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  • Writer's pictureMr H

Monthly Finances - February 2021

Updated: Apr 13, 2021

Calculating the Financial Budget

February 2021 - Monthly Finances

  • Our Net Worth: R14,865,103 / $946,822 / £718,120

  • Previous Month: R14,651,221 / $933,199 / £707,788

  • Change: 1.4%

Number of Months Retired: 10

The end of the South African financial year and it looks like some choppy waters ahead!

Once again we had a bit of a boom and bust kind of month. February started like a rat up a drain pipe and we went flying back into the millionaire club with a bang. By mid February it felt like the stock markets were unstoppable and we came with in a flea's whisker of breaking the psychological R15,000,000 mark after we've been flirting with it since November now. Then the sky fell in from around the 20th and we saw the S&P 500 have it's worst run since October. That put paid to our date with R15m and we closed the month almost exactly where we closed 3 months ago in November.

From a life perspective, it was my birthday last week at which I was suitable spoiled by friends and family.

45 years young!

There's no excuses now, I'm officially middle aged, I can probably squeeze out this year claiming to be in my mid forties but there's no hiding from it, I'm an adult now, regardless of the fact I still feel 21 in my head. My back, feet, neck and knees however, feel more like 60!

The big excitement for February was I learned to weld! Well I say learned, I can now join two pieces of metal together and they seem to be staying together, the fact they look like it took a sledgehammer and a small grenade to join them, is irrelevant. I haven't actually made anything useful yet but I did splash out on a load of steel so it's in the works. The other big excitement was doing my first business tax return. Tax is not always my idea of a good time but now at least I can see how much money I made off the side hustling and I have to say, the numbers are not too shabby.

I started the side hustling at the start of July 2020 so we're just about 8 months in and the total income has been R2,237,059 / $149,137 / £111,852 which is a cracking sum of money considering the amount of work I actually had to do. However, that's income, there's a whole bunch of costs that need to come off that before I see actual profit. The profit came in at right around R1,000,000 / $66,666 / £50,000 which I'm pretty happy with. As per the master plan, I'm not planning on taking any money out of that and will be investing it all in Solar Panels to rent out from within the business. I obviously have to pay business tax on my profit which is 28%, so after all the pipers have been paid, I'll have around R720,000 / $48,000 / £36,000 for investment.

So I'm putting a massive tick in the box of side hustling, I would still estimate that my total working days in the last 8 months were probably 40 to get that outcome so whilst I can't exactly control the velocity of the work, the sacrifice of doing it is worth around R25,000 / $1,666 / £1250 per working day which is slightly ahead of what I set out to make. I still believe my knowledge and expertise is probably only good for 3ish years so that's a big chunk of that gone already.

Other than that I had a bit of bad news in February and whilst the diagnosis is not finalised yet, it's looking a lot like I've got Stage 3 Kidney disease which was not part of the master plan and changes a few of my life expectancy assumptions. One thing I don't do is worry about something that hasn't happened yet though, so my doctor is referring me to a Nephrologist (the kidney quack) for a final opinion and then we'll make a plan accordingly. Until then, the one change I've made is to become a Flexitarian which is a fancy way of saying I'm cutting down on the red meat. I love a full english breakfast too much (mmmm bacon) to go full veggie and I find veganism mildly offensive so moderation is the key. I'm definitely built for comfort and not for speed anyway so it won't do me any harm to dodge less salad.

Overall investment growth

  • Investment Growth: R375,478 / $23,916 / £18,139

  • Monthly Investment return: 2.6%

  • Annualised Return on Investments 7.8% - (7.1% Last Month)

Now that I look at the investment returns for February in isolation, they're pretty bloody great and right in-line for my moonshot goal of a 25% return this year. The problem was I had to draw down some cash for our living expenses this month which is something I don't really have to do very often as Mrs H's salary almost covers our living expenses. That means that once every few months I pull down around R100,000 /$6,666 / £5,000 to top up the cash accounts and that happened to be this month.

The Magnificent 7 ETFs took a solid beating this month as big US stocks, which is my focal point, took an almighty hiding. The M7 were all above 20% up (since October) when BOOOM! The tsunami hit and now everything is looking less impressive. Leading the pack is Vanguard Emerging Markets which is 19.8% and at the other end of the scale is Vanguard Mega Cap Growth with just 9.4%. I am still claiming the M7 as a total win though as the average return since October is still 17% which means for the full year at that rate, we'd see a 40% return. I don't think that's going to happen but remember I only NEED 9.5% and I only WANT 25% in 2021 so I am well pleased with progress so far.

I continued with my learning experience with Cryptocurrency and this months learning was that Crypto goes down as well as up! I got a little bit burned with my messing around in that world and quickly corrected my behaviour. Stanley the Crypto-trading bot is still beavering away and has now brought home a total of R4,830 / $322 / £241 without me discovering any flaws in his character. The Crypto mining PC is also humming away in the basement and has amassed a total of R465 / $31 / £24 in 2 weeks with effectively zero risk so he's earned a name, he's called Errol. So Stan & Errol can stay for another month and be a part of my Stock-Market diversification strategy.

I'm going to do a full update on all of the 2021 experiments in the next week so watch out for that.

Living Expenses: R53,355 / $3,398 / £2,577

Budget: R62,000 / $3,647 / £2,952

February is the best month we've had in ages on the budget front and I think that's down to a few things.

First was cutting down on the meat. Mrs H has stayed full carnivore but she would literally eat steak every night if I let her (I don't) so I can buy a pack of steaks now and freeze them separately which means I'm not going to the shops as much for food. I know my way around a kitchen so have been trying to cut down on my animal products and processed foods without feeling deprived. This meant there was a whole lot of scratch cooking done in February and that helped the budget a lot. I've been making a lot of Asian food (Chinese & Thai mostly) as that cuisine is big on flavour low on meat, heavy on fresh common vegetables. This small change knocked around R5,000 / $333 / £250 off our grocery bill in February which is pretty amazing. To be fair though I seriously need to go and do a "Big Shop" now.

I also switched insurance provider and that knocked a few more shekels off the monthly bills and we finally got our Solar fixed and the feed-in meter fitted so that lopped a bunch of cost out on electricity.

All that is great but I'm treating this month as our "refresher" month as it's the start of the new financial year and the budget needs to go up. We only hit the budget in 4 months of the last 10 so R68,000 / $4,533 / £3,400 is the new budget for the 2021/2022 Financial year. I'll update that from March and see what it does to the overall plan.

Monthly Summary

So in summary, another year older, a good month financially despite the peaks and troughs, my side hustle business survived it's first tax return and I picked up a new skill as a welder!

You can't really complain at that.

Mrs H and I have been talking about the prospect of selling the house and starting to think about setting ourselves up for her retirement and I can see we're taking more about the how and when then the what and if. That's good.

The medical news sucks and potentially changes everything but that looks like deploying our plan more quickly in my head which means an increase in risk but an increase in living. I need to think all of that through but it was a moment like this that catalysed this journey in the first place so while I'm a bit twitchy about finding out if I'm sick, I'm excited that if I am, we can throw a little more petrol on this FIRE.

A quick update on Experiment 2: Picking a Winning Stock. there has been some interesting changes in that department given the offshore tremors in the stock market. The JSE has been doing pretty well and as you'll see by the leaderboard below, someone in particular who you know quite well is showing a tidy wee profit!

Some would say it was luck............I would agree. It's early days with us only at month 2 of 12 but I'll enjoy the moment before I get crushed by Charlie or StuffyUncle next month.

Interestingly, our little experimental portfolio is yielding 5.2% after just two months which is not bad at all. A little bit of extra insight is that of all the companies in our portfolio, Redefine property is showing a 31.2% return in 2 months. I've been avoiding the SA property market like the plague but maybe things are turning around a bit. Time will tell.

Until next time, keep living.

As of 28th February 2021: At our current budget, investment performance and inflation rate, we have enough money to last until I am 78 - That's 33 Years.

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6 comentarios

Mr H
Mr H
02 mar 2021

Thanks Charlie,

This might sound like a really dumb-ass thing to say but the master plan is not to need to go past 3 years. While it pays well, it's not something that's easy to get excited about after 25 years, I'm basically selling my knowledge so my clients avoid all the mistakes I made, that gives them competitive advantage.

My less safe but infinitely more exciting strategy is to do as much work as I can (limited to a couple of days per week on average obviously!) for 3 years without taking a penny in salary and use all the profits to fund other more exciting ventures. I love the idea of building a micro version of a venture…

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02 mar 2021

Sorry to hear about that chap. Health issues are no fun at all, hope it's something that allows one to mostly carry on living normal day-to-day.

Congrats on the solid month and the side hustle is definitely a great gig to keep going at those rates =) Sounds like you get a lot of the reward without the pain of the daily corporate grind. How would you go about ensuring that you can extend the 3-year timeframe? Is it only possible via on-the-ground full-time corporate work? Cause at 40 days per year it sounds like a great side-gig to keep going?

good luck with the doctors, but keep enjoying the lifestyle that FIRE brings =)

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Mr H
Mr H
02 mar 2021

Thanks for the comment and the well wishes Ron, I really appreciate it.

I have a bit of knowledge of Six Sigma and Lean from a previous life and in the arena I was working in (Call Centres) there is a massive shortage of those skills and junior guys who have just achieved black belt are requesting 7 figure salaries.

I'm going to take a guess and say you were using your skills in manufacturing (and I'm also assuming you're based in SA). If you're looking for a lucrative side hustle, I would strongly suggest building a network in the contact centre and outsourcing area and I suspect you'll be snapped up for a gig in no time. Linkedin i…

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Mr H
Mr H
02 mar 2021
Contestando a

Glad it's sorted, cheers Ron!

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Mr H
Mr H
02 mar 2021

I'm adding a comment manually for one of my readers Ron as the comments section seems to have a gremlin

Hi there and thanks again for the update. you're still rocking this joint even with a few hiccups along the investment path. I cannot imagine how I could earn so much Hustle money on the side ??.... My focus while employed was operations specialising in Lean, JIT, Continuous improvement, 6Sigma etc but I guess my selling skills suck. On your health front, so sorry to hear of your possible Kidney challenge. Here's hoping that its only a scare and nothing serious!!! Be good out there and chin up old chap. :)

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