Monthly Finances - July 2020
Well here it is again so soon, another monthly update and now a whole 3 months since I turned my back on corporate life. Well at the 90 day mark, I don't regret it a bit. Time will tell if that feeling continues.
July 2020 - Monthly Finances
Total Pension Pot: R14,193,129 / $834,890 / £675,863
Previous Month: R13,985,843 / $822,697 / £665,992
The fourth good month in a row, it's starting to be a trend
I'm trying pretty hard at the moment not to slip into a comfort zone that every month will provide returns better than my budget but it's four wins, no losses since I started this journey and I'm starting to feel pretty good about things. The biggest thing I keep reminding myself is that these are the ups that carry you through the downs so it's critical not to see the extra returns as some kind of bonus and increase spending or think we have a surplus. I still think the stock market has lost the plot and at some point we're going to see a second crash due to the COVID-19 pandemic.
However, the stock markets in South Africa, the UK and the US, where most of our investments are, keep ticking forward steadily and that means the bank balance keeps slowly increasing.
The minimum net worth gain I needed for July was around R110,000 / $6,470 / £5,238 and we actually achieved R207,000 / £12,170 / £9850 so we were around 88% better than plan, that'll work!
The big wins came from South Africa Commodities (Minerals, Iron Ore, Platinum etc.) which I invest in through a fund in South Africa (Ninety-One Commodity fund) which kindly gave us 9.6% returns for the month. I think this is mostly because the South African Rand is generally weak but commodities are mostly priced and sold in other currencies. The other big win was in my offshore pension (that I started when I worked and lived in the UK), that is mostly invested in a UK fund called Fundsmith and then a mix of UK and US index linked funds. The pension gave 1.5% in August but as it's my biggest investment, that is a big return considering I expect 0.8% per month from it. My SA pension also did quite well with a 2% return but it's done so badly for so long, it definitely owes me that!
In terms of new investments, I bought some more solar panels at The Sun Exchange and another pregnant Cow at Livestock Wealth. I now have 2 cows so considering they're both pregnant, I guess I have 4 cows, does that constitute a herd? I also wrote a post on my Cattle investment so if you want to know more about that, click here.
I also kicked off another side hustle
When I left the corporate world, I did know that despite wanting to get out, my knowledge and experience was worth something. So rather than just shout from the rooftops that I was retired and "Screw working for the man!" I quietly update my LinkedIn profile to say that I was now a self-employed business consultant and if anyone needed help or advice on a consulting or contract basis, they should reach out.
My theory was that the field I worked in for over 20 years is quite specialised and as I'd been doing it for so long, I am considered somewhat knowledgeable in the industry. However, that knowledge has a shelf life and I'll be an out of date fossil in around three years (a fact I'm very comfortable with) so I can probably be valuable to someone in that industry for the next 2-3. So I might as well capitalise on that.
Needless to say the virtual phone started to ring and within a few days I'd been offered a 4 week contract, which I duly accepted at a daily rate which worked for me. I'll probably do a whole post on the contracting gig economy as it's pretty interesting and there's some points to it that at first you may not consider that make it worthwhile. Needless to say, I'm due a nice little paycheck which hopefully will come through and hit the books in August. The work is done, the client seemed happy and I'm back to choosing how I spend my time so it worked out nicely.
So after all that, the investment side of the equation looks like this in July:
Overall investment growth
Investment Growth: R207,287 / $12,193 / £9,870
Monthly Investment return: 1.5%
Annualised Return on Investments 6.9% - (6.7% Last Month)
A small improvement in the annualised percentage which is less than I thought it would be. That can be accounted for by the SA rand strengthening backup after the crash. As most of our investments are "offshore" in the US and UK, when the rand gets stronger, I theoretically lose money (because I get less rand for my pound or dollar). I try not to change my exchange rates much in my accounts but the rand went from 18 to 17 to the dollar so if I don't update it, I'm lying to myself. Obviously I benefit again when it goes the other way too, which it does often.
Living Expenses: R58,535 / $3,443 / £2,787
Budget: R62,000 / $3,647 / £2,952
A great month for spending by a couple of little changes that we didn't feel at all.
Last month we had the dreaded dentist bills and there'll be more of those in August unfortunately but we had a great month with no surprises and just a couple of little tweaks brought down our gargantuan grocery bill.
The grocery bill in June was R19,000 / $1100 / £900. I managed to shave that down to R13,500 / 800 / £650 in July and we didn't feel a thing. It was pretty simple really.
Mrs H and i like a tipple and have enjoyed it a little more since I retired and we've been locked down so we get through a bit of the booze. That was tactic one. instead of going to the shop to buy a bottle of wine to go with dinner, I went to the local wholesaler (Makro) and bought a case of wine and Rum (my favourite) and Gin and tonic and diet coke. Enough for the entire month (in fact we haven't gotten through it and it's now well into August) . This worked on two levels, because I bought bulk it was cheaper, not by much but maybe 5-7%. The real saving is that I never go to the shop and just buy a bottle of wine, I pick up a few random extras that we probably don't need so instead of R100 / $6 / £5 for a bottle of wine (one of the best things about SA is that good wine is cheap compared to the UK), I spend R300 / $18 / $15 that I probably don't need to and that can be 5 out of 7 days per week, so it really adds up.
The second tactic is that I now buy all of our meat from an online butcher and have it delivered for the week. I put most of it in the freezer (and take out what we need for the evening meal every morning) so if we don't use it it doesn't waste ( I used to by all meat fresh on the day) and I portion it up for two people in freezer bags (Instead of cooking 2 steaks out of a pack of 3 and the other eventually going to waste or given to Winston the wonder dog). This also keeps me out of the shops buying unnecessary crap. The final tactic was maximising my rewards. My health insurance pays me up to 50% cashback on healthy food at a certain store, but it cancels out any healthy purchases with unhealthy purchases. Simple answer to that, all of the healthy food gets bought at the shop with a swipe of the reward card and then I go somewhere else for the treats. Bingo. it's a little more hassle going to two shops, but I'm retired, I have time and 50% is 50%!
So just a few simple life hacks and we knocked 30% off the grocery bill. We really haven't noticed a lifestyle change and it actually takes me less time because I'm not "popping to the shop" for stuff anymore. That's winning at life right there.
So weighing up the month, a good month and a continued upward trend. I've been retired 3 months now and instead of starting to nibble away at our net worth, it has actually increased by almost R700,000 / $41,000 / $33,500 in that short time and that is about the same as we plan to spend in a year so whilst we have the benefit of Mrs H's salary as a backup, we probably didn't need it.
If I'm still ahead with 12 months retirement under my belt, I think I'll actually stop that slight worry that it's not a normal environment or we've just been lucky and maybe start believing that this whole early retirement thing is actually a thing and I should have done it much sooner. I already feel happier, healthier and more fulfilled than I did in the old life and that was the point of the story right?
As of 30th July 2020: At our current budget, investment performance and inflation rate, we have enough money to last until I am 69 - That's 25 Years.
Until next month, keep living.