OK, where did the bloody year go?
Life, Health & Early Retirement - 3 Years & 7 Months Since Retirement
In the words of my late great father: "And there it was....gone!"
My dad loved a good oxymoron or play on words and had a few in his repertoire which he patiently waited for the right moments to use in abundance. "He was conspicuous in his absence", "The silence is deafening" and who could forget "Run both ways and walk back" which he often deployed when he wanted me to do something quickly, usually for him!
But he always used "And there it was gone" around this time of year. I'm actually sitting on Christmas eve typing this blog post wondering how we got here so quickly and just how fast time seems to pass since we retired. It will be 4 years at the end of April and it genuinely feels like it's only just begun.
I think 2023 has been a good year, it's been fairly unremarkable which considering in the last 5 years I lost my father, got married to Mrs H, quit my job, almost died of pneumonia, started my own consulting business and almost had total kidney failure, I'm pretty OK with unremarkable.
I've been very lucky in the last few months to have been speaking to a couple of regular readers (you know who you are) about their FIRE journeys, which I must add, make far more interesting stories than mine. One of which has his finger hovering over the FIRE button and I've been (Hopefully) helping him with the real life practicalities of supposedly throwing away your career for a better life. He has all of the boxes ticked and has a significantly better starting position than I had but I guess like all of us, its the fear of the unknown that makes it a truly difficult step to take. I've been trying to help him understand that the worst case scenario is that if it all goes wrong, the worst thing he'll have to do, is get a job!
He'll get there, and it's been really exciting reliving the anxiety and constant push and pull of trying to pluck up the courage to make that decision. Its made me look back on our journey fondly but it also serves as a great reminder of why FIRE people do it, and that is to have more fun, a better life and to get away from the daily grind of making some faceless corporation who pretends they care about you more money
So in my preamble for this months post, I just wanted to say, if you're reading this and also on your own FIRE journey, go on, do it. Make 2024 your year. As someone who actually did it and is close to 4 years in, it is the second smartest decision I have ever made (obviously the first is asking Mrs H to marry me) and I have zero regrets. Yes, I still side-hustle and I guess if I had to estimate, I would say I've worked around 60- 70 full days this year. But it's been on my terms, doing what I'm good at, not always what I "love" doing but I chose to hit my FIRE button when we only had R12m and we needed R18m, so the shortfall had to come from somewhere.
Considering the amount of "life events" that have happened to us unexpectedly over the last 3+ years of retirement, we continue to move forward, and the ever present threat of failure and the horrific prospect of having to go back to full time work are now so small in the rear view mirror, I've stopped looking at them.
And finally, before we get back to reality and into the numbers, thank you to everyone who reads, subscribes, comments or told someone else about this blog in 2023. I can promise you it is most definitely not a commercial venture but it was consuming content like mine that gave me the courage to do life differently, so if I can pay that forward and help just one person do the same, it's worth every word typed.
I hope you all have an amazing holiday season and that 2024 is your best year yet. Stay safe, stay healthy and if you're into that kind of thing, I find staying drunk around Christmas is a winning strategy for me personally!
This Month Net Worth: R15,653,466 / $845,917/ £667,363
Last Month: R14,990,428 / $796,431/ £655,176
Change: +4.1% (Previous Month +1.6%)
I'll do a proper look back at 2023 next month when I have the full year's numbers but it's looking like we're going to be ending the year strong.
I was pretty much flat out on consulting in November (where flat out for me these days is 3 days per week!) so all that lot got billed and because it's Christmas, will likely get paid a bit early.
At the same time, there is a lot of positivity coming out of the stock markets to indicate that the inflation rates are coming down and it might not be too long before the US Federal Reserve starts cutting interest rates which will have a ripple effect on the rest of the world.
The markets have had a great year and my benchmark investment: Vanguard S&P500 ETF - Ticker:VOO is looking like it will close out the year right around 24% up which is over double it's 10 year average so I have zero complaints about the stock market right now.
It's summer time in the Southern Hemisphere so the big investments I have in solar also pay high rents this time of year so that is also fuelling the numbers until the end of quarter 1 next year.
In terms of the overall number, its great to see we're back over R15m as when I changed my measuring method at the start of the year to reflect a more realistic position with regard to my risk, it dropped from close to R20m to less than R14m so I'm not going to lie, that put a little extra urgency in my step. I think we might see north of R16m by the end of the year which would simply make it our best year since retirement which would be s great achievement as this year had al lot of unexpected expenses.
I don't want to tempt fate but if I could get us back above R18m next year including my risk adjustments, that's a whole different box of frogs right there!
I don't want to confuse the numbers but if at this point your wondering what my risk adjustment is (because your new to the blog or missed it the first time) I essentially wiped off around R5.5m off of our Net Worth at the start of this financial year (March) as I had invested that amount of our life savings into Solar Power investments which are great but carry a fair bit of risk, you can't sell them or get out of them and there's no guarantees that the customers buying your power would actually pay, so I decided to revalue those investments as zero and the rent as income. I also don't include the value of our home in our net worth as it is most definitely doesn't generate any future income (the exact opposite) and we'll always need to live somewhere so I don't' see it as actually having any value to us whilst we're alive.
Monthly Investment Return: R697,055/ $37,669 / £29,717
Investment Return Percentage: 4.6% (+1.7% Last Month)
And in line with the progress above, that makes November the best month of the year so far in cash growth terms but was just slightly less than June in percentage terms as June was a 4.8% return but on a smaller net worth so less money.
With a living expenses target of R75,000, that means we banked 9 months living expenses in November alone which is reassuring.
I already mentioned the stock market growth in November but a quick analysis reveals that the big returns came from our SA based international ETFs that are mostly invested in through our TFSAs, preservation funds and Retirement Annuities. I've mentioned this previously but I've now honed in on just 3 ETFs for pretty much all of our SA based funds that can be invested offshore (We have a crazy rule here called Regulation 28 which means you can only invest 45% of YOUR pension money outside South Africa, bloody bonkers). Those three ETFs are all Sygnia ETFs (because they usually have the lowest fees) and are:
Sygnia Itrix MSCI World
Sygnia Itrix S&P500
Sygnia Itrix FANG.AI Actively Managed ETF
The last one has high fees (0.7%) and is a bit specialised but unless you've been living in a cave, you will have heard the acronym AI pretty much every day in 2023 and this fund is currently riding this wave and whilst I can't remember when exactly I bought that ETF for Mrs H (definitely in 2023) , my dashboard is telling me she's currently enjoying a 1 year return of 97% so I'll look past the <1% annual charge this year!
So it's going great on the stock markets and I've consolidated massively my investments over the last year and that will hopefully stabilise the returns which were pretty volatile in previous years although COVID seems to have created a data black hole for financial trends.
Looking forward, I literally don't have a clue. The noise is positive but with most of the stocks that I invest in at all-time highs, it can't go up forever. My personal strategy is the same as always, stay the course, play around with 5-10% of my net worth chasing the fast trend, buying the dip or generally messing around with my wild investing strategies BUT, leave the other 90% right where it is as it's giving steady annual returns higher than my 12% target and that is literally all I need it to do and we can keep doing this retirement thing as long as we like
Budget & Spending
This months expenses: R81,650/ $4,412 / £3,481
Budget : R75,000 / $4,150/ £3,500
So considering we had to do all of the household repairs, had a trip to the UK and got right royally ripped off by South Africa's medical insurance industry once again, I don't think we did too bad.
Which is good because Mrs H is in her Christmas "Nesting" mode so is painting, replacing and recovering anything that isn't nailed down. To be fair, it's about due and the place is looking great so I'm not going to complain too much but I am bracing myself for a big bill in December.
Fortunately, the home insurance company came good on my flood damage and I received a nice cheque to replace all of my tech kit that was ruined when my man cave (read basement) was flooded at the end of October. Fortunately for me, there was some good quality and quite expensive (From my pre-FIRE corporate days when I would happily blow R50k on a set of speakers for example) items that were damaged, but the things that were damaged, were also fairly old and due for replacement so I have enjoyed spending a bit of cash on myself replacing everything with cheaper tech and re-decorating my man space!
The only other really relevant decision we've made regarding expenses is that as per my previous rants, I've decided to kick Discovery Health to the curb and have swapped us onto the most basic of Medical Aid that covers us for emergencies and chronic diseases and very little else. I'll then bank the money that I've been paying for Medical Aid that looks like it pays for everything but actually weasels out of every non emergency / non-chronic claim.
Time will tell if that is going to be a wise financial decision but what I do know is its a really good moral decision. In my uninformed opinion, I believe that the South African private medical industry is at worst rife with corruption and at best, morally bankrupt so I'm voting with my feet and opting out of the system. I feel really good about that decision and while I understand it is a financial gamble, I've never been a fan of Cartels and as far as I can see, Medical Aid in South Africa fits that description well. I can never be described as a conspiracy theorist but you only have to look at the amount of propaganda saying a National Health Insurance in South Africa will "cripple the country" and "bring SA it to it's knees" to smell a rat. I agree that it shouldn't be implemented by a corrupt government but I refuse to believe that any decent human being (let alone a caring medical professional) regardless of their personal views on class, colour or religion would think that a national system for free healthcare for all would be a bad idea.
I think my dad would have supported my decision and would probably say something like:
"Son, if you're not standing up for what's right, you might just be part of the problem."
I definitely feel like I'm in the minority of supporters' for National Insurance of some kind and maybe that's because I benefitted from the National Health Service in the UK from my first 38 years where my entire family have managed to stay healthy and happy with most living into their 90's having never paid a penny for medical treatment. It has it's issues but it still works for everyone who lives in the UK regardless of who they are, what they earn or where they came from.
The argument I hear is "Why should I pay for somebody else's healthcare". My answer to that is that you already do through their sick pay, social grant or the other impacts on our economy.
Well my nose was to the grind stone all through November, the first half of December and will be again for most of January but then I expect it to tail off as it always does. I did manage to bank revenue equal to a year's living expenses, probably after costs and taxes so that's awesome as it means those investment return's can go straight back into working for us.
The coffee business on the other hand is slowly starting to take shape and I find myself looking forward to the consulting dying off so I can get back to spending time on that. We have now landed on a pretty drinkable coffee after weeks of tweaking and messing with the process and I actually found myself emptying the office coffee machine of its complex single origin, fancy dan passed through a cat/monkey R500 a bag stuff that my friend put in there and sticking our own stuff in instead as he's away on holiday.
There is however two possibilities here and one is that we've created a really good coffee from our own proprietary blend and roasting method that will be the cornerstone of our global domination of the coffee industry as it currently stands....OR......We've created a coffee that I really like but anyone who actually knows about coffee would want to have burned in a pit while the coffee industry holds a public stoning of me in the town square.
Time will tell, but in the great words of Connor McGregor, "We're not here to take part, we're here to take over" so if there's a drawing board that I need to go back to, go back to it I will and I'll keep going back to it until Starbucks are on the phone begging me to sell them our beans.
Revenue from the coffee business so far = R0
Tribal Fi Stock Picking Competition - 2023
Well it's not long to go before the day of reckoning for this year's bragging rights and there's a couple of horses that might be heading to the knackers yard or glue factory after the 2023 competition (No horses were harmed in the making of this blog post).
In a massive fall from grace from a runaway victory last year, I think I can safely use a Scottish colloquialism to describe StuffyUncle's competition this year as: "Humped"
I continue to reserve judgment on Shane who was hoping for a comeback win with Transaction Capital but recent news that they may spin WeBuyCars out of their business into a separate listing would almost certainly put paid to that and his entry in 2023.
Although coming up the rear is Charlie who has seen a change of fortune with PPC and is actually in a respectable double digit return so definitely not a write off at this stage.
Myself and Reef seem to be the also-rans at this stage which is annoying as my bet on NIO is basically Tesla without the Megalomaniac at the helm so I had high hopes and surely the house always wins in Vegas?
Ross and Spike are basically neck and neck with two of the most volatile stocks on the chart so anything could happen there but emerging as a potential winner is no other than Lawrence who showed his foresight with a punt on 4Sight (did you see what I did there?) and is flirting with the highest return we've seen on the competition to date.
Most worrying is that as a group of savvy armchair investors, we have collectively managed to deliver a return of -0.7% across our portfolio when the basic US index is going to post 24%. We need to go into a corner and have a word with ourselves people!
It's shaping up to be a year of financial success with no major incidents and a reasonably clear view into next year that is iceberg free. Although, if there's one thing I've learned about FIRE and investing, it's don't rest on your laurels (never really knew what that meant, but it feels appropriate) when things are going well. There is a shit storm coming, I just don't know how big or when, but it'll be here eventually.
But it's the holidays and there'll be plenty of time for all that after a couple of weeks R&R with loved ones, some good food, good wine and a few laughs. Thanks again for you support in 2023, Merry Christmas and a Happy New Year.
Until 2024, keep living.