Saturday, December 28, 2013

Self analysis 2013

In January I posted my financial goals for 2013.  It is time to review these goals and see how I did. For each goal I have given myself a grade from A to F.

  • Goal 1: "I save more than 65 percent of my net income in 2013". I ended up saving 65,2 percent of my net income. This number could have been even higher (maybe 70 percent) if I had been a little more carefull with my spending. Grade A. 
  • Goal 2:  "I have a net worth of more than $90,000 by December 2013". I reached $90,000 in July 2013 and ended up with almost $130,000 in net worth by the end of the year. The 2 main reasons behind this is (1) higher than expected income from my new job (since February) and (2) a very good stock market.  Grade A+.
  • Goal 3: " I have an emergency fund with $10,000 in a separate account by December 2013" I didn't reach this goal. I saved a lot more than $10,000 in the bank this year, but most of that money is tied up towards buying a home. I now have about $5,000 available for emergencies, but not in a separate account. I guess this goal will be on my goal list for 2014. Grade D.

I accomplished 2 out of 3 goals, and ended up with the grades A, A+, D. Overall I am very happy with this year. I will soon post my financial goals for 2014. 

Wednesday, December 11, 2013

December 2013: $129,979 (+$8,668)

Bank accounts$70,528
Investment account$98,171
Pension savings$9,444
Student loan$–48,164
Net worth$129,979
Burn rate6,2 years
Savings rate65,2 %
Millionaire month   April 2025

Large increase in net worth mostly because I worked a lot extra in November. The last 12-16 months have been extraordinary, with relatively high income, low expenses and more than 20 percent annual return from my index funds. I surely don't expect the same rate of increase in net worth the next 1-3 years, but an increase of between $2,000 and $5,000 per month is realistic. 

Monday, November 11, 2013

November 2013: $121,311 (+$9,187)

Bank accounts$69,847
Investment account$90,291
Pension savings$9,338
Student loan$–48,164
Net worth$121,311
Burn rate5,7 years
Savings rate62,2 %
Millionaire month   May 2025

Great month because of extra earnings from work and a good stock market. I have moved nearly one third of the money invested in mutual funds to a "home-savings-account", a bank account with a good interest rate (now 4.65 percent), where the money is tied up and can only be used to buy a home. I now have about $65,000 earmarked for buying my first home.

Friday, October 11, 2013

October 2013: $112,125 (+$6,095)

Bank accounts$27,294
Investment account$124,597
Pension savings$8,902
Student loan$–48,668
Net worth$112,125
Burn rate5,7 years
Savings rate66,9 %
Millionaire month   September 2025

Wednesday, September 11, 2013

September 2013: $106,030 (+$6,064)

Bank accounts$26,408
Investment account$119,451
Pension savings$8,839
Student loan$–48,668
Net worth$106,030
Burn rate5,61 years
Savings rate67,1 %
Millionaire month  October 2025

Friday, August 9, 2013

August 2013: $99,966 (+$4,715)

Bank accounts$26,832
Investment account$113,146
Pension savings$8,686
Student loan$–48,668
Net worth$99,966
Burn rate5,37 years
Savings rate70,3 %
Millionaire month   January 2026

Thursday, July 11, 2013

July 2013: $95,251 (+$5,769)

Bank accounts$25,215
Investment account$110,663
Pension savings$8,540
Student loan$–49,167
Net worth$95,251
Burn rate5,62 years
Savings rate71,4 %
Millionaire month   March 2026

Another positive month after the small dip in net worth in June. About 70 percent of my assets are now placed in the stock market (index funds). The remaining 30 percent is in different savings accounts (mainly savings towards buying a home). 

How I keep track of my net worth and estimate future net worth:
I have a large Google Drive spreadsheet where have I put in all my income, expenses, assets and liabilities, with one row for every month since 2004 (more accurate numbers since 2010). Below are some diagrams made from these data (all should be self-explanatory):

In the same spreadsheet I also put in my expected future income, expenses, savings etc. for every month up to age 75. Given a reasonable rate of annual return (I now use about 5 %), my spreadsheet now shows me that I will reach:

~$110,000 by the end of 2013
~$150,000 by the end of 2014
~$220,000 by the end of 2015. 
~$280,000 by the end of 2016
~$350,000 by the end of 2017
~$410,000 by the end of 2018. 
~$480,000 by the end of 2019
~$560,000 by the end of 2020
~$630,000 by the end of 2021 
~$710,000 by the end of 2022
~$790,000 by the end of 2023
~$880,000 by the end of 2024
~$970,000 by the end of 2025

... and that I will become a dollar millionaire by March 2026. All these predictions are of course changing every time I change the numbers in my spreadsheet.

Tuesday, June 11, 2013

June 2013: $89,481 ($–1,193)

Bank accounts$32,006
Investment account$100,317
Pension savings$6,326
Student loan$–49,167
Net worth$89,481
Burn rate5,27 years
Savings rate71,6 %
Millionaire month   March 2026

Friday, May 10, 2013

May 2013: $90,674 (+$7,051)

Bank accounts$31,218
Investment account$102,126
Pension savings$6,497
Student loan$–49,167
Net worth$90,674
Burn rate4,93 years
Savings rate71,2 %
Millionaire month   July 2025

Superb month. My burn rate and savings rate both made large jumps because it is more than 12 months since I bought my car. 

Thursday, April 11, 2013

April 2013: $83,623 (+$1,313)

Bank accounts$31,082
Investment account$95,998
Pension savings$6,206
Student loan$–49,663
Net worth$83,634
Burn rate3,24 years
Savings rate60,8 %
Millionaire month   May 2026

Monday, March 11, 2013

March 2013: $82,310 (+$7,205)

Bank accounts$31,121
Investment account$94,582
Pension savings$6,271
Student loan$–49,663
Net worth$82,310
Burn rate3,26 years
Savings rate62,6 %
Millionaire month   March 2026

Friday, February 15, 2013

February 2013: $75,106 (+$7,001)

Bank accounts$32,226
Investment account$86,414
Pension savings$6,129
Student loan$–49,663
Net worth$75,106
Burn rate3,00 years
Savings rate62,6 %
Millionaire month   June 2026

Tuesday, January 15, 2013

January 2013: $68,105 (+$6,956)

Bank accounts$29,814
Investment account$82,459
Pension savings$5,986
Student loan$–50,154
Net worth$68,105
Burn rate2,70 years
Savings rate62,2 %
Millionaire month   January 2027

Another very good month for my index funds.

Tuesday, January 1, 2013

Financial goals for 2013

Happy new year! Below are my financial goals for 2013. This year I have no spesific income goal.
  1. I save more than 65 percent of my net income in 2013.
  2. I have a net worth of more than $90,000 by December 2013.
  3. I have an emergency fund with $10,000 in a separate account by December 2013.