Irish Financial Independence & Personal Finance Podcast

February 2021 Portfolio Update

Thursday 4th March 2021

February was a volatile month! We saw some record market prices, with the S&P 500 and Bitcoin both hitting record highs.

We saw a small correction on the last day of February, but overall asset prices are rocketing - which is likely a reaction to the share amount of cash which is being printed by governments at the moment.

Inflation is the next natural symptom of printing money, and there are signs that it is starting to kick in. Noticing prices going up yet? Petrol prices are certainly on their way up, and with the VAT rate going back to 23% in March, no doubt more prices will be on their way up. Unfortunately, inflation is the only real way out of negative interest rates. We will see prices rise, and then interest rates rise as a result because that will be the natural way to stop inflation.

This will likely have a negative impact on the share market but as always, there is no real way of knowing - so for now, just keep cost averaging in!

Over to my own portfolio and passive income report for February.

February saw a record month for my passive income and I technically was FI from my portfolio + passive into in February. While this is obviously great news, I'm not getting the party hats out just yet - as passive income can be quiet volatile, and I think February was a bit of an outlier. As a result, what I have decided to do, is start taking a moving average from my passive income, so that I can get a rough idea of what the income will be over a 12 month average.

It wasn't the best month for my own Forex Trading, but I will take a small loss on the chin and learn from that. On the Peer to Peer lending side, I finally sold out of Crowdestor (using their secondary market), thus the loss there. Our rental property had another solid month - the property is yielding close to 1% per month, which is fantastic. The tenants are very happy with the house and its a win:win all around. In forestry, one of my Xmas tree investments is due to be paid out in the next month or two, so it will be interesting to see how that goes.

Lastly - these numbers have been generated by a web application which I built called Portfolio Tracker. Portfolio Tracker is available for free if you would like to track your own portfolio performance over time.

Lets jump to the numbers:

Portfolio Report

Let's start with the portfolio update. Here is the summary:

Portfolio Summary (as at 28th Feb 2021)
Opening Balance€155,917.87
Cash Introduced€4,000.00
Portfolio Capital Gain + Income€1,170.48
Closing Balance€161,088.35

I use the 4% rule to calculate how much I could withdraw from my portfolio. This rule basically says, that if one were to withdraw 4% of their portfolio per year, that it is very likely that they would out live their portfolio. There are some critic's that dispute this and say the number should be lower, but I am happy to work off the 4% rule at this stage.

Based on the 4% rule, my investment portfolio now produces a monthly income of €536.96 (161,088.35 ÷ 25 ÷ 12).

Portfolio Capital Gain + Income Report

This is a strange report, because I group capital gains and income together. Because we are ultimately withdrawing 4% (either via income or selling assets), it doesn't really matter how the portfolio grows. Therefore, this report records the changes based on asset types within the portfolio for the month:

Monthly Portfolio Capital Gain + Income Report
Capital Gain + Dividend Income from Equities€357.89
Property Income€644.36
Forex Trading Income-€120.86
Peer to Peer Lending Income-€-32.05
Forestry Capital Gain / Income€250.00
Cryptocurrency Capital Gain€71.14
Total Change€1,170.48

Portfolio Breakdown

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

Portfolio Asset Breakdown (as at 28th Feb 2021)
Shares & Equities€49,989.1431.03%
Business Venture Equity (Start Up Investments)€12,759.727.92%
Forex / Currencies€2,347.181.46%
Peer to Peer Lending€1,768.401.10%

Passive Income Report

Passive income has become a vital part of my overall FI plan. I like passive income, as it gives me projects to work on during retirement, and I like to build passive income streams around my hobbies and passions.

My two main passive income projects are:

Wholesale Directory

Wholesale Directory is a website I launched in 2013 and connects retailers with Irish wholesalers. Such a simple idea, but the website has become popular and ranks well on Google. The website brings in passive income through advertising revenue.

Treaty FX (Forex Education)

In 2018 I got caught in three major Forex scams and lost thousands of euro. There was very little information out there to teach people how to avoid scams in the Forex industry - thus Treaty FX was born. Treaty FX provides free education for individuals looking to either become Forex Traders or Forex investors. Individuals can register for free and watch videos on how to set up a copy trading account to copy trades from professional traders. The website brings in passive income through affiliate income by referring people to an FX broker, all while providing free education to those interested to learn about the industry. It's been great for me to pass my experience onto others and hopefully prevent them making the same mistakes that I did. If you are interested in learning more about becoming a Forex trader or investor, click here to learn more.

Total Passive Income for the month (from the two projects): €3,496.98

February was an unbelievable month for passive income and shows how powerful it can be. I suspect February was an outlier, it was a great month for both Wholesale Directory and for Treaty FX. As a result, I am going to take the average passive income from the last 2 months, which works out at €2,169.73.

Overall Income (Portfolio Income + Passive Income)

My total income for the month was €2,706.69 (€536.96 + €2,169.73). My target goal to become FI is €2,000 per month. This means I am 135% on the way to FI! As mentioned above, I suspect this month will be an outlier, but lets see what next month brings. The main takeaway, is that I have proved it is possible to be FI for one month - the challenge is to now make it a regular thing!

Passion Projects

Finally, it isn't all just about money! I also work on projects because I want to make positive changes to the world! Here are some projects I am part of:

The Irish FIRE Podcast

I launched The Irish FIRE Podcast in June 2019. While I did run ads back on the podcast when it first launched, these days I run the podcast as a passion project. The podcast shares my story on my journey towards financial independence.

An Dúlra Co-Op

An Dúlra Co-Op is an Irish initiative hoping to make a positive difference, by establishing Irish native woodlands. Irish residents can become shareholders of the co-op and become part owners of newly established Irish forests. I co-founded the co-op in September 2020. We are still looking for new investors, so definitely check it out!

Portfolio Tracker

Portfolio Tracker is designed for those who are pursuing financial independence and are looking for a software that will add accountability to your FI journey. Portfolio Tracker is a simple, flexible investment software that will allow you to see the growth of your portfolio over time, without being complicated to maintain. Click here to track your own portfolio.

Hockey Clubs

I helped co-found four new hockey clubs in North Munster, introducing over 300 children to the game of hockey. Interested in your children playing hockey? Feel free to bring them along to any of the following hockey clubs - Castletroy Hockey Club, Ennis Hockey Club, Nenagh Hockey Club and Thurles Hockey Club.

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