Month-end: August 2020

Another month comes and goes. There’s been big changes for the family but it feels a bit like the changing of the seasons from Summer to Autumn. Work and jobs and life and fun – we all adapt to the setting sun.

This month things have really been good for us. Our net worth is on the up and even though the markets are not performing really well, we’ve done well. Annual increase in net worth is back positive again (after a blip last month) and we are within £5k of our peak net worth – which we might beat next month (fingers crossed!)

  • Net worth close to a record high (with pessimistic house prices)
  • Pensions are above £500,000 for the first time ever! That’s a record!
  • FIRE Assets at a record high as well!

Family Spending

We spend just over £5,000 last month and I for one think that that’s not terrible. I seem to have a very tenuous grasp of frugality. Unfortunately for all of you who don’t have kids and think that five grand is a huge amount, it’s part of life for us.

The kids nursery cost about £1,800 for the month – I’ve not really written much about childcare but it’s definitely something that is worth paying extra for a good one! Our local nursery is the best (over subscribed and with mainly very good kids + families) and is only a 10 minute walk away or 5 minute cycle). Household spending including mortgage interest, car depreciation, bills, £500 home improvement provision came to about £1,100.

Spending came to £1,450 which included annual car insurance for our second car (net cost only £160 thanks to QUIDCO and my method for saving money). The rest of the money was spent on a good pair of boots (£200+) for the Lady – a theme picked up by SLIS, Eating Out (to help out) and 100kg of beer that has not arrived yet.

Future Spending

We have booked someone to replace our worn out downstairs carpet with new floorboards. Total cost should be about £6000 for 95m2. We have a big house and with that comes big costs. The work could have been done back in 2016 but by holding off until now that £6,000 is effectively less due to investment gains saving us money. Unfortunately, I hoard so that I may spend it one day and that day has come.

Income

My income from my work has sort of dried up and we are now living mainly off the Lady’s employment. Luckily she was made redundant and got a nice pay-off this month. She also started a new job which is good for her – even though she has a bit of buyer’s remorse. On future employment earnings, we won’t break even if we spend £5,000 a month – which means we need…

Dividends

What I call dividends includes actual dividends, interest and income from my secret side hustle. This month it was just shy of £5,000. That was a split between VCTs at £1,200, ISAs/Shares at £350, P2P lending at £1,300 and my super secret side hustle at £2,000. This side hustle is something I’m putting a bit of effort into now that my employment is on the wane.

I’m really happy with this month’s dividend total as it is by far a record haul, the 6 month average is above £3,000 which was a target of mine and if you ignore childcare costs, it makes us Financially Independent. Long may it continue! Except about £1,000 of the P2P lending was from a bad debt that paid off (partly) – I don’t expect many more bad debt repayments.

GFF dividends over time – soaring to the sky!

FIRE Numbers

Personal Withdrawal Rate is at an average of about 4.6% right now. For just FIRE funds it’s 10.4% and without childcare it’s 8.1% – meaning we spend 10% and 8% of our funds every year at current levels. As anyone who knows their mantras, spend less leads to saving more which helps those numbers. Our average dividends cover about 86% of our total spending.

Family Stuff

In August we had some great times. We went to Ireland to see family which was great. We had some great weekends and also some great weekdays as the Lady was between jobs and I was free! I got a nice farmers tan from walking in Fife for the day. We went to Blair Drummond Safari Park which was fantastic. The kids are loving nursery and we are enjoying the last rays of Summer sun before Autumn hits us fully.

Great blog posts I’ve read this month:

I hope that everything is going ok for you – and even if it’s not that you remain happy and kind!

Thanks, GFF

11 comments

  1. Thanks for the mention :-).
    £5k sounds like a lot, but if 86% was covered by dividends, then, you are pretty much almost at your FIRE number/date. Question is- when are you going to pull the trigger?

    Liked by 1 person

  2. Thanks for the shout out. That pension figure of £500k is very impressive. Child care costs are always a killer, I remember them well. At the time it seems like they’ll last forever, but eventually they do end. Luckily for me I’m well past that with my kids, but with my eldest off to uni in a month’s time then I’m not exactly of the hook with my kids costing me money! And in two year’s time I’ll have two kids at uni at the same time. I’ll be interested to see what impact that has on my finances.

    Liked by 1 person

      • Yeah, that only works though if your children choose to stay in Scotland for uni. I have spent about the last 3 years trying to persuade him to stay up here so he doesn’t have to pay the fees, all to no avail. He says the course he wants to do is better down south. As he’s managed to get into Cambridge though I’m feeling like maybe the fees will be worth it. It’ll certainly be an experience. The younger one is happy to stay up here though and save himself a fortune.

        Like

  3. He knows he’s going to have to go into debt to pay for it. Luckily Trinity that he’s going to are a really rich college so they subsidise lots of things. The halls are cheaper than other unis and they even have a free launderette. Just a shame about the nine grand a year fees!

    Liked by 1 person

  4. I’m surprised more landlords aren’t taken to court more often, as I still read in the press of renters complaining that their landlords have ‘kept their deposits’, which would only be possible if they have (illegally) not registered the deposits with a security deposit scheme.

    The security deposit schemes should handle any valid disputes between landlords and renters so it shouldn’t be possible for someone to ‘lose’ their entire deposit, unless it was deemed absolutely warranted by the security deposit scheme provider, eg they trashed the place.

    Liked by 1 person

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