Our Financial Independence Journey: Monthly Update #34 (October 2019)

Financial independence update 34

Friends,

Better late than never! I’ve been sick the first week of November and simply haven’t been able to type on a computer. I have probably felt worse for myself than I should, but we can all succumb to a good old man flu once in a while.

No more bad excuses, it’s time for this month’s update.

Personal life: What happened in October?

October was my second month in the new job and I’m still really excited about it. I feel like I have much more time for more family, friends, hobbies (like writing this blog) and doing sports. I got to admit that life outside of management consulting is pretty good, and I’m pretty sure I’m out for good.

In October, we also went on a vacation which was the first time flying with our daughter. It went really well and it was nice to spend some quality time together. The vacation turned out more expensive than usual – don’t they always? However, you will not see it reflected in this month’s income because part of our budget is saving for vacations, which means we had a buffer to use.

We also decided to convert our housing loan to get a lower interest rate. This will have a significant effect on our budget (a decrease of ~15% each month) without adding a lot more risk.

Otherwise, there’s not a lot of news from October. We are simply adjusting to our new life as parents with me having a new job – and spending time with our daughter as she becomes smarter, funnier and increasingly demanding!

Financials: How are we tracking on our FI goal?

October was a great month for our net worth and savings rate.

We ended up with a savings rate of 51%, which is up from last month’s low-point of 9%.

It’s also above average for the year that is currently trailing around 40%.

Our combined take-home income was at 71,486 DKK (10,998 USD). We managed to save 36,254 DKK (5,578 USD) resulting in the 51% savings rate.

Our net worth increased by a lot this month.

In fact, I don’t think we’ve ever seen our net worth grow this much in absolute terms. It’s a combination of decent savings, very good stock market returns, loan conversion, and abnormal real estate price increases.

Please give me a drumroll…

Our total combined net worth is 2,957,854 DKK (455,054 USD), which is 7.8% (!) higher than last month at 2,713,818 DKK (417,510 USD). 27% of our assets are liquid meaning they can relatively easily be converted to cash.

This means we added nearly 250,000 DKK (40,000 USD) in a single month (!).

I’m really proud of this. Mostly because this increase comes from many sources. I know things go up and down, and we might have a smaller net worth next month, but still, the trend is clear when you look at the graph above.

We added roughly 140,000 DKK from real estate increases, 30,000 DKK from stocks, 14,000 DKK from loan principal payments and 36,000 from savings, and a bit from our other investments too. I somehow feel that we are starting to see our relatively large net worth roll like an avalanche, so everything will be going faster and faster over time – unless, of course, the markets crash in December again this year 😉

Stocks grew by 3.6% in October, which is obviously really high for a single month. The beginning of November has shown no end for this trend yet.

Our real estate net worth increased by a whopping 9.0%.

Real estate prices in our area increased significantly. They are slightly bouncing back in my area and some long-dreaded real estate taxes were postponed from 2021 to 2024, which is likely to have an impact on prices too in the coming years.

Bonds declined slightly by -0.2%. Crowdlending increased by 0.8% (I’m seeing lower returns in general on my platforms, so I’m considering my options here). Lastly, cryptocurrencies remained relatively flat compared to other months with a 4.6% increase.

All our three financial independence goals increased significantly this month due to the strongest month in a long time:

  1. Three years’ expenses in savings: 57.7% (up from 51.8% last month)
  2. Optimistic FI goal: 39.6% (down from 35.7%)
  3. Traditional FI goal: 10.2% (up from 9.2%)

Blogging: How did key metrics develop on MoneyMow?

MoneyMow developed decently in October and I’m bouncing back towards earlier visitor levels.

The metrics last month were:

  • Visitors: Number of visitors was 11,742, and increased by 173% compared to last month (yay!)
  • Pageviews: Pageviews were 18,114 and increased by 144% compared to last month (yay again!)

Once again, I’m really happy to see the numbers go up instead of down. It’s a lot more fun when people actually read what you write 🙂

Favorite posts of the month

My favorite posts of the month were:

  • Hustle Escape wrote an excellent post about the endowment effect. I could see myself in some of the theoretical aspects of overvaluing items and finding it sometimes hard to declutter our house.
  • Cashflow Cop wrote about saving money on small items such as haircuts. It was a coincidence reading the article as I’m considering doing exactly that at the moment. The story has a tragic ending though 🙂
  • Foxy Monkey wrote a great post about the opportunity cost of FI. Do we lose out on some things by pursuing FI compared to people who don’t?

That’s it for October.

Take care until we meet again in the beginning of the last month of the year 🙂

Onwards,
Carl

4 comments

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4 comments

Frederik November 10, 2019 - 12:22

Hi Carl,

Can’t remember if I’ve asked this already. How do you value your apartment and what is the source for changes in house/apartment prices?

Reply
Carl Jensen November 10, 2019 - 21:58

Hi Frederik,

I value my apartment like this:
+ estimated market price on Bolighed.dk
+ worth of different renovations (conservatively)
– remaining loan principal

Thus, each month the value goes up because I pay off some of my loan, worth of renovations remain flat as we are done renovating our house and the market price goes either up or down dependent on the latest estimate from Bolighed, which I have found to be fairly accurate over time 🙂

Reply
Carles November 7, 2019 - 23:10

Hello Carl, Carles here 🙂

I really don’t know where to find this info, so I hope you can help me.

I lived in Germany and invested 5k€ in ETF’s about a year ago. Now I’ve just moved here, and I was wondering about the taxation and so on. I couldn’t find much info about this, so I hope you can give me a hand.

Loved the blog, pretty jealous of your FI journey!

Carles.

Reply
Carl Jensen November 9, 2019 - 15:11

That’s a good question, but I’m simply not confident answering it based on the tax treaties between countries. However, I’m pretty sure you wouldn’t be taxed in both countries. I would give SKAT (Danish tax authorities) a call and ask them.

Thanks for following my blog!

Carl

Reply

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