one of the 71,000 visits.

I wish you all the best in the new year!




Nick @ TotalBalance.blog January 6, 2021 - 11:28

Congrats on the expansion – on all levels in 2020 🙂

Welcome to the ‘burbs and the EV-club! 😀 (So which one did you pick?).

Carl Jensen January 9, 2021 - 13:09

Thanks, Nick 😉 Much appreciated. The burbs are so far great. We ended up deciding on a Tesla (the cheapest one available with no extras) after an insane amount of calculations made. Regardless of which cars we looked at (ranging from Skoda Fabia 2012 to MG ZS EV), the price for the Tesla was comparable when all lifetime costs were included. We got a 1% fixed interest loan for it, so financing was also incredibly cheap.

Jonas February 7, 2021 - 13:24

Hey Carl,
Which calculations did you look at? I am in a very similar position all around, but am looking at a Kia e-niro which starts DKK 150k cheaper and has more space in the boot. I am actively looking for good reasons to get the model 3 🙂

Great blog btw.

Carl Jensen February 7, 2021 - 20:31

Hi Jonas

I bought the “old” 2020 model of Tesla, so the difference between Kia e-niro and Tesla model 3 was around 90k. The Tesla luggage space is actually larger than the Kia when you count the front luggage too. Aside from that I just believe you get a whole different level of a car with a lot of extra equipment. If you haven’t had test rides in both, I would highly recommend that you do. You can’t compare the two really, in my humble opinion. If you pay it monthly with a low-interest rate EV loan, we are talking pennies in difference (however, when the difference becomes 150k, I can understand the dilemma is a bit bigger).

Mikael (former European Dividend Investor)) January 3, 2021 - 09:57

Hi Carl

Congrats on, what seems to be, a great year. I love to follow your journey and your heart is at the right place. The target is FI, but the journey must be joyful and filled with love.

You stocks start to be a substantial part of your assets – is it all in passive index funds?

I hope the best for you and your family in 2021.

Carl Jensen January 9, 2021 - 13:05

Thanks for the kind words, Mikael! Yes, the stocks are all in passive index funds.

I wish you and your family all the best in 2021 too.


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