Today is my two year anniversary. I started this blog exactly two years ago. My first post was a few days later. I learned about the concept of early retirement in July 2014: I stumbled upon a book review of Jacob’s book “Early Retirement Extreme”. And from his blog I also found MMM and 1500 Days etc.
I was immediately hooked by the concept of saving enough to live from the proceeds. It really changed my thinking. I was tracking my expenses and net worth before, but I was not drawing enough conclusions out of it.
My biggest lesson in the two years of blogging: Thinking about money pays out.
I noticed recent yearly net worth gains were around 10k in 2012, 20k in 2013 and 30k in 2014. To recognise the pattern was easy! I made an Excel sheet and projected each year an additional increase of 10k. This would give us 600k end of 2020 and over 1 million in 2024. Our actual savings (from our salaries) were limited, so the additional income had to come from investment gains. At that moment I had around 100k in our brokerage account and about 60k cash in a money market account. There was no way I could achieve those returns with this allocation. So in 2015 I moved the cash into a new brokerage account. And this paid out handsomely. Our net worth gain in 2015 was way above the projected 40k. (There was a lot of luck involved – it just was a fantastic year for my strategies. The same strategies did not work in 2016 at all. Luckily I played it small and later stayed away from them.)
I’m sure, if I had not made this Excel sheet, I would not have moved the money into brokerage accounts and I would not have had such a spectacular year 2015.
A big topic for me is onboarding my wife. To achieve the goal of financial independence it is necessary to cut expenses. We spend around 600 Euros each month for pension contracts. This is no longer necessary, if we can live from our investments early. So we have to terminate these contracts. It was a heated topic for a long time. Finally we see some progress there. I hope to do quarterly reviews of our net worth with my wife. (I manage all our finances and investments.)
This year we started a special savings account were we accrue money for our dream – a camper van. I hope to further reduce our monthly expenses with this account (reducing costs to save more for the van).
My next area were thinking about money produced results is our dividend portfolio. I aim for a 600k portfolio and 4 % dividend yield. Almost no quality stock has 4 % yield at the moment. So I mostly sell puts with a lower strike price and collect some premiums. I’m already at a yearly return of 16k out of a nominal portfolio size of 235k (average yield 6,8 %). This yield will go down, as new investments will have a much lower yield. Nevertheless the progress is fantastic.