Irish Financial Independence & Personal Finance Podcast

January 2022 Portfolio Update

Wednesday 2nd February 2022

Are You Brave Enough to Buy The Dip?

From an investing point of view, January started off in the red. While it looks like 2022 might be a rocky road ahead, most of us should relish the opportunity to buy at a discount.

I decided to be brave, and purchase some additional shares in the Vanguard S&P 500 fund that is available through Davy via my pension. I bought €2,500 worth when the S&P 500 was down around 7% off its highs. I have another €2,500 in cash that I have to play with, so I will look to average that into the market over the next month or two.

It should be noted, I have three pensions, and have an automatic payment set up on two of them to make regular monthly contributions. I use my pension with Davy to do more manual purchasing and use it to “buy the dip” when opportunities present themselves. The reason I have three pensions is because I want to ensure that I have diversified the risk in the event of a broker going bust and in the unlikely chance that I lose my pension through broker fraud.

From talking to friends, there is genuine fear that “this market crash might be different”. To be clear, a 10% correction in equities isn’t a crash, and secondly, unless one is already retired, no one should fear any dip in the markets. This is all completely normal market behaviour, this time won’t be any different from any times previously and we will look back on this saying “man, I wish I had bought more when it was cheap”. Most of us spend 11 months of the year complaining that share prices are too high, and then live in panic when there is a correction along the way and don’t act.

Buying Another Investment Property

My wife and I have been looking to purchase another investment property. We are looking to purchase in the Limerick region. Over the last few weeks, we have looked at around 10 properties and have made offers on 3. So far, we have found ourselves in bidding wars and I have been reluctant to engage in the endless practice of trying to outbid someone else.

I have nearly got to the stage of wanting to give up a couple of times, but have been adjusting my requirements as much as I can to try to find a strategy that allows us to find the right property. I will keep providing updates as we progress. It is a tough time to be buying, and part of me questions if it is the right decision, but for now, we will keep looking.

Expect to see more cash being added to my portfolio over the next month or two as we look to cement our deposit. We are in the process of moving funds around to ensure we have enough needed to purchase a property. I will need to dip into my emergency fund as part of the deposit, but I will look to build it back up again after we purchase.

Making Hay While the Sun is Shining

I am extremely grateful for the opportunities that I have been able to take as a software developer. It is amazing to think that a hobby I started as a bit of a nerd when I was 16 and just coding around with HTML has led me 22 years later to a career that is booming. I know in the past, I have often complained about being a professional software developer, however I have since released that it is my greatest strength when it comes to trying to become financially independent. My income potential has never been better, and I have managed to take some amazing opportunities recently, working for big name companies that I would have only dreamed about working for a year or two ago. From a FIRE point of view, while I am super busy, my income is considerably higher than it was a year ago, and this really will start to reflect with my monthly contributions moving forward.

Ironically, the secret to my success has largely been thanks for COVID. Remote contracts hardly existed back in 2019, and now they are fast becoming the norm in a post-COVID world. This has allowed me to work for some great companies that pay well and on my terms as a contractor. As a contractor I am technically self employed, invoice directly through my own company and can redistribute any income from my company to either my Director’s Pension, or keep capital within my company to purchase property. For those who have considered software development as a career choice, or have children that have expressed an interest, I would highly recommend it as a great occupation!

I know I have the option to slow down at any point, and I am more than content to adopt ‘Slow FI’ at some point (as I mentioned last month), but for now, I will keep pushing on while the sun is shining (so to speak).

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