Irish Financial Independence & Personal Finance Podcast

Saturday 4th January 2025

2024 - A Year in Review

I mentioned last month that our portfolio should hit €700,000 and it certainly did! While our stock portfolio was down slightly, our investment properties were revalued in December (we do this twice a year), and with our conservative revaluations the portfolio crossed the €700,000 mark.

I will go through the monthly changes more in the December Portfolio Update section below, but I thought it might be nice to break down the dramatic change in our portfolio in 2024. Here is our portfolio broken down in table view, with the month to month changes:

2024 has been by far our best FI year. It has exceeded all expectations and has allowed us to enter into the Semi-Retirement phase, where we are no longer making contributions to our portfolio. We plan on coasting the rest of the way to €750,000 and expect we will hit FI officially sometime in 2025.

Three Week Mini Vacation

Like last year, I took a three week “mini vacation” during December. It was wonderful to switch off from work for such a long period. I was surprised at how easy it was to escape from work and fill my time with more meaningful things.

I am due to return next week to work, however work will be very different for me in 2025. I am due to work 50 days less than in 2024, have reduced the amount of additional freelance work I do each day and renegotiated more flexible hours with my main work project.

What our “Semi-Retirement” phase will look like

Due to our family's relatively low expenses of roughly €40,000 per year, it really isn’t that difficult for us as a family to cover our basic expenses. Amazingly, it involves only earning about 20% of our income from our peak of 2022 - roughly working one day a week versus the five day week that I was doing back then.

As it is, we plan to make our well overdue trip to New Zealand at the end of 2025, so we have needed to adjust our work plan during our “Semi Retired” phase to cover some of that. With 2 adults and 3 children, a trip to New Zealand doesn’t come cheap. I have estimated we will need roughly €18,000 for our 3 week planned trip - the plane tickets alone will cost somewhere between €8,000 - €10,000. Given this cost will be on top of the €40,000 we need to cover our day to day expenses, it means a big chunk of this is going to fall into the 50% higher tax bracket - meaning that we will need to allocate roughly €36,000 gross income to cover our big NZ trip.

As part of our 2025 plan, we also want to pay off a personal loan we took back in 2022 to cover our solar panel investment and upgrading our vehicle at the time. We have a balance of around €10,000 on the loan.

As a result, the income we need in 2025 is much higher than the €40,000 we need to live a year. I instructed my accountant to increase our gross income on my payslip to €7,500 per month, or €90,000 a year to make all of this happen.

This breaks down as roughly €40,000 gross income to cover our living expenses, €36,000 gross income to cover our NZ trip and the balance of €14,000 gross income to make additional payments on our personal loan.

The higher 50% tax rate really can be a killer when planning for additional expenses outside of one’s standing living expenses, but with us coasting now to FIRE, the timing really couldn’t be better for us to do this this year. It is ironic, as when paying ourselves only €40,000 per year versus €90,000 a year, our total income tax is usually only around €4,000. Revenue will be happy with me this year anyway!

All up, the €90,000 of income is still less than half of what I was earning at my peak in 2022 - my work hours have been reduced significantly on last year and we are continuing our transition to full semi-retirement.

By 2026, with our debt paid off and NZ trip behind us, I expect we can go back to our more traditional €40,000 per year income and will at this point look to live mainly off our portfolio income. I expect at this stage, we will look to reduce my work hours even further - how exactly this will look, I am not fully sure yet.

The Cat is out of the Bag!

I was given a massive opportunity in December to write an 800 word article for The Irish Independent specifically on our FIRE journey. The FIRE movement hasn’t always received mainstream coverage in Ireland and I was delighted to be given the opportunity for our story to be shared in my own words on a national newspaper.

The link to the article is here - if you don’t have access to a subscription for The Irish Independent, you can view the full article using this link.

I was surprised how much support I got from friends who read the article and may not have been aware that we were on a FIRE journey.

€700k Breakdown Over Time

When I hit the €600k milestone back in June, I presented a breakdown of how long each €100k had taken me. I thought it would be nice to update this based on the €700k portfolio:

December 2024 Portfolio Update

December was another significant month for our portfolio. Our 2024 company tax bill came in lower than expected, so we were able to make a final portfolio contribution of €10,000. This allowed us to pay off the mortgage we had been paying down on one of our investment properties. Looking back, we paid a whole mortgage off on a property we purchased in February 2023, so it took us less than two years to pay the mortgage off!

We also revalued our properties at the end of December. This process has been getting harder and harder, especially as the Limerick property market is booming right now. It can be hard to know what is a realistic value, and as a result, I tend to value our properties on the more conservative side.

I am also aware that there are auctioneer and solicitor fees if we sell, as well as costs related to maintenance costs to get the property ready for sale, so I look to factor this in as well. After factoring in changes in the market from what I could see from the Whack App over the last six months, reviewing asking prices on Daft and factoring in different media releases on property prices, I added an additional €5,000 to each of the properties valuations over the last 6 months. I have broken down each property below:

I also made a small change to the way I have categorised my investment in An Dúlra at the end of December. An Dúlra is a co-op that I co-founded in 2020 which sells shares to Irish Residents and uses the capital to purchase land to establish new native woodlands. It has been a wonderful project to be part of. One of the interesting things about the co-op is that the share price remains the same, but by being a shareholder, you receive an annual tax free dividend, which is targeted at 4% per year. The shares themselves are redeemable in the future. When reflecting on all of this, I came to the conclusion recently that my investment in An Dúlra is more like a bond or long term deposit than a share purchase, and that the investment is somewhat comparable to a long term deposit in a credit union. As a result, I have reallocated my investment €1,000 in An Dúlra from property to simply being part of my cash savings.

Aside from all of this, our stock portfolio was slightly down in December after a massive gain in November. We had to replace a washing machine on our first investment property during the month, and our second investment property received a council inspection and will require some minor repair work which we need to carry out in early 2025. Whew, it was a busy month!

Here are the overall portfolio numbers:

Monthly Portfolio Growth Report

Portfolio Breakdown

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

2024 Year to Date Returns

Here is a summary of our final portfolio review for 2024:

Lifetime Portfolio Returns

Here are my returns since I started in 2018.

* In 2020, some of the new contributions came in the form of an equity release, as we turned our primary residence into a buy to let and purchased a new home to live.

** In 2018 & 2019 I made several bad investments in peer to peer lending, forex trading and unregulated investments, which resulted in losses overall.

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