Monday, 30 November 2015

November - end of the month report

My Overview

Total portfolio: £ 6,550 (+233)
Debt:- £ 670 (-20)
Net Worth: £ 5880 (+253)

Investments UK: £1879 (+555)
Investments overseas : £1664 (+324)
Cash: £40 (-915)
Pension: £2909 (+91)

Total Income: £1494
Passive income: £5 (0.33%)

Was a good month, where i spend a lot and i saved a lot, i maximized my Romanian First Buy ISA, just because for every 1000 euro/yearly, the government is adding 250 euro. I moved most of the cash on Bitcoin, in a bid to gain something extra for Christmas, and i plan to put at least 500 pounds on property crowdfunding until the end of the year. We will see how it will go, until now is 4% up in 2 days. I plan to take my investment back on the next surge and then play with the profit left there.

Wish you a perfect December!

Thursday, 26 November 2015


Did you ever notice how our American friends have all kind of apps and gadgets to help them with saving, like for example Digit
Good news, seems like they start to work on something similar even for UK. Now, i do not know about the cost, fees, efficiency and all the rest implied, but i will follow up. The product is called ImpulseSave, and they claim something like:

"You already use your computer, tablet or smartphone to buy music, groceries and even find your next home – impulseSave® brings that modern way of thinking to investments.
We’ve also lowered one of the key barriers to regular investment by making it possible to add as little as £1 at a time to your investments through impulseSave®.
By empowering you to set financial goals, regularly review your investments against those goals and top-up easily and quickly to close any gap, we’re helping you form the habits of a long-term investor. Reaching your goals has never been easier."

You can read all the presentation here, to check about. 

Wednesday, 25 November 2015

Random thoughts

What i read nowadays?

1. A mindset lesson from T. H. Eker. Click here
2. New side hustle. Did you ever dreamed to become a computer geek? Learn to code and pay what you want for it. Click here. Only until 1.12.2015. Almost free. One dollar per language, thanks to Project Hope.
3. Some quote that stuck in my mind: ,“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” (Ayn Rand)
4. Today dilemma: As i need to invest some money at the end of December, should i just buy some Bitcoin, as just reached the low point, or not? (The good news here is that finally Visa did something to facilitate the use of Bitcoin - click here. The bad news is that the card is available only in US.)

Tuesday, 24 November 2015

Some interesting podcasts for people who want to achieve financial independence

Some good ideas in all those podcast i am listening in the last 3 days. When you go to work, when you run or even before going to bed, listen and learn some new cool shortcuts on your way to FI.

Budgeting made easy - Jesse Mecham

Click here

Wealth of auto-pilot - Never work again strategy - James Clear

Click here

Financial planning simplified - 6 ideas you need to know

Click here

Monday, 23 November 2015

Why do you want to become financial independent?

It is a 'freedom from' or a 'freedom to'? Think about your motivation. And listen to this interesting podcast to find more about. That all for today.

See you soon

Sunday, 22 November 2015

3,2,1 go!

Talking about FIRE with old and new friends, i just remembered why i started this personal journey to financial independence. It was just a phrase somebody told me.
"Do not spend your days trying to play the role chosen for you by other people!"

It was simple like that. Somehow those words went straight to my head, reached my mind and start growing, bigger and bigger. A good friend told me that and i just believe him.

How did you start?

Wednesday, 18 November 2015


Seems that i had a big bunch of expenses this month, but i also saved quite well. And as a personal achievement, i just invested half of my planned holiday expenses in a short term project, thinking that i will just take the money if i needed. Seems that i am so driven to achieve my financial independence, that i managed to use only half of my holiday expenses, doing all that i wanted to do, and i still got half of the money in my accounts.
Conclusion: It is always room for improvement. Funny enough, when i went to my holiday, i was worried i could not have enough money.

P.S. 20% of unexpected expenses, also covered from my 50% of the initial sum. Clap-clap!

P.S.II  If you are quite bored and want to listen something funny (and maybe learn something new) you got one link here, working for the next 6 days.

Sunday, 15 November 2015

Public opinion

Those days i meet with my missed long time friends from the little town where i was born. I just noticed something strange. Here, in this place where my adventures begin, everyone is still thinking, that it is normal to spend everything you got that month, to buy newest car, phone, build a massive house, and that saving is something you will not do. Never ever. You can max you credit cards instead, if you need money. You can pay them all your life, this is sign you are a normal person. You are probable not of this planet if:
- you can save 50% of your income
- you have no debts (God forbid, this is truly a blasphemy!)
- you want to never work again
- retirement is for people older than 65, only that you are allowed to enjoy life.

Seeing all this, i am a bit like that legendary god of luck, Janus, with had half-face laughing, and half-face crying. I was working out some little hints. One to pay all debts and never do it again, buy only with cash. If you are as rich as you think you are, pay cash for everything you buy. As a challenge. To another friend who is always surprised to have extra expenses, but every month is stuffing another 10 new clothes in his drawer, i challenge him to make an emergency fund of 3 months expenses. To one who told me that he will always have money for everything, i challenge him to save 10% of his monthly income in a long term savings account. Y know i used their big big big Ego, but i am curious know if it will work. I told them that i will give them the next advice only after all three will fulfill their challenge (help and support each other, isn't it?). "Never work again" is a very powerful concept that lure everyone in doing it. It was right to use all those tricks or not? Morally wrong? Hush-hush! And i will do it again any time.

Saturday, 14 November 2015

Free credit check link

I was testing this free credit check who in fact is not checking, just doing an approximate of your credit check. I simulate different versions, and no, it is not very accurate in my opinion. Feel free to play with it. Could be an interesting exercise.

Wednesday, 11 November 2015

A new hobby

I just found a new hobby, to say it somehow, or maybe an alternative way to motivate myself. Which one it is, you will ask? I am reading about people that already reached their financial independence and retired from the "work to live"cycle. I am imagining myself reaching that point. And is so amazing that i cannot believe that it is possible. Yes, i am still like 4-5 years away, but is so good to dream about. I read about someone post, and i want more and more to go there faster. I am tweaking with numbers, i am spending less. It is making me improving myself in ways i couldn't believe it is possible. You can try it. If you are not there yet. Just to see what would you feel.

Saturday, 7 November 2015

New ideas - testing phase

Discipline equal freedom.
(Jocko Willink)

* Looking around i found a growth fund called Trident, and their performance is at least puzzling. For what i understand their strategy is something like US small cap value bonds , gold and US long term bonds. Still, seems too good to be true!

** Second, we will talk about the Trinity Study. In finance, investment advising, and retirement planning, the Trinity study is an informal name used to refer to an influential 1998 paper by three professors of finance at Trinity University.It is one of a category of studies that attempt to determine "safe withdrawal rates" from retirement portfolios that contain stocks and thus grow (or shrink) irregularly over time.
Its conclusions are often encapsulated in a "4% safe withdrawal rate rule-of-thumb," which had previously been published in Bengen (1994), based on the same data and similar analysis. The rule refers to one of the scenarios examined by the authors. The context is one of annual withdrawals from a retirement portfolio containing a mix of stocks and bonds. The 4% refers to the portion of the portfolio withdrawn during the first year; it is assumed that the portion withdrawn in subsequent years will increase with the consumer price index (CPI) to keep pace with the cost of living. The withdrawals may exceed the income earned by the portfolio, and the total value of the portfolio may well shrink during periods when the stock market performs poorly. It is assumed that the portfolio needs to last thirty years. The withdrawal regime is deemed to have failed if the portfolio is exhausted in less than thirty years and to have succeeded if there are unspent assets at the end of the period. The authors back-tested a number of stock/bond mixes and withdrawal rates against market data compiled by Ibbotson Associates covering the period from 1925 to 1995. They examined payout periods from 15 to 30 years, and withdrawals that stayed level or increased with inflation. For level payouts, they stated that "If history is any guide for the future, then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds during any of the payout periods shown in Table 1. In those cases, portfolio success seems close to being assured." For payouts increasing to keep pace with inflation, they stated that "withdrawal rates of 3% to 4% continue to produce high portfolio success rates for stock-dominated portfolios." The authors make this qualification:

“The word planning is emphasized because of the great uncertainties in the stock and bond markets. Mid-course corrections likely will be required, with the actual dollar amounts withdrawn adjusted downward or upward relative to the plan. The investor needs to keep in mind that selection of a withdrawal rate is not a matter of contract but rather a matter of planning.”

Other authors have made similar studies using back-tested and simulated market data, and other withdrawal systems and strategies. The Trinity study and others of its kind have been sharply criticized, e.g. by Scott et al. (2008), not on their data or conclusions, but on what they see as an irrational and economically inefficient withdrawal strategy: "This rule and its variants finance a constant, non-volatile spending plan using a risky, volatile investment strategy. As a result, retirees accumulate unspent surpluses when markets outperform and face spending shortfalls when markets under-perform." Laurence Kotlikoff, advocate of the consumption smoothing theory of retirement planning, is even less kind to the 4% rule, saying that it "has no connection to economics.... economic theory says you need to adjust your spending based on the portfolio of assets you're holding. If you invest aggressively, you need to spend defensively. Notice that the 4 percent rule has no connection to the other rule—to target 85 percent of your pre-retirement income. The whole thing is made up out of the blue." Ironically, the 4% rule of thumb would, in many instances, mandate a more frugal level of retirement expenditures than a portfolio that was fully invested in government inflation-indexed bonds, such as U.S. Treasury Inflation Protected Securities (TIPS). As of mid-October 2008, Treasury Inflation Protected Securities (TIPS) boasted real yields of approximately 3%. A laddered, 100%-TIPS portfolio yielding 3% real would sustain a 5% safe withdrawal rate over a 30-year period. A 100%-TIPS portfolio yielding 3% real would not only be less volatile than a diversified, part-stock portfolio, but also safely sustain a much more generous level—25% more generous, in fact—of retirement expenditures than a diversified portfolio to which the "4% rule" was applied. While a 3% real TIPS yield is well above historical averages for TIPS yield, even a TIPS portfolio that yielded only 1.3% real would sustain a 4%, inflation-adjusted, safe withdrawal rate over a 30-year period. The original Trinity study was based on data through 1995. An update of their results using data through 2009 is provided in Pfau (2010). Shortly afterwards, the original authors of the Trinity Study published an updated study, also using data through 2009. The procedure for determining a safe withdrawal rate from a retirement portfolio in these studies considers only the uncertainty arising from the future returns to be earned on the investment. Another major uncertainty is the amount of spending that will be required each period to provide a given standard of living. For instance, there is a small chance each period of an emergency arising that will require a large extra withdrawal that may be comparable in size to the loss from a financial bear market. An example is major repairs to a home not covered by insurance caused by water incursion. The effects of such possible emergencies in addition to uncertain investment returns are considered in Pye (2010). Under conditions where a 4 percent withdrawal might otherwise be reasonably sustainable, reasonable assumptions about the chances for an emergency each year and its cost reduce the withdrawal from 4 to about 3 percent.
This latter analysis also differs by using the Retrenchment Rule to determine the value of the withdrawal each period. This rule is discussed in Pye (2010) and also Pye (2012). When using the Retrenchment Rule the default withdrawal each period is the prior withdrawal adjusted for inflation as in the earlier studies. There are conditions, however, when this default withdrawal is not applicable. In particular, the initial withdrawal is related to the prior standard of living of the retiree, not just the withdrawal that is reasonably sustainable. Also, the withdrawal for a period is reduced when a test indicates that such retrenchment is necessary. This occurs when the risk of running out of funds before the end of a plan has become too high given the size of the then current withdrawal and the funds that remain.

This is what the economist are saying. But, on the other way, they are also advising us to retire at 65, so i would take their advice with a pinch of salt. I would like to see a similar study done on Dividend-Growth Strategy, but i didn't find anything yet. Also, those studies were done during the dot-com bubble, so i would consider them a bit biased towards those results.

Tuesday, 3 November 2015

Today thought - November first tips and tricks

* As T.H.Eker teach at his seminar, one very easy method to check how much you need to become financial independent, now i expect everyone to say what do you think about his strategy.
Example: How much you need for
Month ===> Year ===> +50%
1500             18000         24000

If you are good enough to invest and have 10% return (average return in real estate in Canada)
then you need 24000 x 10 = 240000.
Pretty close to my way of doing it, I had 242.000 with my method. But i do not know the real estate market in Canada, in UK, in my town, is more like 7-8%. With 11 months rented per year. Without other expenses.

** Speaking about attitude, i found the original article about Hell, yeah! strategy. Click here to read it. I started to used successfully, and is making a difference in my life.

*** Motivational phrase: Sacrifice instant gratification for long term success.

October 2015 end of month report

My Overview

Total portfolio: £ 6,317 (+621)
Debt:- £ 690 (+50)
Net Worth: £ 5627 (+671)

Investments UK: £1324 (-446)
Investments overseas : £1310 (+90)
Cash: £955 (+791)
Pension: £2818 (+276)

Total Income: £1726
Passive income:£29 (1.68%)

Debt: I managed to put all my debt on a Zero interest card until 1st of April. Now i have 2 options, to pay it quickly just to finish my year without any debt, or just to pay it right before the interest start. I am paying small amounts every month, I didn't decided what to do. But in terms of personal motivation, will be something big to finish the year with no debt, so probably i will do this.
This month was not bad, with £671 added to my net worth. Investments in UK, I got some savings reaching maturity, and i start to build some cash emergency fund. Overseas, surprisingly pound vs RON quote went down so my savings there gain some value, As for pension, is going up automatically. I started to calculate the percent of passive income from my monthly amount. Not a big number, i must to admit. But here I am, starting my 11th month on my way to financial independence. A difficult month, with some big expenses. All I want is to finish it with a positive balance. Cannot wait for my end of the 1st year report.

As you can see i am on my way to use a different report now. I am also thinking to use a 6 sub-accounts system for my income, that will probably look like this:
1. FIRE  -at least 10%
2. Long term saving 10%
3. Education 10%
4. Necessities - no more than 55%
5. Me!Me!Me! -10% to be used by ME  by the end of every month
6. Charity -5%

I will test it for November to see how is it going.

Tips and tricks

Motto of the day: Lack of money is not a problem, it is a result of your actions. Change them. (T.H.E.)

* Exploring the hidden corners of internet, i found some interesting things. One is a very complicated and complete early retirement calculator. I test it, seems to work well. Want to play with? Link here.
** Also, from the same guy who did the before mentioned calculator, an interesting article about predisposition to fraud. Most of us know this, but i will put the link here especially for one of my friends, you know who you are. Huh!
*** Best strategy to achieve financial independence in 10 words.
1. Working income => 2. Savings => 3. Investments => 4. Passive income
(Faster: Simplify your life!)

Monday, 2 November 2015

Millionaire mind intensive day 3

And i finished. What was a very interesting feeling, was working close with 800 like minded people, all of them on their way or already financially independent. It was amazing, and i will cherish every one of those 3 days. You know about how did you felt when you meet this month at the FIRE Meetings? At least how i see it in my mind, but i am sure that in reality was much, much better! Now imagine hundreds of people like us. And you know most of them after 3 days. A lot of friends made, a lot of ideas, theories, techniques, improvements, tips and so on. Coming from people who already have the habit to over-deliver. A very good event, who in the end gave me some clarity, structure in my thoughts and direction. I will quantify the effects as i am a statistics fan, and i will tell you.

Tomorrow, in fact later today, i will do my monthly check and i will post it here.

See you. Good night.