At it again... one month later :)

Well, look how long that PF ban lasted... just over a month. 

Part of it is that I just got a large infusion of $27,000 post tax (ok it's not that big, other people earn this in a normal month) and I am trying to figure out if this changes anything. Short answer, given the falling markets right now, it doesn't. 

I think around the time I hit 1m NW, I will change the way I do my accounting. 

As I started to spell out in my last post, I need to start thinking of things not just in terms of overall net worth, but in four chunks: 

1) Whether I have a primary residence paid off 

2) Whether I have enough retirement funds (separate from emergency funds) 

3) Enough emergency funds 

4) Continued savings for 2 children 

Whether I have a primary residence paid off 

This goal is going to take a long time, given I don't have a primary residence at all and have just most of a downpayment saved up. I estimate between 10-20 years. I do still believe that it is important to purchase a primary property, to help with wealth accumulation and financial security. 

This goal will probably require around $1 million in capital overall for my share (given a split with my husband). I have about $100k towards a downpayment. 

Whether I have enough retirement funds 

Given annual expenses around $40k in current terms, I will need $1.3 million at a conservative 3% withdrawal rate. I have about 500k towards this now if we count the rental apartment and pension. I should still try and put additional money into paying off the property when possible. 

Emergency funds 

Will need to cover a year's worth of living expenses, so around $40k. I currently don't have this separated from my regular accounts but have around 30k that I could immediately liquidate for living expenses. However my job is at least guaranteed till January 2024, so this is not the most essential part. 

Savings for two children

Should cover their university education expenses. If I keep working at my current job this will likely not go over $80k each (so $160k for both). I currently have $20k set aside for Kid 1 and she still has about 10 years to go, so about $6k per year into her account. 

In total, it means I should have $2.5 million minimum as net worth. It does look like I will only get there around age 55 or so barring any increase in fortune or otherwise. I will have shaved 10 years off my working life this way. 

I still have my BHAG of $20 million - but no plan to get there yet!!

ALSO - the huge point that my own finances cannot realistically be separated from that of my husband. We are a family unit now. 

Enough PF stuff for 2022!

Here's the annual "don't think about PF anymore" post. 

I am a LONG way from a (comfortable) retirement. I'm not socking away the around 200k per year I think I would need to get there. At my current savings rate, about half of that, I should be able to retire a "standard" early retirement of 57 or so but anything earlier than that is probably not going to work. So I need to stop fantasizing about leaving work in the next year or two because it's not going to happen. 

My house needs to be paid off to retire, and I must have enough money to cover substantial expenses during retirement. 

The better and more productive way would be: 

1. To figure out how to do a better job at work 

2. To figure out how to be more frugal 

3. To keep a regular exercise routine and keep flossing and brushing your teeth 

4. To figure out how to be a better parent... not to figure out ways to stop working 

And stop focusing on the numbers. 

check in: net worth $882K ($650K)

Hi, it's me again, doing a check in 5 months since the last one. 

Over time, I do see pretty substantial income and net worth growth - I've earned over 67k since the last update. I just don't see it over the day to day period so it feels a bit stagnant right now. 

The biggest drag on net worth growth has of course been the stock market, which has been on its downward trend since January (although with a nice uptick in the last few months, thank goodness I could not access Interactive Brokers during the very low period to see all the losses! It's very healthy not to access your investment accounts). I have learned my lesson about focusing too much on individual stocks, and will now return to the usual boring but stable program of Vanguard all world and all USA ETFs. 

The second biggest drag has been expenses, such as paying annual taxes, fees associated with the move, and apartment furnishings (something which can make its own separate post). 

I have refinanced my mortgage on my place and the interest rate is quite high (5.29%); however I wanted to lock in a rate now rather than see it continue to go up. So it will add another $500/month to my expenses which will come out to $30000 over 5 years going straight to the bank. But that can't be helped, and my apartment value (likely $50-100k) and equity (+$48000) will continue to grow over that time so it will offset the increased costs. The rent on our current place is so low ($1570/month) that it helps a lot with financial decisions. 

I also have big news that I am expecting child #2 early next year. I have fairly stable income of $10000/month post tax coming in over the next 10 months at least. This is great because it means I can grow net worth to hopefully close to $1M ($740k-750k) by this time next year, IF I can keep our lifestyle modest, and keep spending under control and not buy every high end thing on the market for baby. I don't think it's healthy to speculate beyond that but I have a big incentive to go back to the job soon - if I manage to return to the office and stay on the job another year I can see some fairly significant gains (around $100k) due to pension vesting, and therefore with some luck should reach $1.2M ($950k) around this time in 2 years. Of course, I have no idea what will happen at work with all the politics and senior management changes, but so far I enjoy my job and can see myself doing it for a few years more, and at least have a guarantee till the end of my maternity leave in a year. Then, I know people generally rather keep personnel on than let them go, so it should at least be ok for me to keep with the job for a bit longer. 

So, smooth sailing for now. 

check in: net worth $837K ($620K)

 I had to devalue the estimated price of my house. That, plus, stock market slumps, puts me at a net worth right now similar to what I was at 7 months ago. It is frustrating not to see progress but I think it's an honest account, plus it makes me think that I should not be going around obsessing over these numbers so much. 

Anyways this does not detail my plans.  

in general I think it's pretty insane what we have been able to make and save by being in this African country for the last two years. Income wise it's been crazy - making 280 chf take home combined in one year. I didn't expect that it would be so lucrative. Of course the inheritance helped. 

I'm going to reach 1m CAD in a year and a half (age 37 instead of 36). It's funny because I feel like reaching this milestone now does not impact my life in any way. Watching the numbers does not do anything for me now, except waste my time. 

Doing net worth calculations does not make me any happier because the pace of change is so glacial. 

Three years ago at this time I had less than $500k CAD. Now that I have $300k more, I feel absolutely nothing from the increase. I feel the same way that I did back when I had $500k CAD, or when I had $100k CAD. 

If you gave me $300k now, I'd be through the moon happy. I'd feel so rich. But if you fast forwarded another 6 months or so, I'd feel exactly the same way that I do now. The happiness would normalize. 

I'm chasing the happiness that comes from gaining money, or the relief from anxiety that comes from gaining money. But these feelings are temporary and don't solve any of your problems for the long term. So I don't think they are as useful as I think. 

It is very likely I will gain another $300k CAD in another 3 years, or more, which will put me squarely in the bona fide millionaire set. But I will feel the same as I do today. It will not increase my security, nor make me a better employee, nor increase my capacity to contribute to the world, nor make me a better partner nor parent. It will simply be. 

I think, "oh, but I would be happier if I got a $200k per year increase, not a $100k per year increase! Wow, wouldn't that be something. Then I would be happy." 

But when you think about it that's not true either. The happiness comes in the brief moment when you imagine this possibility and feel the hope of the change. When you actually experience it you will be in exactly the same level of happiness as you are now (with possibly a very very negligible or slight increase in your rated well being, but likely something you would not notice). 

Enough PF stuff for 2021

This is enough action, I'm going to stop looking at personal finance things and excel spreadsheets until 2022 and focus on my life. Everything is set now and any more planning will just be taking time away from actual productive activity or sleep. 

Check-in: net worth $834k ($609k), gain of $60k

An update to my accounting method, as half my assets are in one country and the other half in the other. It's too much work to report on this every month so I'm going to go back to quarterly, I think, since I ended up making a new sweet Excel sheet to track my net worth. 

This time I managed to look at my investment accounts and sweet Jesus everything is going well right now. It might look like I have sudden jumps this month but it's mostly because I've just done some accounting and am actually accounting for investment returns for the last 8 months. What a time to be alive. 

I plowed $145k into my retirement accounts this last month, 5k still sits in cash (don't know why - if I leave it I'm leaving gains on the table). I've informally decided that $20k of this belongs to E, given we don't have tax sheltered accounts where I could save for kids's education. I don't have a house yet but there is no way we can buy this in the next year anyways given our location, so I would rather not have cash sitting around and will use future earnings for a downpayment instead. 

I have also: 

1) Divested from my bonds and buy stocks instead. 100% stock portfolio for growth. I have cash reserves to last me 1 year, and "survivability" income technically forever or until I become paraplegic so the chances are pretty good that I don't need to cash out until I really decide to retire in 30+ years. 

2) Organized more clinical work on my plate for next month. Keep the license alive and get more income. 

3) Moved money back to Canada to take care of my expenses, using Transferwise. 

Given other planned expenses, I will not be able to take half of the year's working days off and will instead have to work 20 more days if I want to meet my savings goals (not total portfolio growth goals) of $100k CHF this year. First world problems. I hope my supervisor is ok with this. I'll bring it up sometime later in the summer. 

I will be able to reach $1m CAD, personally, at age 36, so I am on track at least to meet my first financial goal. The next goal, $1m CHF personally, sounds reachable by age 40. 

But again, this is still my bare minimum and I feel in the current climate that I can do better. Yay for perfectionist tendencies. So let's see how much I can hustle this year to improve this. 

Check-in: Net worth $774k (595k)

 Current net worth: $595,000 CHF or $774,000 CAD  

The increase from 582 to 595 ($13k in one month, or $17k CAD) comes entirely from income. I don't know if there were other investment gains and I don't check. 

Upcoming expenses till 1 July 2021: 

I pay my partner for my half of expenses, which is around $2600 

Taxes: $8000 (Property tax and general income tax)  

Total: $10600

Upcoming income (till 1 July 2021): 

Job 1: $34000 $18500 from the month's work, plus $15700 pending from TWO YEARS AGO. Don't ask. 

Job 2: $0 Still doing this other gig. Making some money but I'm just breaking even (or less). I don't think I want to ramp up work here because it will just cut into my other income.  

Job 3: $1500 Still pending from side work. 

Total: $35500  

Total increase in NW = $24,900 CHF or $33,767 CAD

Expected net worth July 1, 2021: $619,900 CHF or $840,838 CAD 

1-month forecast 

Income - ~$4000. I will probably only work a week next month. 

Expenses - ~$4000 (+1400). With increased expenses from travel I will just break even for next month. 

12-month forecast 

Income - around $110k: I've signed a contract for working half the days of the year, for just over $100k. Another $7k or so will come from the capital gain on paying down my mortgage. (I don't count potential capital gains from stock right now). This is good enough for me for now, as all the income is tax-free. I could work more to earn another $16k or so but I'm not sure if it's worth it - this way I can either work 4 days a week and take 3 months off, or I can work 5 days a week and take 6 months off. I'll also try to work more doing Job 2, where I need to fulfill some hours. But it is flexible, so if I want to work more later I can. 

Expenses - probably around $30,000: Expenses for next year might be slightly higher than prior because I do want to spend more time travelling with E. 

Total gain: around $80k (or 108k CAD). This will meet my minimum goals of annual gain of $100k CAD. If I work more and get an increase of $96k ($130k CAD) I can even push this more - and be close to $1m CAD ($960k)! Let's see how this goes. 

Again my long-term financial goals are to get to $1m CAD, or $1m CHF (stretch goal) by the time I am 40; and then up to $8m net worth by the time I retire with at least $2-3m in retirement savings. The best (and fastest) way to get there is to keep working hard - do as much as possible in my job, keep staying positive and bringing positive energy to work, which will help me to get a stable contract with all those sweet benefits, or get a better job in another organization. 

I'm really looking forward to being able to invest better while we're in Switzerland and Canada. By next month I will have over $100k that I want to put away in a "shopping spree" so looking forward to doing that.  

The strategy has not changed for increasing my wealth: 
1. Better investing - still haven't found a good way to keep doing this while abroad. 
2. Find a full-time job in public health - UN agency, consultancy, or university
3. (back-up) learn German, then work as a doctor