Welcome to our March 2020 Savings Report. Well, that got unprecedented quite quickly. Even BoJo is in hospital.
As COVID-19 continues to ravage society, the economy and even lives, March has been a difficult month for many. I am sure April will be too.
I expect this is not an unfamiliar story on Personal Finance blogs. Touch wood, we are faring OK. I hope you are too. If you need someone to talk to, I’m here mm at moneymage.net.
We were both taken out with a nasty bug in the middle of March. Whether it was the coronavirus or not, we don’t know, as there’s no testing in the UK unless you are in hospital. Symptoms were: a really bad headache, coughing, chest pain, tiredness, razor sore throat. One day feeling better but the next floored. I didn’t have enough energy to get out of bed for 2 days, and on the third day I just had to go back to bed. It was bad for around 6 days. We both ended up with it around the same time. I’m still not quite over it, with a bad sore throat every morning. Until antibody tests appear, we don’t know if it was just a winter-flu or ‘the covids’.
It led to a week off work for both of us and 2 weeks indoors.
I get sick pay at work, but the other-MM had 6 days Statutory Sick Pay of £113 due to isolation. He is back at work full time now. He is classed as a ‘key worker’ due to his line of work. I get to work from home, with mage dog bugging me for snacks.
Both of our works look like they will weather the storm, but if things get worse, we have our emergency fund to fall back on which covers 12 months of expense.
Whilst our incomes have barely been affected, there are some in a position with no income at all. We’d be having sleepless nights if we’d be worried about getting into rent arrears or having to try to negotiate a mortgage holiday. It also means our critical expenses are way low. Food. Bills. Council Tax. We can live on around £650 a month for the two of us if we need to.
Our holiday was also cancelled. We had a holiday planned for the last week in March, but couldn’t go. We were uninsured so it’s a couple of hundred down the drain. I don’t know how much family travel insurance is, but I expect that plus the excess wouldn’t have made much difference. This is definitely one of those cases where plans are worthless, but planning is everything.
I’ve really let the blog slip. This is for two reasons: One: A matter of priorities. Two: motivation. I do have a draft post ready to go, but it just doesn’t feel like the right time. The most important thing at the moment has been our health and wellbeing. I’ve also been investing in myself in other areas: specifically accelerating some work-related skills to help stand out.
Finance wise, we’ve lost a little income with the other-MM off work for 6 days. I’ve ploughed more into my pension to make use of my end of year pension allowance and the markets are low, why not. Unit cost averaging in effect! Or as the kids say, stonks are on sale. Other than that, we’ve changed nothing. Our savings rate is actually up a little, our expenses are down as we haven’t left the house to spend any money.
Let’s take a look at how COVID-19 continues to impact our Saving and Investment numbers. You can get all Savings Reports at the best of Money Mage.
March 2020 Savings Rates
| Date | SR | SRp |
|---|---|---|
| March 2020 | 66.34% | 80.64% |
| February 2020 | 60.7% | 77.9% |
| January 2020 | 64.3% | 72.0% |
- SR = Savings Rate
- SRp = Savings Rate inc. Pension
Savings Rate is up this month due to us not really leaving the house at all. I’ve also contributed more to my pensions to make use of end-of-tax-year Pension Allowance and cheap stocks.
Towards Financial Independence
Our Financial Independence number is quite conservative. This table shows the number of years to achieve Financial Independence in various cases.
| Date | FIh | FIp | FI |
|---|---|---|---|
| February 2020 | 4.3 | 12.5 | 17.4 |
| January 2020 | 4.2 | 12.5 | 17.5 |
| December 2019 | 4.3 | 12.6 | 17.6 |
- FIh = Years to FI based on Total Assets.
- FIp = Years to FI excluding the house, but including illiquid pensions.
- FI = Years to FI excluding the house and other illiquid assets.
Our net worth took a beating this month, so our path to FI has stagnated in 2020. Fingers crossed things start to pick up later in the year. We’re saving and investing as normal, so if things pick up we are well placed with some unit cost averaging.
March 2020
I will warn you again this month: paying attention to net-worth fluctuations during periods of volatility is a fool’s game. Please just hang up now.
March hit us harder, especially with the markets bombing. Our investments that are exposed to equities, pensions and my Stocks and Shares ISA have taken a hit of around 10%.
Month on Month net worth was down by a whopping -4.16%. Considering the drop in the markets our diversification of our portfolio is still sheilding us somewhat.
If you were a person to worry and lose sleep - that’s over 20 grand. However, it’s not a loss, as we haven’t sold anything. Almost all of the loss is in Pensions anyway. It’s a paper loss, not a real loss. Pensions go up and down with the markets. I can’t touch them for another 19 years anway.
One thing it has made me consider is further diversiviation over the next 19 years. Imagine if this was during drawdown - you couldn’t be relying on equities entirely.
Year on Year is still up a healthy 11.9%. You can find more details in the review of 2019.
| Type | MoM% | YoY% |
|---|
Asset Allocations
Here you can see asset allocations this month compared to March 2019.
Whilst equity exposure appears very low, all pensions are in global trackers funds. Investment in equities is almost solely via pensions. Although I am now also contributing to an S&S ISA via Vanguard LifeStrategy 80 and a small holding in Vanguard’s FTSE All-World High Dividend Yield $VHYL.
Lifetime
This chart shows our net worth growth since the other-MM started work and I graduated.
You can see the impact of the markets on our net worth this month quite clearly, with our pensions taking quite a beating.
Whilst we’re mortgage free, and on the path, FI let alone FIRE still seems a very long way away. Subscribe now and follow me on Twitter @moneymagery. I hope you like the charts, I am a fan of Tufte*.
How is your journey to FI going?
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