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It starting to feel a bit like the clouds might be lifting
Life, Health & Early Retirement - 30 Months Since Retirement
Well, after a somewhat depressing September, October left me feeling like there might be a level of normality returning and that 2022 might not be a complete financial washout.
We'll get to that but life in general feels pretty good right now, the side-hustling is about to quieten down for the remainder of the year, possibly to nothing, and instead of feeling anxious about where the next work will come from, I'm feeling thankful for the opportunity to rest and have a fairly hassle free Christmas with Mrs H.
She and I have found a new hobby (or maybe I've just piggy backed on hers) and we've started going to a local auction every two weeks where we pick up things we find interesting and then we restore / upcycle / repair / repurpose them either for ourselves or to sell for a small profit to fund the next project. I won't lie, we're better at the buying bit than the fixing up bit so our driveway is starting to resemble a scrapyard, which is an issue that needs to be addressed by less auctions and more workshop time! What is important though is that this is proper retirement hobby stuff, and more importantly, its a common interest that we like doing together. Mrs H and I have barely been apart since we met 16 years ago but it's fair to say we are into very different things, which the nightly fight over what we watch on TV is testament to, so having a hobby that's just for us to do together, is kind of cool.
On the health side of things, I got the all-clear on my eye issue in October which turned out to be a condition called "Central Serous Chorioetinopathy" which apparently is fairly common in middle aged men and is linked to levels of high stress or in type A males who are highly detailed or perfectionists. At one time, I would have potentially categorised myself that way but definitely not any more so I'm putting it down to the stressful time I went through losing my father early last year. Either way, its sorted and apart from a check up in the new year I am officially in rude health for what feels like the first time in a long time.
Mrs H is heading to the UK at the end of November to do a bit of work with one of my clients which will also mean she'll get to see our granddaughter before Christmas which is great. She's five so Christmas is becoming a massive deal and there will be a trip to the panto and to see Santa to share the Christmas present list! I have to say I'm a little but jealous as Christmas time in the UK with the dark and cold sitting around a fire etc. etc. is how I associate Christmas rather than Braaing (Barbecuing) in 30C heat, eating watermelon and diving in the swimming pool every hour to stay cool. I recognise when writing that previous sentence that my readers who live in cold countries are now probably playing the smallest sympathy violin ever for poor little me right now!
Unfortunately it's not an option for me to go along as someone has to look after Winston the wonder puppy so he and I will be living like two "bro" bachelors for a couple of weeks doing man stuff, probably with power tools and beer, grrrrrrrr!
I'm currently writing this post from a forest close to a place called Plettenburg Bay which is a pretty beautiful part of the world. A friend of mine recently joined the post-fire community and gave up his corporate life so we've come away from a few days to brainstorm some side-hustle ideas that we could work on together which is also mixed in with a little drinking and me trying to ease his "Oh my god, what have I done" anxiety that everyone gets in the first few months of early retirement. Who knew? 30 months in to my FIRE journey and I'm helping out the noobs like some kind of FIRE O.G..
Net Worth
Our Net Worth: R18,245,739 / $1,013,652/ £912,287
Previous Month: R18,080,458 / $1,015,443/ £904,023
Change: +0.9% (Previous Month +2.3%)
Apart from the ongoing fluctuation in the strength of the dollar which is making our USD based net worth look weird, there was a nice "normal" uptick in the net worth in October.
When I say normal, we need around 0.8% to 1% net worth increase every month to meet my target and ensure we don't need to work again so 0.9% is right were we need it to be.
I'm sure I don't need to tell you, it's been a tough year for early retirees with living costs shooting up and investment performance shooting down which has pretty devastating affect on your future plans when you're looking out 30-40 years ahead. What I am learning though is that the economy / stock market is priced at what is most likely to happen in the future so even though it feels like things are still not getting much better, the worst case scenario is already baked into the markets in my opinion so there's really only one way from there unless one of the growing number of dictators in the world decides to do something idiotic or even worse, Donald Trump gets a second term.
Despite the sea of red that continues through October, I have now managed 4 consecutive months of net worth growth which is inevitably driven by the side hustling but that's OK. Although with little new work on the horizon, I kind of need the economy to start moving in my favour now to continue this positive trajectory.
Investment Performance
Monthly Investment Return: +R369,616 / $20,534 / £18,480
Investment Return Percentage: +2.0% (+2.8% Last Month)
Annualised Investment Return: +5.3% ( +5.1% Last Month )
As I'm writing this a little late this month, there have been some very significant events in the crypto space that have affected me but because they occurred in November, I'll address them in next months update. Although needless to say....ouch!
October however was actually not too shabby with a pretty respectable return which surprised me a bit if I'm honest. I did a quick bit of analysis and it looks like most of the returns come through our offshore pensions. In fact they delivered around R460k / $29k / £23k of upside that tells me that all of my other investments together showed a bit of a loss. The offshore pensions are completely invested in US low cost index tracking ETFs which are the weapons of choice for any serious FIRE enthusiast so its really encouraging that despite the tough times, my core portfolio is still delivering returns. The bulk of the investments in our pensions are across a number of trackers but the 3 main funds are Vanguards S&P 500 tracker (NYSE:VOO) , Vanguard Total Index (NYSE:VTI) and Vanguard Mage Cap Growth (NYSE:MGK). The last tracker in that group (MGK) is pretty much a FAANG fund with all the massive US names you might expect like Apple, Google, Tesla, Amazon etc. which have taken a real beating of late so is the one of the three that is not doing so great, in fact, that fund is down 29% in 2022.
VOO & VTI are by far my "go to" funds when anyone asks me the most common investing question I get asked which is usually something along the lines of "I'm not asking for advice but...if you had X thousand to invest in the stock market, where would YOU put it". My answer is always those three funds but if someone asked me today, I'd probably say just VTI & VOO. The reason I like them is that VOO is simply the top performing 500 companies in the US and they are probably in the top 750 companies in the world so you are simply buying a piece of 500 of the best companies in one of the most developed economies in the world with one of the strongest currencies so you remove so much risk when compared to other funds. If you don't know who is in the S&P 500, do yourself a favour and go take a look here and see how many names you recognise and you'll see why owning a bit of each makes so much sense over the long term.
VTI is very similar and has most of the S&P 500 covered but is much wider with over 4000 US companies as it represents the total of large companies in the US stock market. The fact its so broad means it's a bit more boring but a bit less risky. You are basically betting on the success of the US economy as a whole. You may be thinking "but both funds rely on things going well in the US" and you'd be absolutely right. I subscribe to Warren Buffet's view which is "Never bet against the US" and while that may sound like a fairly arrogant statement and a very "`merican" thing to say, like it or hate it, it's pretty much true in investing terms and I try not to cloud my investment decisions with my personal biases.
All that said, I also diversify my portfolio to include other trackers that cover the UK, China, Europe and total world funds so if the US hits tough times, I have some backup.
Side-Hustles
Pheweee it's been busy in October.
I think I probably worked 15 days in October which while that sounds pretty pedestrian for a wage slave, it s a lot for me and I've found myself getting a little bit stressed out which was a stark reminder of why I got off the hamster wheel in the first place.
I've been doing some pretty heavy lifting on writing contracts for three companies simultaneously which is something I'm pretty good at but it's pretty easy to confuse yourself between what is in each one (they all are for largely the same thing) so I had a couple of square eyed days when I literally confused myself to the point I couldn't function and had to go to the garden and water my plants for a bit to get my head straight.
The good news is that the invoices have been sent and there is a nice chunk of moola due into the business account that will carry us into the new year. That's good because other than a couple of small things, all of my consulting gigs are coming to an end in November with nothing on the horizon so I suspect it will be February or even March before I pick up more significant work.
Luckily that is giving me time to work on my life after consulting plans and whilst its unlikely to make me a billionaire, I launched my new lifestyle business in the first week of November which I'll provide a full update on next month.
I'm really starting to realise just how lucky I am that I can use the skills I picked up when I was working to make money consulting now. As I work on other business Ideas, it's so easy to think "Wow, even if I work really hard all week on this business, the returns will be less than x number of hours consulting". That's a really dangerous trap to fall into and it's because although it pays well, I don't truly enjoy it. Yes, it's nice to use your skills and meet people and help them etc but I think pretty much out of all the people I know who still work, if I asked them the question "If you could do any job in the world, would you pick yours?" the answer would be "Heeeeell no!" and I suspect that's true for most people.
I guess what I'm saying is that the whole point of a FIRE lifestyle is that you save really really hard for many many years so you have the choice of how you spend your days. So regardless of the reward, why would you do something that you don't like as much as something else?
Picking A Winning Stock 2022
Lets check in on Tribal Finances investing gurus and see how the competition is going
I'm actually struggling to write this section of the update as I can't actually believe how bad my 2022 stock pick has been, If it was a horse, you'd shoot it to put it out of it's misery. Coinbase has turned out to be the dodgiest of dodgy stocks in what is quickly looking like a complete mess of an industry. 75% loss in the year so far I feel like taking myself into the corner and giving myself some feedback along the lines of "It's not that you've let me down Mr H, it's that you've let yourself and your readers down that I can't cope with"!
OK, self-pity wallowing over, Stuffyuncle and Lawrenceinvesting are pretty much holding up the portfolio which I think is technically outperforming the market YTD despite being down 16%. The tech stocks are weighing heavy with Coinbase, Nvidia and Alibaba all showing greater than 25% losses. Whatever Stuffy picks in the 2023 competition, I'm buying me some of that as it looks like he is going to be 2 for 2 and I'm actually going to have to give him a proper prize this year
Summary
I know I've been guessing at it for a while now but I'm ready to put a stake in the ground and say that in my opinion, we have another year of economic woes but that the majority of that bad news is now reflected in the market so I'm positive about the future. I'm going to take a hard earned consulting break for the rest of 2022 and enjoy the summer sun and have a relaxed but enjoyable Christmas. I'm loving Mrs H and my new hobby and I'm excited about the work I'm doing on new side-hustle ventures. Things seem be going great. I'm sure it won't be long before some tool comes and throws a curve ball but I'm ready for him/her/them!
P.S. I had the good fortune of meeting (virtually) a few of the Tribal Fi community s in the last month (Shane, Hugo and Ethan) which was an awesome experience so thanks to both of them for reaching out and spending some time chatting about all things FIRE
Finally, I had a request from Gary to do an update post on my experience in investing in solar two years on which I'll be doing in the next couple of weeks so if you're thinking of solar as a potential investment opportunity, tune in for that.
Until next time, keep living.