Monthly Finances - May 2022
Life, Health & Early Retirement - 25 Months Since Retirement
Year 3 of retirement has started with a bang, it looks like the stock market is taking a (perhaps temporary) break from it's downward spiral, I've increased the hustle to offset my massive losses and it appears I made one of the most expensive blunders of my life!
Overall, life is good, we had a nice chilled May after all of our travels and visitors and became re-acquainted with what being retired is all about......................household maintenance mostly!
Its fair to say Mrs H and I "pottered" for most of May, we got loads of jobs we've been putting off done and even did a bit of home improvement instead of home repair, I even fixed the wonky legs on the bathroom vanity unit which I have literally been putting off since I built the thing in my first couple of months of retirement. I have learned something from this experience, the satisfaction of ticking a job off your list and the removal of the stress of having it on the list in the first place (and the soft but definitely passive aggressive "encouragement" from Mrs H to finally do it), completely outweighs the effort it actually takes to do the job. In fact, the stress of motivating myself to start is more than the effort of doing it. Maybe I'm finally just growing up a bit. Having the time to do these jobs it is the magic of early retirement though, I'm doing things that have been waiting years for attention whilst we were working.
I've taken on some new side-gig work but have also put a stop to sitting in my office the whole day just because I have a couple of 1 hour meetings that day. I only actually get paid when I'm in the meeting so why spend hours preparing myself for it for free? Madness I tell you.
Health wise? I'm actually starting to be embarrassed with the amount of ailments I seem to be acquiring. I already have a failing spine and arthritis, high blood pressure, I'm recovering from near kidney failure last year and have weak lungs from double Pneumonia the year before that and sleep with a CPAP machine. Now it looks like I might have Glaucoma! For the love of Pete, if I was a horse you'd shoot me. Add to that that I finally got hit by Covid in May and I might as well re-train as a freaking doctor!
So in an attempt to boost my immune system and stop picking up every passing disease, Mrs H and I returned to the gym yesterday after about a 3 month hiatus. Let's just say I'm moving very slowly today but I'm feeling good about it. It also would appear my gardener has quit because he hasn't shown up for a few weeks so I've been out mowing the lawn this morning which I don't think I've done since I lived in England. feel the burn!
Financially May was horrendous but I've begun to take steps to put some lipstick on this pig and make a few shekels when the market finally starts it's journey back up, which it will, eventually. Spending however is a potential issue, with prices going through the roof and medical bills being consistently over the roof, these are difficult times to be living to a budget.
Our Net Worth: R17,347,275 / $1,156,485 / £867,364
Previous Month: R17,962,032 / $1,197,469 / £898,102
Change: -3.5% (Previous Month -6.0%)
Another big loss this month with over R600k / $40k / £30k of our hard earned wiped off the balance sheet.
June has started out less so but still pretty gloomy and if I was a betting man I think losses will be half again this month at around R300k. Stock market investments are a real mess and with interest rates rising along with inflation, if you read the financial news too long you'll be resorting to sticking what cash you have left under the mattress.
If I look back over the last 6 months we're now down around R2m / $133k / £100k which is getting close to 3 years living expenses. However, if I look at our net worth since the day we retired, it's still up around R2m / $133k / £100k which gives me a slight sense of comfort in that I retired with no plan, I've been through 2 crashes so far (start of Covid & now) and we've still got more money than we started with, in fact close to 3 years more money than we started with so its not time to get out the job ads yet.
Living Expenses: R68,987 / £4,599 / £3,449
Budget: R75,000/ $5,000 / £3,750
We're actually managing to stay in budget for living expenses right now which is a surprise because it actually feels like we're spending more. The biggest saving is on Petrol as even though we don't do loads of Km's each month, we both have cars and neither are super fuel efficient and the fuel price is off the chain.
I filled up my car the other day, and for what seems like forever it alwasy previously cost less than R1000, maybe around R900 to fill up. R1800 now and that's before the price hike last week so I bet I'm touching R2,000 / $133 / £100 per tank which if you're reading from the UK or US, may not seem so bad but if you're reading from SA, you know what I'm sayin!
I actually think about if I need to even go out or if it would be cheaper to order groceries delivered or even just get takeaway. Winston the wonder puppy's second favourite past time of an afternoon drive with his pops is definitely off the cards but it does mean he gets to do more of his favourite thing which is go for a swim in the lake at the local dog park as it's only a couple of streets away.
Mrs H & I have also agreed we don't need to eat restaurant standard food every night of the week so last week I bulk ordered a freezer full of pizza bases from our favourite pizza place (Holy Dough - I might not be a religious man but their pizzas are an angelic experience - No affiliation, but if they're reading; the best pizza is free pizza!) and we've agreed a jacket potato with cheese and baked beans (its a British thing) or chicken tacos/fajitas/burritos are a perfectly acceptable mid-week meal. I'm also trying to motivate myself to get a vegetable patch up and running so we can at least get our salad for free. I've also been out and bought a bunch of fruit trees/bushes and stuck them in pots all around our garden so whilst it might be a while, someday we'll also have free fruit. Every little counts, this inflation sitch is going to be around at least 2 years longer judging by history.
Monthly Investment Return: -R503,723 / -$33,582 / £25,186
Investment Return Percentage: -2.8% (-7.5% Last Month)
Annualised Investment Return: 4.8% ( +6.0% Last Month )
OK, lets do this. I have a confession and I owe it to you to come clean as difficult as it's going to be to admit.
I fudged up in spectacular fashion
So if you've been reading since the start you know over the last 2 years I've slowly become one of those annoying crypto evangelists who think that if you don't at lest have a bit of Bitcoin, you're going to be sorry? Yep, that's me, and I actually haven't changed that belief. I have however learned a lot about risk and volatility and leverage and maths in the last month.
And if you read last month's update you know I explained how I'd made a mistake with my crypto trading software. Well, it was worse than I first thought and the total loss (fortunately mostly of profit) was actually closer to R750,000 / $50,000 / £40,000 than the R250k I previously posted. Oooo that hurts!
So having cleansed my soul, I have climbed firmly back on the horse and re-worked (read: de-risked) my entire strategy and I'm back to making profit again, it has set me back about a year though.
Outside of the evil crypto, I've scraped together every last cent we have in cash and doubled down on the markets. We now own copious amounts of every downtrodden US company that is big, loved and not going anywhere. Think Apple, Coke, Amazon, Tesla, Netflix, PayPal etc. etc. if it's taken a beating I bought it, and so far it seems to be working. I'm not stupid enough to think I've bought at the bottom but it has certainly brought my average costs per share down significantly as I already owned those shares in some form or another anyway.
I now intend to Dollar Cost Average those stocks actively which simply means setting an investment amount for each stock e.g. R10,000 and then monitor the price and every time it drops by 5% I buy enough to make the value R10,000 again and if it goes up 5% I take the profit above R10,000 and put it back in my cash pot. As long as you have a share dealing broker with super low fees (I'm using Easy Equities), this works quite well in a volatile market and because I'm not working I can check the prices 2-3 times a day and take advantage of any dips or spikes in the market. I'm keeping my cash pot at 10% of my total investment and any excess is being fed into solar investments as they continue to be my safe haven as more mornings than not in SA the sun shines which means my solar investments are making money. I should also point out that the Dollar Cost Average strategy is for a small amount of my portfolio, this is as well as my long term "buy & hold" low cast passive index ETF investments that are the cornerstone of my stock portfolio.
I feel like I'm starting to control the side-hustle rather than it controlling me. I have 2 big client projects underway in which I'm acting as an advisor on both. This means when they're busy, it's 2-3 days work per week and when it's quiet its maybe half a day a week. This is perfect as it covers the living expenses but doesn't make me feel like I'm faking my retirement.
As I mentioned last month I've detached myself from a number of projects and conversations that weren't, and never were, going to generate any income for me. I will always help friends but I was helping people I'd never met for free which is pretty unfair on my clients who pay me really well to help them. I'm feeling really good about that, as generally, I'm a bit of a softy and I'm very quick to give help even to people who probably, if I'm honest, wouldn't be around in my hour of need. Being just a little more selfish is actually something that's a bit overdue.
I must say, the ability to hustle has proven to be a useful tool in the arsenal during this downturn, I'm able to generate income to invest while these buying opportunities exist which is super useful when the downturn is long term as most of us buy the first dip and if a second dip comes, we have to sit on our hands.
Picking A Winning Stock 2022
Well we're a quarter of the way into our 2022 competition and its as interesting a set of results as ever:
I literally have nothing to say about my investment in Coinbase other than, maybe now would be a good time to make an actual purchase of that stock and thank goodness I didn't decide to buy my stock pick in real life, as I did consider it.
Stuffyuncle is literally on fire with Alliance resource partners, imagine what is going to happen when we're not in the midst of a stock market crash!
There seems to be two groups in the middle, Charlie, Lawrence & Ross holding the line less than 15% from starting point and Jo & Shane making me look slightly less bad.
Still early days and all to play for, so tune in next month for the next gripping update!
A better month than last but still a slight worry on our long term finances. Life however is pretty good and whilst there's some belt tightening going on, we have very little to complain about (Although that never stopped me).
I did notice when I sat down to write this that I have only been posting updates since last September which is now 9 months ago so I'm going to try and write at least 2 non-monthly update posts before my next as I have no excuse and have had a couple of topics requested by readers so watch this space and don't forget to like and subscribe. Cheers!