January 2021 Portfolio Update
Thursday 4th February 2021
From 2021 I will be providing monthly updates on the portfolio and passive income. Lets give a quick overview first as to why I am doing this.
In September 2020 I went back to full time work, after working part time and semi casual hours the two years previously. It was great to be adding around €4,500 a month to my portfolio for a few months and I managed to get my FI projection down to less than 6 years.
Everything seems to be going OK, there was just one problem. I strongly disliked working full time as a freelance web developer! I began to dread Monday's coming around, the weeks were long, and programming all day for clients is exhausting!
The thought of being so unhappy for the next 6 years to reach early retirement suddenly wasn't worth it. So what if it took me longer - this is a journey, and I would rather be happy on this journey, than rush it and "forget to look out the window".
So I made the decision to start reducing my hours again. I still had work projects I had committed too, so it was going to take a while to get back down to part time hours, but at least there was an end in sight. At the same time, a couple of passive income projects that I had worked on while working part time had started to produce some solid monthly income!
My most recent plan had been to work full time until I hit my FI target of €600k. This would give me a portfolio income of €2,000 per month based on the 4% rule. However, my new goal is to achieve FI via two methods - portfolio income and passive income. Together, they are a power force.
Passive income is working on projects that produce income long after the work is done. The income isn't tied directly to my time (I'm not selling time for money), so whether I work on the project on a daily basis doesn't matter so much. Building passive income streams is just another way of building your own assets - it produces income for you over time. I list the passive income projects I have further down in this report.
Portfolio Report
Let's start with the portfolio update. Here is the summary:
| Portfolio Summary (as at 31st Jan 2021) | |
|---|---|
| Opening Balance | €149,513.50 |
| Cash Introduced | €4,534.23 |
| Portfolio Capital Gain + Income | €1,870.14 |
| Closing Balance | €155,917.87 |
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 €519.73 (155,917.87 ÷ 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 | €1,151.21 |
| Property Income | €373.81 |
| Forex Trading Income | €68.04 |
| Peer to Peer Lending Income | -€28.74 |
| Forestry Capital Gain / Income | €250.00 |
| Cryptocurrency Capital Gain | €55.82 |
| Total Change | €1,870.14 |
Portfolio Breakdown
Finally, the table below shows the breakdown of my portfolio into the various asset classes:
| Portfolio Asset Breakdown (as at 31st Jan 2021) | ||
|---|---|---|
| Shares & Equities | €47,294.83 | 30.33% |
| Property | €60,000.64 | 38.48% |
| Forestry | €14,725.00 | 9.44% |
| Business Venture Equity (Start Up Investments) | €12,596.14 | 8.08% |
| Forex / Currencies | €1,268.04 | 0.81% |
| Peer to Peer Lending | €1,864.15 | 1.20% |
| Cryptocurrency | €324.54 | 0.21% |
| Cash | €17,844.53 | 11.44% |
| Total | €155,917.87 | 100.00% |
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 in January (from the two projects): €842.48
Overall Income (Portfolio Income + Passive Income)
My total income during January was €1,362.21 (€519.73 + €842.48). My target goal to become FI is €2,000 per month. This means I am 68.11% on the way to FI!
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 (recently renamed from Native Woodland 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.