Aug ’18 Income and Expenses

So once again things are flying by and I find myself a month behind already – I put it down to a holiday, providing holiday cover and work being very busy indeed.

I am definitely not complaining but time is really pelting on, which makes me glad for the GTP ISA – I don’t need to do anything!

Anyway, onto the more interesting (hopefully!) side of things…

Income

So the usual salary has gone in and a little extra from my other half’s ISA dropped in which continues to build and help. All in, nothing exciting and life continues to move on. And naturally, of course, dreaming of having that stream of cash coming in without having to work!

Expenses

Item Notes Amount
Things I choose not to avoid* Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are.  31%
Groceries All the food and other stuff needed for home  3%
Alcohol for home Home alcohol consumption only 4%
Bicycles / Car related Any costs related to either the bikes or the car  1%
Alcohol Out Generally, its the pub….  6%
Eating Out I include purchased lunches in this as well as meals out etc.  6%
Other My catch all for anything I may have missed….  3%
Holidays Any spending related to holidays, flights etc.  8%
Savings Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension)  38%

* This covers a number of things that I would class as essential for me. Yes, I could move to somewhere cheaper to reduce the mortgage (which in turn would reduce the insurance I have to pay), yes I could reduce my bills by switching energy supplier etc. but it comes down to what I am happy with. There are a few other things in there that are classified as essential that others may object, and so I have just lumped it into there.

So a friends wedding and stag do hit the holiday numbers and alcohol and food out – it doesn’t happen often so I made the most of it! Unfortunately, although the savings rate still looks good, the only way I could keep my GTP ISA going was by eating further into my cash reserves. This will soon have to stop of course.

Other than that things just keep ticking along, no great surprises and mostly keeping a lid on the spending. The holiday and stag do did put a big dent into the costs, however if I can reduce those going forward I will be in a much stronger position.

 

June ’18 Income and Expenses

So I won’t repeat myself in apologising for the delay in getting this post out, but I guess better late than never. I can remember some of June – some weekends away, a week away on work, some days out, all in all a very very full on month…. so without further ado lets look at what that did….

Income

So the final reduced salary hit the bank account – thank god.

To date I have been continually dipping into my cash reserves and they are starting to look rather threadbare. I am sure most people don’t count a company share scheme as being an emergency, but there you go!

My other half’s ISA kicked out more money again which is always nice – a bit of tax free income, yes please! This was a fantastic amount of cash starting to come in and is really helping make it through the reduced income.

Expenses

Item Notes Amount
Things I choose not to avoid* Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are.  41%
Groceries All the food and other stuff needed for home  3%
Alcohol for home Home alcohol consumption only 11%
Bicycles / Car related Any costs related to either the bikes or the car  2%
Alcohol Out Generally, its the pub….  1%
Eating Out I include purchased lunches in this as well as meals out etc.  3%
Other My catch all for anything I may have missed….  19%
Holidays Any spending related to holidays, flights etc.  7%
Savings Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension)  13%

* This covers a number of things that I would class as essential for me. Yes, I could move to somewhere cheaper to reduce the mortgage (which in turn would reduce the insurance I have to pay), yes I could reduce my bills by switching energy supplier etc. but it comes down to what I am happy with. There are a few other things in there that are classified as essential that others may object, and so I have just lumped it into there.

Day to day “Things I choose not to do anything about” is up slightly, reflecting my reduced income and also I paid a one off hit on one of the standards – a story for another day.

So, food for home was up a little on normal but still relatively small amount as I continue to work through the freezer – this was driven up by buying some stuff at a fair…

Alcohol at home. Whooops. So I happened to bump into my favourite Vintners at the above mentioned fair – should last a little while, although not that much… they did have some very nice wine!

Holiday – this was up a bit as we paid the last of the deposit for a friends wedding in August…

Other. Erm. Oh. Bother. I think this may be my inner spendypants person braking out after such a lean 5 months. To be fair some of this was new clothes (long over due), a self breathalyser (legal requirement in France), some new glasses, all sorts of stuff.

Savings rate. Ok this is a disgrace, but I have still left the money going into the investments…. further depleting my cash reserves… almost to empty which is not a great place to be in!

Oh well – onwards and upwards!

May ’18 Income and Expenses

So it is already that time of the month again, and once again I can’t believe just how fast time is flying. Work is keeping me very busy (a good thing as I enjoy it – although I am sure I would prefer not having to work!) and a lot of things going on over weekends so really quite a busy little bee!

Income

So once again my (reduced) salary hit the bank account. This was a real kick in the unmentionables. My company share scheme purchases are still being deducted which reduces the income, and my new tax code kicked in, taking my income down even further. To say I had to watch the pennies this month would be an understatement. I really can’t wait for July when I get a full size pay cheque again, I just hope it is enough.

To date I have been continually dipping into my cash reserves and they are starting to look rather threadbare. I am sure most people don’t count a company share scheme as being an emergency, but there you go!

My other half’s ISA kicked out more money again which is always nice – a bit of tax free income, yes please! This is now starting to become more noticeable and although I said it should be going off the mortgage, for now it is helping cover the gap until I get a full income again.

Expenses

Item Notes Amount
Things I choose not to avoid* Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are.  36%
Groceries All the food and other stuff needed for home  2%
Alcohol for home Home alcohol consumption only 0%
Bicycles / Car related Any costs related to either the bikes or the car  1%
Alcohol Out Generally, its the pub….  1%
Eating Out I include purchased lunches in this as well as meals out etc.  4%
Other My catch all for anything I may have missed….  4%
Holidays Any spending related to holidays, flights etc.  0%
Savings Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension)  52%

* This covers a number of things that I would class as essential for me. Yes, I could move to somewhere cheaper to reduce the mortgage (which in turn would reduce the insurance I have to pay), yes I could reduce my bills by switching energy supplier etc. but it comes down to what I am happy with. There are a few other things in there that are classified as essential that others may object, and so I have just lumped it into there.

Day to day “Things I choose not to do anything about” is up slightly, reflecting my reduced income.

Food for home is lower than it really is as I did a big shop but used up more of my vouchers. Arguably I ought to include the income from these vouchers, and then the expense, but then as I don’t include my bonus / tax refunds etc. I am not going to bother. Reality is it won’t make that much difference to me when I pull the plug given how much buffer I expect I will have!

Eating out was a little high as we went out for a few meals, and I have started eating the odd lunch at work. One for another day.

Other was a little high – this was a few naughty taxis home after an evening out, eye / contact lens check and odd things like that.

Oh. My. God. 52% savings rate. This is my highest EVER! A combination of having to really cut back due to the decrease in pay, and not wanting to change my direct debit savings!

The reality is however never quite as pretty as it seems. Yes it is a very high savings rate, however to keep the £1,100 going into the GTP ISA not only did I not put anything into cash savings but I withdrew some to make sure it was covered. Not a sustainable position to be in.

And what happened to the insurance money I was paying, wasn’t that supposed to be going into the GTP ISA? Well… yes it was. I actually decided it shove it into my other half’s ISA. Hopefully in only a couple more years that will then start paying out enough to cover my day to day living (not expenses, mortgage etc. but the odd food bill, eating out etc.).

Now I have done that, I don’t intend to increase the contributions any further until I max my ISA out, so any future changes or increases will go into mine, and most likely into VWRL.

How was your May?

April ’18 Income and Expenses

Firstly, apologies for the slow progress on posting of late. Fortunately the NHS at its best has helped once again, so things can (hopefully!) get back to normal!

So its that time of the month again when my salary hits and it’s time to review what I have spent my hard earned cash on, and where I could have done better. It felt like a very tight month and that I was having to carefully watch every single penny

Income

So as always I had my steady Salary drop into my bank account, always nice. I get a new tax code for next months income (as I do trailing income), and only a couple more pay cheques with my share scheme contributions coming out. I don’t include any of my personal ISA dividends in my income statement, that is just part of the growth of those portfolios.

The income thrown off by my other half is steadily increasing and starting to make a noticeable impact on my monthly income. It has taken almost 3 years to get this stage, but shows it is worth it!

So, steady as she goes on income.

Expenses

Item Notes Amount
Things I choose not to avoid* Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are.  34%
Groceries All the food and other stuff needed for home  4%
Alcohol for home Home alcohol consumption only 5%
Bicycles / Car related Any costs related to either the bikes or the car  1%
Alcohol Out Generally, its the pub….  1%
Eating Out I include purchased lunches in this as well as meals out etc.  3%
Other My catch all for anything I may have missed….  2%
Holidays Any spending related to holidays, flights etc.  0%
Savings Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension)  50%

* This covers a number of things that I would class as essential for me. Yes, I could move to somewhere cheaper to reduce the mortgage (which in turn would reduce the insurance I have to pay), yes I could reduce my bills by switching energy supplier etc. but it comes down to what I am happy with. There are a few other things in there that are classified as essential that others may object, and so I have just lumped it into there.

So this was the first month of not paying out for insurance which is reflected in the lower “do nothing about” costs. We have also switched energy providers, however this won’t impact on the savings as we will continue to put the same amount into our joint account, it will just go on something else.

The Other and Eating Out were a bit higher than anticipated as we had friends over and took them out (they aren’t English) so a little more expense than planned.

The Groceries were quite high, and this excludes the “free” shopping I have been doing with some gift cards, so a little work to be done there.

Also the alcohol out was a touch more than I had planned, as there was an offer on at Majestic. Naughty Majestic for tempting me like that!

Lastly…. savings rate…. 50%!!!!! I really can’t believe it, I thought that would be an impossible rate and I am REALLY happy with this. The downside is that I have realised whilst my share scheme contributions go out I am burning through cash reserves to keep the money going into ISAs at their levels.

I have made next month an even bigger challenge as I have increased the amount going into my other half’s ISA to cover the cancelled insurance. I chose this rather than an IT at present as it means I get cash flow sooner. Once my share scheme finishes I will consider redirecting some of that into my ISA – although at that level I may just put more into VWRL and not separate it out, keep things simple!

How was your April?

 

The 2017/18 (Tax) Year Performance

So, the end of the tax year has passed and I have pushed as much as possible into the various tax efficient wrappers (ISAs & pensions) to put me in as strong a position as possible.

So first of all some of the stats for the year:

The Benchmarks

Index Performance
FTSE-100 -1.8%
FTSE-250 2.7%
FTSE-All -0.9%
S&P500 13.1%
Dow Jones 18.7%
VWRL 1.2%
VHYL -4.1%
GBP/USD 12.2%

So really a fairly mixed bag out there. The US did rather well last year but not enough to make any real impact on VWRL. The pound strengthened quite considerably over the year (just mood swings around Brexit, or something more – who knows).

So if you had followed the Go T’ Pub ISA approach and just shoved money into VWRL you may have been very disappointed! Now let’s get into a bit more detail.

Company Pension

So the company pension is still, in the grand scheme of things, in its early life. The amount going in each month is still a (relatively) large amount compared to the size of the pot. Ultimately the overall value goes up so I don’t really take much stock on the growth numbers for this. The main thing is that my company put a lot of cash into it, so free money I won’t turn down.

Performance: -0.8%

So down a fraction. Not that bad given the UK markets, but this is a fairly global portfolio (not in the standard fund!). To be honest, I really am not too worried about this the money is going up each month and it all helps. It is too soon (for me anyway) to get any meaningful performance so I will just continue to watch and wait. Let’s see how it looks in a few years time.

Personal Pension & ISA 1

So, how did my IFA do? I am sure this will be of interest to many people – was it worth it for him to take a cut of every single contribution I make?

Personal Pension: 12.4%

ISA 1: -1.1%

So given the make up of the portfolio (I will update my portfolio page at some point!) I am happy with this. No, it is not as high as the US but they are not bad performances.

The first obvious one to me is that my IFA is far better with larger value pots than smaller. I will have to talk to him about the poor performance again in my ISA.

Overall the pension is very good especially as this includes a large injection of more funds right before the tax year end. The cynics out there may say he has underperformed the US market, however only about 20% of my pension allocation with him is in the US market.

If he keeps this performance up then by the time I get to 55 I will breach the LTA, even with the increases, and assuming I stop putting any more in when I hit 50. A nice place to be, but it won’t stop me contributing now, I will worry about the LTA as and when it is likely to affect me.

ISA 2 (also IFA managed)

So the second ISA is the most complicated with 3 sub portfolio’s with different goals inside it. For simplicity here I am tracking only the overall performance, remembering that it also pays out income monthly. The contributions still form a significant amount of the total value of the portfolios as it goes in each month, so I continue to expect this to under perform based on my method for tracking for some years.

Performance: -3.1%

Ok so a poor performance there really. However, it also threw out almost 2% trailing dividend. The main thing for me here is that it is achieving what I wanted out of it – this is not a growth portfolio but a cash flow portfolio.

It is now starting to throw out a noticeable amount of money each month which helps given the ongoing battles I have with HMRC and their inability to work out how much tax I should pay.

Go T’ Pub ISA

So, how did the GTP ISA do, compared to VWRL’s 1.2%?

Performance: -1.0%

Well this was the first year of running so wildly affected by the in month swings, and also of course the impact of CTY, so a comparison against VWRL direct is a little unfair yet.

The funny thing is, do I really care? The short answer is no! CTY is sitting there as my cash reserve – as long as it grows faster than my actual cash, and after a couple of years never goes below the original value of cash I will be happy.

VWRL will just keep ticking up and throwing out money for me to go to the pub (or out for a meal etc.) and I won’t really change what goes in (I would like to increase it at some point as the ideal world would let me fill it completely) so I will carry on firing and forgetting. Very nice 🙂

My actively managed ISA

So last, and by no means least, how did my actively managed ISA do? I have been trying to move this to have less individual shares, and a combination of Investment Trusts and Trackers. This is still very much work in progress and will reduce the potential performance (or stop it from being so bad maybe?), but as the value of the portfolio has increased over the years I am getting less comfortable with quite such a large portfolio – I know I should have faith in my own ability but when you can read so much out there that shows passive is most likely to win, who am I to argue.

After the last rebalance I am almost there so I can play again, more trackers to be purchased.

Performance: 4.9%

The dividend income was reinvested in the portfolio which helps to bolster the returns. The trailing yield was a shade under 4% as it was last year, which indicates to me that I should probably think about a maximum of 3.5% withdrawal rate.

So whilst this didnt repeat last years stellar returns, it continues to move upwards, and at a faster rate than my spreadsheet plans for (4%) which is nice. Whilst I would like this to go up faster (not necessarily the 44%, but maybe 10%), it is still going up.

The dividend income this year was not as much as I would have liked, but still more than last year, even with the rebalancing. The gap between contributions and value continues to grow (in the right way!) as dividends get reinvested so I continue to be happy with this.

Premium Bonds

So for a bit of fun I thought I would also look at the returns on my premium bonds holding. In total it returned 0% – no winnings at all for the year yet again.

Not good, but then these do form part of my cash reserves so preservation of capital is important.

Conclusion

If I look at where I finished the year, I really can’t believe quite how well the values have gone up over one tax year. When I set my (undisclosed) target of what I wanted the fund to get to, I never once thought I would get there.

And I didn’t get there, however I wasn’t that far off which amazes me. If I continue to build wealth at this rate I will hit my number by 2025, regardless of what my spreadsheet tells me!

 

Mar ’18 Performance

So the month has ended and a bit more volatility than we have seen for a while (or is it just that it’s gone down for once?). So how have the investments fared this month? As I covered in my “How I measure performance” – basically I take the value of the portfolio at the end of last month, add on any contributions for the month, and that was my starting value. End value is the value at the end of the reporting period. Simples 🙂

So, what did March do for me? I was feeling very positive until the drops started kicking in at the back end of the month, but that said it means my GTP ISA will buy more!

‘folio Perf. Notes
Company Pension -1.55% No income generated as all funds are in growth or reinvested
Personal Pension -3.94% No income generated as all funds are in growth or reinvested
ISA 1 -2.55% No income generated as all funds are in growth or reinvested
ISA 2 -2.97% The performance does not include the income that was paid out into my account
ISA 3 0.01% Although dividends are paid out, they remain in the ISA wrapper, and will get reinvested for growth. The performance figure includes both the Capital growth, and also income received which will get reinvested.
ISA 4 -2.74% Go T’ Pub ISA
FTSE-100 -2.42% This excludes any dividends
FTSE-250 -1.15% This excludes any dividends
FTSE-All -2.20% This excludes any dividends
S&P500 -3.50% This excludes any dividends
Dow Jones -4.54% This excludes any dividends
VWRL -4.91%
VHYL -4.94%
GBP/USD 2.07% This was taken on the spot rate on the close of the last day of the month. Going forwards I will pick up the exchange rate from www.xe.com for consistency and real life 🙂

So a lot of negative numbers there for the second month in a row. This puts me back to pretty much the same value I had back in November. Whilst a little depressing, I am still in wealth building mode so it just means I can buy more while they are cheap – something I have been waiting for since the bull market started so very long ago!

The one shining surprise in all this was my self managed ISA. Whilst 0.01% increase isn’t anything to shout about, the fact that it remained positive despite the large drops everywhere else. This was despite a shortfall in the dividends this month from the same time last year – attributable to the fact that I sold some of my stock that paid out, and the change in the GBP/USD exchange rate meant dividends were smaller.

Last summers rebalance of ISA 3 is now working its way through the numbers so I think I have mostly taken the hit on lower dividends, but the lower volatility is also helping.

Oh well, as I am currently not reliant on them I can continue to reinvest.

Although ISA2 looks very bad, it is continuing to pay out a steadily growing income stream

So, what does this look like in pretty pictures?

201803PerfGraph

So almost a year on and £10,000 invested wouldn’t have shown that much growth when you keep hearing about the historic returns. Just do remember that these figures banded about are average over years.

My forecasts still show that I will not hit the number I need by June 2025 however that is based on 4% growth and no increase in savings, something which I have changed. Increasing the payments into my other half’s ISA and hopefully also my GTP ISA that will soon make up the shortfall.

And what of my other non financial performance? Well I am pleased to say that the stone of weight that I lost has so far stayed off and seems to have balanced, however I haven’t yet managed to shake any further but I am hoping that I will get below the magic 14 stone soon…

How was your March? Were you caught in the falling market or did you buy more?

 

Mar ’18 Income and Expenses

So March is over, and what a March. Snow, rain sun – everything! So how did this affect the spending and income? Do you really care or are you just enjoying gawking at what is spent? 🙂

Income

So the standard pay cheque went in – still deducting my companies share scheme which is painful but it is a long term bet so I won’t complain too loudly! I still seem to be draining my cash reserves whilst making sure that I keep the same amount going into ISAs. Another few months and the share scheme payments will cease going out and my pay should bounce back up.

To this day I still have no idea how much pay I will have in my pay cheque in April. The plus side is I got (yet another) Tax Code in the post. This is once again a different one to any I have had before so maybe I should take a bet on how long before my next Tax Code arrives….

The income from my other half’s ISA is also continuing to go up so further extra cash. It’s been a long wait to see it get to this level but it is starting become very valuable.

Expenses

So – what do the finances look like?

Item Notes Amount
Things I choose not to avoid* Mortgage, Insurance, shared bills etc. – yes, we could move somewhere cheaper, not have insurance, reduce our bills a bit and so on, but we are where we are. 37%
Groceries All the food and other stuff needed for home 2%
Alcohol for home Home alcohol consumption only 3%
Bicycles / Car related Any costs related to either the bikes or the car 2%
Alcohol Out Generally, its the pub…. 2%
Eating Out I include purchased lunches in this as well as meals out etc. 1%
Other My catch all for anything I may have missed…. 1%
Holidays Any spending related to holidays, flights etc. 5%
Savings Anything left over! This includes money into ISAs, mortgage payments and non relief pension contributions. My company pension comes out before it hits my bank account so isn’t included, nor do I include the “top up” of money when my money goes into my personal pension (i.e. I put in £100, I register it as £100, not the £125 that gets credited in my pension) 47%

So a little extra on holidays – a friend is getting married so booked some of the bits we will need for that, but something to look forward to.

Overall things I do nothing about is dropping slightly which is good too. Not at all a bad month – my highest ever savings rate. 47%! I really am amazingly pleased with that rate – so close to 50% I want to keep pushing. My 12 month rolling average savings rate is also creeping up to 40% so I am starting to believe I may yet make this happen!

I also did some money moving around – more into my other half’s ISA, and some extra into the Go T’ Pub ISA to make the most of the allowances that I can. This continues to hammer my cash reserves – I really do need to build these up as they are lower than I am comfortable with, especially as I am pushing up the money going into ISAs I no longer have the flex I used to.

Did you manage to keep control of your budget in March?

Update: As Quitting Teaching asked how my bills are so low – I do have a small confession. I am currently using up loads of John Lewis vouchers at Waitrose that I have been stockpiling for a while. I have done 2 huge shops for food this year of which I haven’t had to pay a penny for and so don’t show up…