October 2020 - Monthly Finances
Total Pension Pot: R14,511,832 / $853,637 / £659,628
Previous Month: R13,945,852 / $820,344 / £633,902
Month number 6 was a little belter!
A nice little boost to the coffers this month after a dreadful result in September.
The overall increase of our net worth for October was R565,930 / $33,293 / £25,726 which is a personal best increase and more than offsets the losses of the last two months. 3.9% return for the month is way ahead of my minimum requirement of 0.8%.
The result was however, a little wind assisted. If you read all my monthly budget updates you'll know that I've been doing a little hustling, and payment from my clients has not exactly been forthcoming.
Well god bless 'em, they pretty much all caught up in October giving us a nice little cash injection of around R500,000 / 30,000 / £22,500. I did however have to pay for the renovations at the house which came in at around the same amount so it wasn't as simple as just getting paid that drove the increase. The changes I made to our investments and the stock market recovery pretty much did most of the hard work. We also saw a big dip down on the markets in the last week of october so considering that, I'm pretty pleased with October overall.
Stock Market "Vomitility"
October wasn't a good month for watching your investments and it definitely felt like a roller coaster ride. We saw a run of daily increases early in the month that put a definite spring in my step and then at the end we had a vomit inducing mini crash that pretty much took back all of what it gave.
I moved most of our pension investments into ETFs last month and more by luck than judgement, the trades went through on a day when the markets were a little down so I've managed to come out fairly unscathed from the volatility with those investments. Unfortunately the non-pension investments didn't have the same luck and took a battering. I'm taking the win out of that though and have bought the dip with pretty much all safe haven cash funds now deployed into the market. I'm hoping that I'll be able to pull some out (with profits) during November but it looks like Donny Trump & Joey Biden are going to decide my fate there.
It seems that the US markets were hoping for a COVID stimulus package and that was pushing the market up, but when it didn't happen, all the goodness drained out again. I don't know what happens next but by the end of the week we'll know who the new US president is and it looks like that is going to define my happiness for a little while despite the fact I don't live there.
I deployed most of the revenue I earned from the side hustles into Solar Panels and Cattle as they are still by far my favourite investments. My plan is to make the Solar Panel & Farming thing the primary activity of my business when I can't get (or don't want) any more paid consulting gigs which I estimate is probably another year or two away.
I bought more blueberry bushes taking me up to a total of 75 of my 200 target and I purchased another 11 cattle taking my total up to 17 cows with 4 being pregnant, so in my head, the herd is now 21 strong. Solar investment for the month was around R410,000 so I really boosted that investment. Total investments into Solar power is now just short of R1,300,000 / $76,000 / £59,000, so I'm knee deep in renewables now. Once all of the panels are installed, that should yield an average income of around R18,000 / $1,060 / £800 per month for the next 20 years so that will be roughly about 20% of our living costs from renewable energy. That makes me feel good.
Overall investment growth
Investment Growth: R110,102 / $6,477 / £5,004
Monthly Investment return: 0.8%
Annualised Return on Investments 6.7% - (7.0% Last Month)
Investment performance was fairly pedestrian in October due to the dips in the market last week but I'm still pleased with the result as I now think the markets have shed some fat, which considering the Coronavirus situation in the northern hemisphere right now, is a very good thing.
The South African stock market continues to be in the doldrums so I made the decision to sell off the last of my SA based shares that I picked up at the start of COVID and consolidated it into global and US focussed index trackers. Between that and my "Magnificent 7 ETFs" in the pensions, I'm now pretty much fully exposed to global markets for the money we have in stocks and shares. Clearly the COVID situation is going to bring some serious short term pain but I'm taking the long view to make myself feel better ( ithink they call that the Ostrich approach). My biggest risk right now would be to do something stupid like sell and move into cash so there will be a lot of fingers in the ears, eyes shut singing loudly moments in the run up to Christmas!
I'm a little bit concerned that our annualised return dropped from 7% to 6.7% as that is a key indicator of investing success and needs to be north of 9.5%. However, that is actually driven down by putting so much into new investments this month (which are yet to show any returns) so I'm hopeful that we'll see that go up as a consequence of those extra investments starting to perform later in the year.
Living Expenses: R73,761 / $4,339 / £3,352
Budget: R62,000 / $3,647 / £2,952
Another overspend this month on the budget but a distinct improvement from last month. Main drivers were the building work still dragging on so I have to keep unexpectedly buying wood or screws or general hardware to get it done. I'm calling time on the building work at the end of this month even if it's not finished. I'm just over it!
We also had a friend staying with us for the last week so that added 50% to the food and drink bill that wasn't planned. All of that should mean that the underlying budget is still good and we're still only R2,000 / $120 / £90 over our budget as a monthly average for the year so I'm not concerned but will be tightening the belt just slightly considering the current investment roller-coaster ride.
So a sizeable shift in our net worth this month but with November a complete crap-shoot in terms of how it might go for us, a little frugality needs to creep in just to ensure the finances stay under control.
It's actually my first wedding anniversary today so there will be a minor splurge there on a visit to a wine farm, a boozy lunch and some nice flowers for Mrs H but other than that, we're still in lockdown hell for the most part.
I'm pleased about getting paid at last for the side-hustling and I'm pleased that pretty much 100% of the income has been deployed into social investments that will pay us back later, that feels like the work was worth it. I'm quite focussed on deploying all my business revenue into the solar and impact farming ventures and making that a business in itself, a kind of social investment house kind of thing. That's something I could get excited about, won't take much time, is doing some good and doesn't tie me down, so let's' see where that goes.
I've already written my 6 month review post and didn't want this month's update be a repetition so I'll keep this one short and sweet. That post will be out before the end of the week.
As of 31st October 2020: At our current budget, investment performance and inflation rate, we have enough money to last until I am 70 - That's 26 Years.
Until next month, keep living.