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Well, who knew? It is possible to stay in your budget if you try!
Life, Health and Early Retirement - 12 Months Since Retirement
April was pretty much a blur!
This will definitely not go down as my favourite month having lost my dad but it is by far the first month we got to really appreciate the advantages of early retirement and financial independence. I'm writing this post from a government quarantine hotel room just outside Heathrow airport in London as I serve my time before going north to Leeds to see my mum. I'm writing a whole series on the trip so won't go into that here but I'm very thankful that our lifestyle situation was such that we could just drop everything and jump on a plane without really having to worry about work and all that stuff, although, Mrs H is still working through our quarantine so I'm finding eavesdropping (I don't really have a choice) on her meetings most refreshing and a thankful reminder that I'm not in corporate business any more!
Outside of all of that excitement it was a pretty uneventful month. I'm still doing more side-hustling than I would like so it does feel a little bit like I'm tied to a laptop again but I'm working with a nice group of people in America so my mornings are my own and they are very respectful of my time zone so I rarely work beyond 6-7pm.
I had my blood work done for my ongoing unruly kidney situation and I'm please to report that things haven't got any worse, which is a very very good thing. I'm still none the wiser to why they are not behaving but will be seeing the professor on my return to SA. for his professional opinion on next steps
I did a couple of splurges this month for the business, I bought a mahooosive A1 printer and an equally gargantuan vinyl cutter. Between them and all the little accessories and bits that go with them, that cost me around R40,000 / $2,666 / £2,000. I haven't quite figured out how I'm going to monetise this purchase yet but the old grey cells are turning so I have an embryo of another side hustle growing in my head. More on that later.
We're on the precipice of winter in South Africa which will frankly be a nice change, it feels like it's been hot forever and I lack motivation when it's hot. I have a to-do list of household maintenance which is not getting any shorter so I'm looking forward to getting home to some cold weather to get on with some much needed manual labour. Who knows it might help with the weight loss too.
Net Worth
Our Net Worth: R15,108,182 / $1,007,212 / £729,863
Previous Month: R15,006,604 / $1,000,440 / £724,956
Change: 0.7%
At a little over R100,000 / $6,666 / £5,000 for the month, we fell a bit short of target. Technically, this is slightly under reported as I sold 12 cows right at the end of April but I won't receive the income from them until May so I'm not overly concerned. The stock markets did well overall for the month but I can see a downturn coming and I think May is going to be bumpy so I'll be glad of that extra boost this month from the cattle. Side hustling is on fire but my latest consulting gig doesn't pay out until the end and the first phase is 3 months so that will be another delay to cash getting in the bank in May. All in all, we would have made the magic 1% monthly growth if the flow of cash was real-time.
Living Expenses
Living Expenses: R57,886 / $3,859 / £2,796
Budget: R68,000 / $4,500 / £3,400
This is the first time we've been significantly under budget in ages without there being a reason for it so I'm well pleased about that.
A quick bit of spend analysis reveals that the saving is actually on household maintenance which I wouldn't have guessed. Maybe I'm getting close to actually having our house nailed back together which has been a focus area since I retired, it's only been a year!
The other slight surprise was that our grocery spend dropped by about 10% which was unexpected as we've been off the carbs which means much more spend on expensive meat and dairy as opposed to cheap carbs like potatoes and pasta.
I suspect a large part of that saving was down to being off the booze on school nights in April as we would normally drink 2 or 3 week days at least which is an expensive hobby. We've unfortunately fallen off the weekday wagon in light of the current events and when you're looked in a hotel room for 23 hours per day, you might as well be part-baked for your own sanity!
May is going to be very odd budget wise as we'll be travelling for the whole month and compared to SA, the UK already feels ridiculously expensive. I paid R75 / $5.00 / £3.75 for a can of coke in my first day in the hotel and I could have cried when I saw the price, for context for non-south africans, a can of coke in SA is around R10 / $0.66 / £0.50 and guess what? It's exactly the same coke as in the UK. Talk about "Rip-off Britain"!
Investment Performance
Monthly Investment Return: R324,863 / $21,658 / £15,693
Investment Return Percentage: 2.2%
Annualised Investment Return: 12.7%
I may well have to start splitting out my side-hustle income from this number as it's starting to play a big part. From the amazing R320k / $22k / £16k income this month, only around R100k / $6.6k / £5k was actually income from investments, the rest was consulting income (I said I was busy). A lot of that money did go back out though as I paid my first two VAT bills which came in at just about R90k / $6k / £4.5k and explains why the big income didn't register so much on the net worth. That was 4 months of VAT though so I've had the benefit of that in previous months.
I'm still slightly addicted to the crypto bot investing and am still to find a flaw in the strategy, returns on crypto were around the 18% mark for the month so just amazing. I'm slowly increasing my investment there and going into May I now have R200,000 / $13,333 / £10,000 invested which at 18% would provide a monthly income of R36,000 / $2,400 / £1,800 which is more than 50% of our living costs. mind blown!
In my bid to consolidate some of my investments, I've decided to put the brakes on the cattle investing. It's not that I don't like the investment, in fact on the contrary, it's great but it is a short term investment, paying out every 6 or 12 months so it does involve a little bit of admin. As I'm investing for the long term, I'm going to consolidate my cattle investments into solar as that is still my go-to long term strategy for our income.
Side-Hustles
I'm definitely popular at the moment and am actually turning down consulting work at the moment which breaks my heart (or at least makes my wallet hurt) but the point was not to swap one job for another. I have one big consulting gig that is on the recommendation of a friend so I want to do a good job for him on that. The first phase of that runs until the end of June and I would then expect ad-hoc work from it for the next year so whilst I'm super busy with it right now, I hope it will be a nice steady couple of days per week after this initial stint for a year or maybe more. I have made one big decision and that is that I definitely don't want to do my own taxes and the reason for that is that it is affecting my behaviour. What I mean is because I'm worried about a complicated tax situation I'm avoiding certain opportunities or investments which is just dumb as those opportunities could be highly lucrative. I figure if I pay someone to deal with the complexity, I can get on with the job of making the money which is what I enjoy. I've been smarter this time now, I'm appointing an accountant to do the paperwork and appointing a tax consultant to advise me on how best to structure my investments and life to optimise my tax position. That end to end service is costing me around R38,000 / $2500 / £1,900 per year so considering I can make that in 1 month with my trusty crypto bots, it feels like a good deal!
Picking A Winning Stock 2021 - Q1 Update
Month 4 of our 2021 stock pick challenge and it's all change again.
Well who'd have thunk it? StuffyUncle races into top spot with a blind pick, blowing the whole experiment wide open. Stuffy was brave enough to admit that his selection was as random as socks with sandals and after 4 months is proving that stock picking is more luck than analysis! Good work Uncle.
Notably, our little portfolio has returned over 10% profit now in just 4 months. Considering that most advice I read is to steer well clear of South African equities, this is an impressive return.
Summary
A pretty good month overall financially and a month I hope to forget from a personal perspective. On the plus side we are on our first FIRE adventure in May despite the slightly sad circumstances. With a 5 week trip ahead of us, I'm hopeful I'll learn a lot about the true cost of travel while living a FIRE lifestyle as its something I'd like to do extensively over the next 10-15 years of our pre-retirement. I'm predicting a bad month in May for the stock markets so the extra side-hustling is a welcome inconvenience right now. I'm missing Winston the wonder puppy like hell already and it's only been 5 days but I'm lookign forward to giving my mum a hug in a weeks time.
As of 3th April 2021 we have enough money to last until I am 73 which is 28 years from now
Until next time, keep living