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  • Writer's pictureMr H

Monthly Finances - January 2021

Calculating the Financial Budget

January 2021 - Monthly Finances

  • Total Pension Pot: R14,651,221 / $933,199 / £707,788

  • Previous Month: R14,595,270 / $929,635 / £705,085

  • Change: 0.4%

Number of Months Retired: 9

Well January was looking great financially right up until the last few days!

At one point during January, we were having our best financial month ever, the stock market was flying once Joe & Don swapped seats and a couple of my well aged consulting invoices finally got paid. Mrs H and I even joined the Millionaires club for 3 days 5 hours and 17 minutes, and then...kablammy! The stock market lost 5% in just a few days and we were turfed out of the club like a US ex-president out of the White House.

In fact we ended up in almost exactly the same position as last month, we covered the bills and there was a small amount left to go into investments. Oh well, I've still got around 30 years to go before it becomes a problem.

In late December, South Africa was thrust back into level 3 lockdown as a new variant was discovered and the second wave hit us hard. I hadn't really re-adjusted after the lockdown so it was really more of the same but less alcohol as we don't be able to seem to behave in SA with a glass of firewater inside of us so Uncle Cyril (The president) grounded us and took away our booze for another month. Luckily I am now attuned to his parenting skills and had already filled the garage with libations so it wasn't too much of an issue.

Mrs H has had a bit of a job change so she's back in the office most days and we cut down our domestic help from 3 days from 5 when I retired. This meant that for 2 days per week it's just me and Winston the wonder-pup in the house and the world (well the house and garden) are literally our oyster. I love to cook (and Winston loves to lick the bowl) and am at my happiest in the kitchen for an afternoon experimenting. Up to now that hasn't been happening too much as when our housekeeper Elsabe is here I always feel guilty making a mess while she's cleaning up. But now, Winston and I can get up to all sorts on Tuesdays and Thursdays so it's cooking, potato stamps, face painting, you name it. As much mess as we like until 4pm when I quickly tidy up before Mrs H's arrival from work. Nobody in the world is any the wiser apart from me and my buddy.

I've been focussing a little more on the business the past few weeks, not because I want to but a few friends who are business owners are struggling due to covid-19 and other friends are looking for work so I've been doing a fair amount of free consulting to help out where I can. I'm always happy to help friends and I would like to think if I ever needed it, there's a few people out there that would return the favour. I have been working on a couple of speculative deals that probably only have a 15-20% chance of success but if they do the rewards are significant so fingers crossed on those.

Other than that it's been more of the same, locked down, trying not to get sick, trying to keep busy and do things I enjoy with my day.

Overall investment growth

  • Investment Growth: R78,328 / $4,989 / £3,783

  • Monthly Investment return: 0.5%

  • Annualised Return on Investments 7.1% - (7.3% Last Month)

At one point in the month we were almost R400,000 / $26,666 / £20,000 up. All the shenanigans in the US have made the US market of which I'm most exposed like a roller coaster. I wrote last week about my concerns for the markets in general but it does feel like things flattened out a little in the last few days.

One of my 2021 experiments is a crypto-trading bot which I have become fascinated in. I've called him Stanley and he works 24 hours a day buying and selling crypto, he doesn't answer back and I don't pay him but in the last 2 weeks, he's made me R975 / $65 / £44. That might not sound much but considering I only invested R10,000 / $666 / £500 in Stanley he has already made me close to a 10% return in 2 weeks. I'm resisting the temptation to invest more as there has to be a catch here somewhere but I'm yet to find it. I obviously carry the risk of the bottom falling out of the cryptocurrency market but it's survived 10 years so far so I'm kinda OK with that. I would never put the house on it but I am seriously considering upping my investment to R50,000 / £3,333 / £2500 at the end of February if I haven't found any flaws by then.

My Magnificent 7 ETFs are still powering ahead and in terms of winners and losers, my top performer is Vanguard Emerging Markets (VWO) with a 23% return since October which is only a couple of basis points ahead of Franklin FTSE China (FLCH) also at 23%. The bottom of the pile is interestingly Vanguard Healthcare (VHT) with a return of 13%. I'm very happy with the performance of all the ETFs but we're starting to see some division and the performers are separating from the pack. The more risky investments like Healthcare and Emerging Markets are definitely much more volatile than the relatively safe-havens like S&P500 (VOO) and Total Stock Market (VTI) which I guess is to be expected.

Pretty much all surplus cash went into my old favourite; solar panels this month. I'm right around R1.6m / £106k / £80k invested now and would still like to grow that to completely cover our living expenses within another 3 years which means diverting another R3m / $200k / £150k to that investment.

Living Expenses: R74,373 / $4,737 / £3,592

Budget: R62,000 / $3,647 / £2,952

It's time to accept it, the budget is too low. It felt like we watched every penny in Januworry and I put a tight rein on the finances but we still managed to come out over budget.

The problem is not so much the budgeted items, it's the unexpected things like car repairs, gifts (I had no clue how much money we spent on gifts!) and the dreaded household maintenance. I did spend more money on nailing the house back together after we got ripped off by no less than two sets of cowboys. I've finally found a reliable team who were recommended by a personal friend who has been using them for years. I'm also buying materials direct and paying on completion one job at a time. Pretty much what I should have been doing from the get go but what can I say I am (was) a trusting soul. However, my naivety now means that the total budget on household maintenance for the last year is likely to be close to R750,000 / $50,000 / £37,500 which is pretty much the same amount that we spent on everything else combined!

Oh well, you only live once right?

So the right budget feels like R70,000 / $4,666 / £3,500 per month. I think we can keep under that if inflation stays under control (is it me or did everything suddenly get more expensive?) That still feels like a lot more than it should be so I'll continue to watch and learn. It has ignited the thought process to sell the house and rent again but I think Mrs H would kill me if we don't at least take a year to enjoy all the work we've done. Maybe I'll convince her in 2022.

Increasing the budget more than inflation in a FIRE retirement plan unfortunately has pretty devastating effect on the number so I'll be making the necessary changes at the end of February and will probably do a post on what I learn from the experience. The reality is I'm only lying to myself if our budget isn't accurate so it has to happen and we'll need to adapt to the realities of it this year.

Monthly Summary

So an OK month all in all but a bit of a muted start to do a 25% uplift in our net worth in 2021. There's only 12 months so with January being considered a draw, which I guess is better than a loss, it does mean that the next 11 have to pick up the slack so I'm already chasing from behind in month 1.

All that said, I'm still getting to spend my days how I choose to and whilst my monthly update is very financially focussed, my life is becoming less so everyday. I'm hoping the vaccine starts to kick in globally and we're 6-9 months away from Corona being famous for being a tasty mexican beer that you drink with lime again.

Just one last thing before I go, I know some readers only read my monthly updates (can't imagine why!) so this is a good time to publish the leaderboard for Experiment 2: Picking a Winning Stock. The rules were simple, readers had until the end of January to pick a JSE listed stock, give a reason why and then I made a virtual R10,000 / $666 / £500 investment in it using the closing price on the 22nd January. Luckily I wasn't left hanging like a badly timed high 5 (I'm not going to lie, I was a bit worried about that!) and we have a total of 6 contestants with the chance to be crowned Tribal Fi Stock Picker of the year 2021 (It will be bigger than Masterchef, you watch) so the leaderboard as it stands on February 4th 2021 is as follows:

Now at this point I obviously should point out it's very early days....ahem [nervous shuffling] so I wouldn't read too much into the results so far hahaha.

However, allow me to be the first to congratulate two fellow Brits TheGroses and Lawrenceinvesting in their close to 5% return in just 2 weeks. Congratulations guys, I obviously don't hope you lose or hope that the cost of platinum goes through the roof before next month!

Until next time, keep living.

As of 31st January 2021: At our current budget, investment performance and inflation rate, we have enough money to last until I am 73 - That's 29 Years.

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Mr H
Mr H
Feb 08, 2021

Thanks Charlie, I'm pleased to say February seems to be starting with a bang so high hopes for next month's update. Winston might even get a new collar!

On the 12b question, I did it through my tax return (although I use Taxtim to do my return so they make it pretty simple). I just had a look at my ITA34 for last year (Which I struggle to make head nor tail of) and it looks like it went into "Depreciation" on code "2599".

My amount last year was relatively small (around R15,000) as I'd only just started investing in renewables but this year is going to be massive so it should get very interesting. I get audited every year…


Feb 08, 2021

Keep pushing, you'll be back above $1m in no time. A nice round number. I'm told the whole world is different at $1m versus $999k =) Just kidding, it's great to keep the net worth growing, while also enjoying the day-to-day life. It's great to spend time with the doggo !

A quick question - your sun exchange 12b deduction - do you get the docs from SunEx or do you fill it in manually on your tax return/specific line item for the deduction?


Mr H
Mr H
Feb 05, 2021

Hi Stuffy,

Obviously this is my personal opinion on investing myself and definitely not advice. I'm surprised I haven't heard of this one earlier. I really like EasyEquities even though I've never managed to successfully become a customer (very difficult without an SA ID number) , they solve genuine problems, like EE allows you to access US stocks and funds and buy fractional shares. I trust their brand so that is definitely plus point number one.

This looks like it removes my biggest reason for not investing in property, and that is hassle. I'm surprised they haven't made more noise about this venture (although I assume it's fairly new as there's only a handful of properties).

It looks to me…


Feb 05, 2021

Hi Mr H - interesting to hear your thoughts on this investing idea if you have a minute


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