October 2020 Savings Report

Welcome to our October Savings Report.

The end of October was a little volatile with the US election hammering the markets. But never the less, October was another good month for the MM household.

I’ve had a 6% raise and another pretty significant stock grant which will kick in this time next year. A 9-5 can work out just fine. You need to take your chances when they appear.

I’m enjoying my new place of work. If they are going to reward me for a bottom rung individual contributor role - I’m going to carry on doing it to the best of my abilities.

Other than that, October has been yet another uneventful month for us - we’re just carrying on, chipping away at our Financial Independence plans.

Let’s see how the Money Mage household Saving and Investment performance was during October 2020. You can get all Savings Reports at the best of Money Mage.

October 2020 Savings Rates

Date	SR	SRp
October 2020	75.1%	81.4%
September 2020	71.3%	86.7%
August 2020	77.6%	82.9%

• SR = Savings Rate
• SRp = Savings Rate inc. Pension

I had a minor tax refund this month. Tax withholding from exercising share options was a bit aggressive, so that’s helped a little.

We’re just sticking to our plans. Any windfalls are going straight into pension & investments.

We’re averaging 78.7% savings rate (including pension contribs) across the year so far which we’re very happy with.

Towards Financial Independence

Our Financial Independence number is quite conservative. Strictly speaking, we’re already FI based on our net-worth, as we’re mortgage free and our outgoings are so low.

But we’re shooting for a FI number and plan that gives us a healthy buffer and a better standard of living.

This table shows the number of years to achieve Financial Independence in various cases.

Date	FIh	FIp	FI
October 2020	1.1	9.4	15.3
September 2020	1.8	10.1	15.8
August 2020	3.0	11.4	16.8

• 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 increased in absolute terms another £20K this month. Year over Year we’re up just shy of £100K.

This is well over double our usual take home income. We’re very pleased and the snowball is truly rolling.

Our conservative FI number is almost certainly going to be hit in 2021, tracking is confirming this. We’re now on track for hitting our FI number when we’re 38. Which is sooner than we were planning.

The other-MM and I have now started seriously talking about winding his hours back in a couple of years time when we hit 40.

October 2020

England is in back in full lockdown. Dundee is now in Tier 3 Scottish lockdown - which means we can’t leave the area. We’re not noticing any day to day change for us. We’re both still at work. The shops are open. We’re walking the dog. The only thing we can’t do is drive to talk the dog a longer walk which is a shame.

We’re so fortunate to be in a good place.

Two of the family have tested positive for Covid. They are both youngish and are both doing OK. Fingers crossed.

Obviously, the big news is the US election. I’ve been refreshing the results like crazy hoping for a great outcome. My faith in humanity has been shaken badly this year. Not just with how people have been behaving over COVID, but the number of people willing to vote for a transparent authoritarian fascist. My faith in people is at rock bottom.

The compartmentalisations made and delusions held know no bounds. And no, I am not a communist, leftist, anarchist that wants to eat your babies then regurgitate them as gender-fluid anthropomorphic foxes.

But a pretty rational centrist.

Anyway, horrible politics and horrible people aside.

We put the shed up in the garden. It was way easier than I expected. The weather just about held out. We can now start moving a load of crap out of the house. We’ll take this as an opportunity to declutter and either give away or bin stuff we don’t need. Who needs crap in their lives, right?

I’m looking forward to Christmas.

Sometimes a Christmas at home with just the other-MM and the dog are the best. And it looks like that’s the kind of Christmas we’re heading towards. A 12lb turkey crown has already been ordered from the local butchers. About half of that feeds us over the festive period, and the rest gets frozen for batch cooked meals.

I know it’s been a bleak year - but the Christmas lights are already going up in houses around Dundee. It’s only early November.

Yous are going to run out of Christmas joy if you peak too early…

Delaying gratification works… And not just for your finances…

Year over Year

Year on Year is now up a very healthy 28%. 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 October 2019.

The rebalancing of our assets out of cash into investments is continuing apace.

We’re also skewing our pre-retirement accessible funds. Pensions are now ahead of plan so I expect over the coming months and years we’ll accelerate pre-retirement investments. We still hold around 10% of our assets in easily accessible cash.

Whilst equity exposure appears very low above, all pensions are in global trackers equity funds. Investment in equities has historically been skewed to pensions due to how tax efficient investing in a pension is.

You can see from the above table, we have quite a significant change this year. With a 8,600% YoY increase in asset allocation in non-retirement locked investments.

This doesn’t reflect growth but our rebalancing towards non-retirement accounts for FI planning.

Our planned rebalancing is now really starting to accelerate. We now have 22% of our net worth in pre-retirement savings & investments. We have increased our equity exposure by 12% of our net-worth during 2020 too. Property is now more healthily less than half.

Lifetime

This chart shows our net worth growth since the other-MM started work and I graduated.

You can see our net worth has recovered from the bottom of the COVID crisis and then some.

We’re mortgage free and on the path to take Early Retirement in our early to mid 40s. If we want to. 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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