Irish Financial Independence & Personal Finance Podcast

April 2021 Portfolio Update

Monday 3rd May 2021

A Content Birthday Boy!

I turned 37 in April. As I blew out my birthday candles, I released I had nothing to wish for - I had everything I needed and was content with my life.

Contentment is an important aspect of the FIRE movement, and one which is often not mentioned. Often when blogging and podcasting, it is easy to focus on the exciting things about trying to become financially independent... in truth, 90% of the FIRE movement is simply good old fashioned hard work - jump out of bed, work hard, save hard and invest well. Rinse and repeat for 8-15 years and you should be somewhere close (assuming you can get your savings rate to over 50%)!

Contentment is important as well, because one is going to need that as a minimum to actually become financially independent. Resisting the urge to upgrade a phone, car or bigger house takes discipline, especially when you see friends and peers with the latest gadgets.

Contentment also extends to other aspects of the FIRE movement. In April, we were able to add €4,500 into our investment portfolio. This was done via a €4,000 pension contribution and €500 added to our emergency fund, which lives in my web development company. While we continue to build wealth in our pension and company, our personal financial situation is challenging at best.

We deliberately pay ourselves at the lower tax rate to avoid paying 50% tax - something which we have identified as a key component of our ability to become financially independent. It should be noted that we do have some income that we pay 50% tax on - such as income from our rental property, however this income isn't tied directly to our time. As we see it, working one hour and giving half of that income to the Revenue Department is simply an unfair deal.

Having three children and recently moving house has put some financial pressure on us over the last few months. We have had to make renovations and repairs in the new house, which has made keeping our budget difficult at best. However, as a family we know that we need to continue pushing ourselves to add to our portfolio and that our personal finances - while in a mess at the moment - will correct themselves with some good old fashioned discipline.

The numbers tell the full story. In the first four months of the year, the portfolio has grown from ~€125,500 to ~€151,000 (up €25,500 in 4 months). Obviously this has been helped by the sharemarket hitting all time highs, but even without that, our ability to continue to add regularly to our portfolio is the reason for majority of the growth.

Our Latest FI Plan

Our plan for the next number of years is to continue to make decent monthly contributions to our portfolio. The hope is to build it up to around €400k - €500k over the next 5 or so years. We have adopted the Coast FI approach - we are looking to save as much as we can now, to then be able to stop working full time. I would ultimately like to go back to working part time / casual hours as a software developer (as I did in 2019), knowing that I have my future secured financially for when I turn 55.

This plan likely sounds easy on paper. Honestly, trying to balance family life, working full time from home and other personal projects is hard work. I wrote last month that I finally was enjoying work again after a number of years of struggling with it - and I still am. However, trying to keep things "low stress" in the IT industry can be a challenge. This month alone, I had several late night phone calls with website issues, some deadline issues with several projects and a lot of headaches and stress. It's tough - trying to please clients, spending enough time with the family, getting in exercise and time for fulfillment - all while trying to maintain a savings rate of over 50% - this FIRE stuff is't for the light hearted!

The good news of course, is that we have a clear plan and a path forward to shift to a "savings optional" phase in the next 5 years or so. The rest is just implementing it!

April 2021 Portfolio Report

Portfolio Summary (as at 30th April 2021)
Opening Balance €144,072.24
New Contributions €4,500.00
Portfolio Capital Gain + Income €2,704.95
Closing Balance €151,277.19

Monthly Portfolio Growth Report

Monthly Portfolio Growth Report
Capital Gain + Dividend Income from Equities €2,103.51
Real Estate Income €690.97
Peer to Peer Lending Income €5.14
Cryptocurrency Capital Gain -€94.67
Total Change €2,704.95

Portfolio Breakdown

The table below shows the breakdown of my portfolio into the various asset classes:

Portfolio Asset Breakdown (as at 30th April 2021)
Equities €75,766.99 50.08%
Real Estate €66,799.09 44.16%
Cryptocurrency €1,814.67 1.20%
Peer to Peer Lending €1,148.28 0.76%
Cash €5,748.16 3.80%
Total €151,277.19 100.00%

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