June 2023 Portfolio Update
Tuesday 4th July 2023
Freedom in Work
Life is good! It took me a few weeks to find my feet on my new work routine, but I have found a great place and am happy at work. As much as I am keen to adopt full semi-retirement at some point, I am in a great place and am content.
What would I change in semi-retirement? I figure at some point I could give up my 9-5 job and simply freelance 2-3 hours per day to cover our families expenses. At the moment, things are so good with work, and the work flexibility that I have is ideal for my lifestyle, that I feel no reason to need to downshift just yet. It just goes to show that so much of this FIRE stuff isn’t about saving and investing, but actually about simply finding work that you enjoy and that you can work on your own terms. I have been exceptionally lucky to find the current work role that I landed recently and as it stands at the moment, it isn’t an opportunity I would want to give up anytime soon.
Interest Rates - The Spanner in the Works?
As bad as inflation has been recently, I have started to worry a little about interest rates. I can handle 7% interest rates on our buy to let properties, but I am concerned about the interest rate on our own personal property. We do thankfully have a low mortgage which is currently fixed at 2.4%, giving us a monthly repayment of around €630 per month. But what will happen to that monthly payment if we need to settle on an interest rate of 5-6% by the time our fixed rate ends in two and a half years? It concerns me and is definitely a bit of a spanner in the works when it comes to planning our monthly budget. Inflation we can budget in for and tackle in its own way - I don’t yet have a plan for higher interest rates on our primary property.
Investment Property Number 4
We have been looking for another investment property, but it's a tough buying market at the moment. We have been bidding on a couple of properties over the last few weeks, but we have been outbid so far everytime. If anything, we need to wait for interest rates to go a bit higher, to hopefully flatten things out a bit before looking again - though we will keep trying!
Car Update
Back in April 2022, we upgraded our car and I listed reasons on how this upgrade was actually going to save money in the long term. I thought I would give a quick update on this. Our new car is super economic, I get great mileage out of it - nearly half the cost of our old vehicle. As much as this has been a great money saver, I have never seen my mechanic so much as I have in the last 12 months! It is like every month has been something new going wrong with the car. I replaced a fuel injector this week, which isn’t cheap to replace! Hopefully we get a bit of a stretch now without needing to see the mechanic. It was definitely the one cost that we didn’t fully factor into the equation back in March when we purchased. As expensive as the mileage was on our old Toyota, it was extremely reliable. When buying a second hand car, you never really know how reliable it will be until you have been driving it for a few months. In this case, we either bought a lemon, or we have been extremely unlucky. Either way, as my mechanic says “Mike, there is only so much more you will need to replace until it will come right.” Hopefully replacing this fuel injector will give us a bit of a reliable spell!
€500k by 40 Challenge Update
I mentioned back in May 2022 about an idea to try to push towards growing our portfolio to €500k by the time I was 40 (April 2024). At the time, I expected to need to save around €10k per month to do this. I had all but given up on this challenge given I had reduced our savings rate recently due to cutting back at work, however given our recent portfolio performance, even saving €5k per month between now and April 2024, I am odd’s on to hit the €500k mark assuming a 5% annual return from this point! Either way, I should be pretty close!
Solar Panel Update
June was another great month for solar, with our panels covering 80% of our usage. We also gave back 200 KWh to the grid!
We consumed 233 KWh of electricity during June, buying 46 KWh's. Our solar panels covered 80% of our electricity usage, saving us €69.19 before depreciation (based on 37c per kWh). We received a credit back of €42.00 from supplying 200 KWh's to the grid. Our total savings accounting for depreciation was €88.09, giving an annual return after depreciation of 11.16%.
Here is a breakdown of our solar panel usage since they were installed in July 2022:
| Solar Panel Return - August 2022 to June 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% |
| May 2023 | 79% | €52.01 | €42.21 | 11.91% |
| June 2023 | 80% | €46.09 | €42.00 | 11.16% |
| Monthly Average | 53.1% | €25.84 | €14.45 | 5.06% |
Next month will be my final month for reporting my solar figures, as I will have rounded out the year!
June 2023 Portfolio Report
June has been a bit of a mad month for us! Firstly, our tenants moved out of our second investment property, so we had to find a new tenant. I put the property on the open market and had over 80 enquiries in less than 24 hours. I had to pull the property off the site we were advertising on as I simply couldn’t handle the emails. In the end, we found a nice family to rent the house to - though the process was far harder than I ever expected.
We also did some upgrades to the house at the same time, including new carpets, new oven, new washing machine and a host of other things. It has been great to see this property go from a neglected property when I purchased it, to a very nice house now!
I also revalued our investment properties which I typically do every six months. I hadn’t revalued our second and third investment properties since we purchased them, however given the work I had put into each, and the fact that prices in Limerick had gone up considerably over the last 12 months, I did see a significant increase in each. My valuations are definitely conservative, though I do take into account legal & auctioneer fees if I did need to sell today.
The new valuations of our three properties are as follows. Note I have rounded to make reading the information easier:
| Property | Property Value | Approx Mortgage Value | Equity in Property |
|---|---|---|---|
| Property 1 | €260,000 | €143,500 | €116,500 |
| Property 2 | €180,000 | €107,000 | €73,000 |
| Property 3 | €190,000 | €90,000 | €100,000 |
| Total | €630,000 | €340,500 | €289,500 |
Our stock portfolio was up again in June, so overall it was a very good month for us!
| Portfolio Summary (as at 30th June 2023) | |
|---|---|
| Opening Balance | €408,981.71 |
| New Contributions | €5,000.00 |
| Portfolio Growth | €28,871.95 |
| Closing Balance | €442,853.66 |
Monthly Portfolio Growth Report
| Monthly Portfolio Growth Report | |
|---|---|
| Capital Gain + Dividend Income from Equities | €4,545.34 |
| Real Estate Income & Capital Gain | €24,326.61 |
| Total Growth | €28,871.95 |
| % Return | 6.97% |
Portfolio Breakdown
The table below shows the breakdown of my portfolio into the various asset classes:
| Portfolio Asset Breakdown (as at 30th June 2023) | ||
|---|---|---|
| Equities (Stocks) | €143,715.78 | 32.45% |
| Real Estate | €293,190.00 | 66.20% |
| Cash | €5,947.88 | 1.34% |
| Total | €442,853.66 | 100.00% |
2023 Year to Date Returns
Here is a summary of my year to date returns for 2023.
| 2023 Year to Date Growth Report | |
|---|---|
| Opening Balance | €342,734.85 |
| New Contributions | €55,000.00 |
| Equities Capital Gains + Dividends | €16,657.94 |
| Real Estate Capital Gains + Rental Income | €28,460.87 |
| Closing Balance | €442,853.66 |
| Portfolio Return | €45,118.81 |
| % Return | 11.34% |
Lifetime Portfolio Returns
Here are my returns since I started in 2018.
| 2018-2023 Growth Report | |
|---|---|
| Opening Balance | €0 |
| Contributions (Money Added) | €311,445.78 |
| Equity Release* | €41,220.21 |
| Real Estate Capital Gains + Rental Income | €74,900.27 |
| Equities Capital Gains + Dividends | €19,152.13 |
| Other** | -€3,864.73 |
| Closing Balance | €442,853.66 |
| Portfolio Return | €90,187.67 |
* 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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