September 2024 Portfolio Update
Thursday 3rd October 2024
Is €750,000 really enough to retire on?
I hosted an online meet up during September as part of the Limerick FI Meet Up Group. We had an older guest as part of the meet up, who spoke about investing in dividend stocks. I had the pleasure of interviewing him. During the interview, I mentioned that our family was close to being FI, and we were targeting an FI portfolio of around €750,000. He was a bit taken aback “that doesn’t sound like a lot if you are only 40” he said.
This particular guest wasn’t part of the FIRE movement, and I get it - it can be hard to understand from an outsiders point of view how one can declare themselves FI on what I guess general society wouldn’t consider a huge amount of money - it is hardly a 19 million euro lottery jackpot! Furthermore, how can we declare ourselves FI when we still have say another 60 years of living?
It wasn’t until after the interview finished, that I reflected a little further. This particular guest was in his 80’s. His portfolio was around €700,000, so I can completely understand why he is wondering how it is expected that our portfolio will last 60 years. But the biggest thing that the guest didn’t understand, is that time is hugely on our side. We have another 60 odd years of compounding ahead of us. We know that I will still work a little in retirement, and the reality is, in years of bad market returns, we can greatly reduce how much we withdraw by working a little more.
I mentioned this article back in May this year by Go Curry Cracker and I can’t stress how important it has been when defining enough. Mix that with concepts from the book ‘Die with Zero’ and a lot of the great content on the Money Flamingo blog, it quickly becomes clear that the challenge with FIRE isn’t so much about how much to save, but how long to save for. I am rounding up my 7th year of pursuing FIRE - for those who have been following my journey for a while, it is fair to say I have had my ups and downs. What I am most proud of myself, is that we have been consistent - consistently saving and boosting our savings rate over time to create our great FI snowball. And it has been amazing to see - our portfolio has more than doubled in the last two years - showing the full impact that consistency can have.
An Update on our monthly costs
I mentioned last month that I was worried about our monthly costs increasing just as we hit FI. We recently received an increase in our private health insurance. In the end something interesting happened. I called up Laya and went through what we were paying for. It turned out we were paying for some cover that we just didn’t need any more (our family is complete, we no longer needed to worry about maternity cover). In the end, we ended up reducing our monthly amount from last year by about €10 per month. Amazing really, when considering we were looking at paying €30 more a month initially.
I have also noticed that our grocery spending has decreased back to pre COVID levels. A heap of food items that we buy in Aldi have gone back to 2019 levels, and it has helped our grocery spending come down. Overall, with the installation of solar panels, a more efficient vehicle and a general sense of contentment, our families spending overall is actually at near record lows. It again highlights the difference between personal inflation and actual inflation - prices might be up on certain things, but if they aren’t things that one buys, it doesn’t really make much of a difference!
The Final 12 Months
I missed a pretty important milestone last month. Our FI portfolio crossed the €630k mark. This may not seem that important, but it officially means we are €120k away from our FI number - we are now over 84% of the way to FI!
The reason the €120k countdown is important, is because I am estimating over the next 12 months, the portfolio should grow on average around €10,000 per month (€5,000 from our own contributions, plus €5,000 in growth each month). This should mean we are on the home stretch to hitting our FI number - and hopefully within the next 12 months.
I have covered pretty extensively what we will do when we hit FI over the last few updates, so definitely check out last month’s article in case you missed what we plan to do once we hit FI.
September 2024 Portfolio Update
The month’s are flying by, and I noticed that as my workload reduced recently, the weekdays just go by that much faster! September was another solid month - another step in the right direction. Our four properties had no major issues and our stock portfolio was up slightly, pushing us further along. All going well, we might cross the €650k mark next month.
Here are the overall portfolio numbers:
| Portfolio Summary (as at 30th September 2024) | |
|---|---|
| Opening Balance | €630,048.94 |
| New Contributions | €5,000.00 |
| Portfolio Growth | €6,397.31 |
| Closing Balance | €641,446.25 |
Monthly Portfolio Growth Report
| Monthly Portfolio Growth Report | |
|---|---|
| Capital Gain + Dividend Income from Equities | €3,324.37 |
| Real Estate Income + Capital Gain | €3,056.14 |
| Interest on Cash Savings | €16.80 |
| Total Growth | €6,397.31 |
| % Return | 1.01% |
Portfolio Breakdown
The table below shows the breakdown of my portfolio into the various asset classes:
| Portfolio Asset Breakdown (as at 30th September 2024) | ||
|---|---|---|
| Equities (Stocks) | €180,818.33 | 28.19% |
| Real Estate | €460,033.53 | 71.72% |
| Cash | €594.39 | 0.09% |
| Total | €641,446.25 | 100.00% |
2024 Year to Date Returns
Here is a summary of my year to date returns for 2024.
| 2024 Year to Date Growth Report | |
|---|---|
| Opening Balance | €498,900.39 |
| New Contributions | €63,200.00 |
| Equities Capital Gains + Dividends | €27,257.45 |
| Real Estate Capital Gains + Rental Income | €51,992.85 |
| Interest on Cash Savings | €95.56 |
| Closing Balance | €641,446.25 |
| Portfolio Return | €79,345.86 |
| % Return | 14.12% |
Lifetime Portfolio Returns
Here are my returns since I started in 2018.
| 2018-2024 Growth Report | |
|---|---|
| Opening Balance | €0 |
| Contributions (Money Added) | €405,067.78 |
| Equity Release* | €41,220.21 |
| Real Estate Capital Gains + Rental Income | €143,132.98 |
| Equities Capital Gains + Dividends | €55,794.45 |
| Interest on Cash Savings | €95.56 |
| Other** | -€3,864.73 |
| Closing Balance | €641,446.25 |
| Lifetime Portfolio Return | €195,158.26 |
* 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.