I hope you are all safe during the global COVID-19 outbreak.
I have so many things to say about this outbreak. Personally, financially, environmentally and humanly. However, I will save it for a coronavirus post in the coming days instead.
Let’s get on with the monthly update for March.
Personal life: What happened in March?
In March, like most other people our everyday life took a 180-degree turn due to the COVID-19 outbreak.
Luckily, my wife and I still have our jobs. We have not been forced to take a holiday or go down in salary which is fortunate from a financial point of view.
We are following the authorities’ guidance of social distancing. This means I am working from home while my wife is taking care of our daughter in the last months of her maternity leave. We also do not see anybody else.
We are cramped in an apartment, but we do try to take a good, long walk every day and that works so far.
It’s weird not knowing when everything will return back to normal, but so far, the new normal is not that bad 🙂
Financials: How are we tracking on our FI goal?
Financials in March. Where should I start?
Let’s start with the good news. On the positive side, we got a partial refund from our already booked vacation to Southeast Asia that is obviously canceled. I also received a good chunk of money from vacation days I had earned in my previous job but not used. To be honest, I had forgot all about them, so a payout of 40,000 DKK (5,790 USD) was a very pleasant surprise.
In other good news, being locked up in our home definitely makes it harder to spend money. This means we have had historical low spending in the past month.
Now, the bad news.
The stock markets crashed in March. Surprise. All of the nice 2019 gains are gone – and more. Since the start of February, my stocks have declined by 25%. That’s insane!
However, I have been surprised by how little I have been affected emotionally. I knew a stock market crash would come at some point. Through the years of pursuing financial independence, I have taught myself not to care about fluctuations in the markets.
The FIRE principle of having time in the market and not timing the market couldn’t be better right now. I see the dip as a chance to buy lots of stocks at a discount. Because of this, I have continued to buy frequently and I will continue to buy each month. This way I don’t have to think about when the market has reached the bottom.
We ended up with a savings rate of 60%, which is well above our 12-month trend of 39%. This was mainly due to the extra income I had not expected.
Our combined take-home income was at 97,543 DKK (15,007 USD). We managed to save 58,962 DKK (9,071 USD) resulting in the 60% savings rate.
Our net worth decreased by -4.2% this month, which is the biggest drop we have ever experienced. Somehow, we can’t seem to pass that DKK 3 million mark.
Our total combined net worth is 2,846,180 DKK (437,874USD), which is -4.2% lower than last month at 2,972,074 DKK (457,242 USD). 29% of our assets are liquid meaning they can relatively easily be converted to cash.
Stocks fell by -18% in February which is the biggest drop I have ever experienced in a single month. Oh. My. Lord. If I hadn’t read (and written) a thousand blog posts and comments in the personal finance community about how important it is to stay the course, I would have probably panicked and sold all of my stocks. Instead, I have now invested more than I normally would.
Our real estate net worth decreased by -1.5% because COVID-19 has put pressure on real estate prices too.
Crowdlending increased by 0.9% which is our most stable investment. However, I am very anxious to see how many of the platforms will survive this COVID-19 outbreak. Some of them are beginning to look less capable of doing so.
Lastly, cryptocurrencies fell by -34.5% which is also due to the coronavirus.
All our three financial independence goals decreased this month due to the COVID-19 outbreak:
- Three years’ expenses in savings: 57.0% (down from 60.4% last month)
- Optimistic FI goal: 39.0% (down from 40.9%)
- Traditional FI goal: 10.0% (down from 10.5%)
Blogging: How did key metrics develop on MoneyMow?
MoneyMow is not growing at the moment. I expect this is because I haven’t posted that much lately. However, I have started to line up posts for the coming months and I expect the blog to be busier.
The metrics last month were:
- Visitors: Number of visitors was 8,020, and decreased by 27% compared to last month
- Page views: Page views were 10,646 and decreased by 29% compared to last month
Favorite posts of the month
My favorite posts of the month were:
- Mrs Money Hacker wrote a super article on things to buy during the coronavirus lockdown. She writes about all the things they no longer buy and what they use instead. It’s a really good inspiration for how you can reduce waste too
- Mr Money Mustache wrote a good piece on why you didn’t just lose half of your retirement savings – and why you should relax as an investor. After being slightly wrong about the implications of the coronavirus one month ago, I believe he makes better arguments now
- Banker on FIRE wrote about learning from Warren Buffet’s annual letter to Berkshire’s shareholders to better understand the current situation. Good thoughts on what you can learn from the master of investing
Stay safe during the COVID-19 outbreak. Let’s hope things have calmed a bit more down when it is time for the next monthly update.