Irish Financial Independence & Personal Finance Podcast

April 2023 Portfolio Update

Wednesday 3rd May 2023

The Longest Week in History

Written last Thursday before finally finishing a five month project.

Have you ever noticed that some weeks seem to drag on longer than others? As I type this on a Thursday, it feels like Monday was ages ago! This week has been particularly challenging for me as I haven't been sleeping well. In fact, I woke up at 5am on Tuesday and lay in bed for an hour before forcing myself to get up and start work early.

What's different about this week compared to others? Well, it's my last week of working overtime. For the past 18 months, I've been pushing myself to take on as much work as possible to maximize my earning potential and get closer to achieving FIRE.

But at what cost? The first few months of working overtime were manageable, and the next six months were tolerable, but the last few months have been a real grind. Initially, the projects I worked on were fun, but as I progressed, I stopped caring about the type of work I was taking on and focused solely on the paycheck. As a result, I found myself working on extremely complex projects, with large teams and plenty of meetings.

Somewhere along the way, I lost sight of my short-term happiness and became fixated on the long-term endgame. It's a common mistake, but it can be hard to see it when the money offered is too good to pass up. Don't get me wrong, the money has been amazing. I've been making in a day what most people make in a week. However, the work-life balance has been completely out of whack.

Tomorrow will be my last day of working overtime. I'm finishing a major project that has kept me busy for the past five months, and I'm looking forward to transitioning to a more conventional, relaxed, and sustainable work environment. Time will tell if it was all worth it. I know I need some time to reflect, destress, and find myself again. It has been stressful, and I've had a hard time finding balance.

The best part is that I now know my limits - I know that I can save €10k a month if I need to, but at a much greater cost to my health and overall happiness. I plan to work sustainably, save €5k a month, and casually hit FIRE over the next four years or so, working on projects I enjoy. I am also considering simply paying off two of our mortgages and adopting semi-retirement - withdrawing a little and working no more than 10 hours per week. Either way, if the market takes a turn, I know that I could return to saving more, but definitely not for as long as I have over the last 18 months!

The Importance of Finding a Job You Love!

One thing the last 18 months has taught me is that working more and not enjoying your work isn't the right solution to achieving FIRE. One is likely to burn out by working harder and longer in a job they don't enjoy.

However, one positive outcome of the last 18 months is that I found a project I love. It has a great team, and 80% of what I do work wise, I enjoy. This has made an immense difference to my overall happiness and feelings about work.

Even though this project isn't the highest paying role I've had, it goes to show the power of finding balance in our journey towards FI. It also highlights that my approach of solely focusing on increasing my income over the last 5 years may have been partly wrong. While increasing your income is essential, doing it in a way that aligns with your passions and interests will make the need to rush towards FIRE disappear, and you can enjoy the journey a lot more.

Stopping Pension Contributions & Paying Down Our Mortgages

In April, we made some significant investment decisions. We decided to halt our regular monthly contributions into my pension and instead concentrate on paying down the mortgages on our investment properties. If we're going to pay off the mortgages, it makes the most sense to go all-in and move our new contributions to pay them off. Every extra repayment guarantees a 6.75% return, which is how high the interest rates are on our buy-to-let mortgages.

Last month, I mentioned four potential options for us to withdraw in early retirement without having to sell our investment properties. It appears likely that we'll adopt 'Plan One' or 'Plan Two.' First, we'll pay off the mortgage on our third investment property, which will take approximately 18 months with an additional €5k payment each month.

After that, we'll focus on paying down investment property two before deciding between 'Plan One' or 'Plan Two', or we may even decide to simply semi-retire after paying down two of our three mortgages.

Solar Panel Update

Our panels really kicked into action in April, in fact accounting for the electricity that we sold back to the grid, we nearly produced more electricity than we consumed. Keep in mind that we only get 21c per kWh that we sell to the grid, whereas our electricity costs 37c per kWh, so while this isn’t cost neutral, at least from an environmental view point, it is nice to think we are helping to ensure our electricity usage is carbon neutral.

I would also like to mention, we haven’t paid an electricity bill now since September 2022 and it is likely we won’t for another couple of months. The government electricity grants that all households received in Ireland for the winter we still haven’t fully used - in fact, we are still €257 in credit! This has been a real bonus, and has helped us keep our energy costs low during a tough winter. We still had to pay for gas for heating, which was up considerably, but it again shows the power of investing in keeping monthly costs down.

We consumed 262 KWh of electricity during April, buying 66 KWh's. Our solar panels covered 75% of our electricity usage, saving us €72.52 before depreciation (based on 37c per kWh). We received a credit back of €13.44 from supplying 64 KWh's to the grid. Our total savings accounting for depreciation was €62.86, giving an annual return after depreciation of 7.93%.

Here is a breakdown of our solar panel usage since they were installed in July 2022:

Solar Panel Return - August 2022 to April 2023
Month Percentage Covered by Solar Electricity Saving (after depreciation) Credit from Supplying the Grid Annual Return
August 2022 83% €29.42 €34.86 7.95%
September 2022 62% €28.90 €7.98 4.57%
October 2022 45% €22.98 €4.20 3.38%
November 2022 31% €12.05 €2.10 1.76%
December 2022 24% €1.69 €1.89 0.45%
January 2023 20% €0.95 €1.47 0.30%
February 2023 38% €14.64 €2.52 2.15%
March 2023 47% €26.11 €6.30 4.08%
April 2023 75% €49.42 €13.44 7.93%
Monthly Average 47.2% €20.68 €8.31 3.62%

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