First post of 2021!
I made awesome progress on my FIRE goals over 2020. I was fortunate enough to have a very stable job, which has allowed me to keep earning and investing.
I had a few goals in 2020 that I was aiming for, that were designed to keep me on my FIRE journey and make sure I’m on track. Check out below for a rundown of my financial goals and progress! I will have a more detailed post about my personal goals (including financial goals), in my 2020 Year in Review post out soon.
As I mentioned above, 2020 was really a great year for me in terms of finances and wealth creation. I started the year with a net worth of $25,677. Happy to be above a negative net worth.
Over the course of 2020. I grew my net worth to $94,555! An awesome increase, and so close to reaching my goal of $100,000! A bit unfortunate I didn’t reach my goal, but so happy with how it’s grown.
Check out the table below for some detailed numbers of my net worth components:
I saw some really good growth in pretty much all of my investment accounts. It was good to see a decrease in my HECS Debt, which will go down slowly over the next 10 years. Great to see another 8.3% increase over December.
And see below for my favourite graph of all for the growth of my net worth (which the above table doesn’t do justice):
Love seeing this graph every time I write my progress blog posts. There was a slight drop in my net worth in April due to COVID-19, but great to see the awesome recovery in the stock market.
Really happy with how my net worth is going. While it isn’t really important as a number in itself, I like to track it to see my wealth growth over the years, and it’s super motivating!
Australian Selfwealth Portfolio
I started 2020 with a portfolio value of $37,589, which I managed to grow to $68,449! I’ve been working hard to save as much as I can and invest it for my future. Again, so close to my goal of $70,000 but super happy! Having this value for my portfolio means I’m on track to retire by the age of 40. I’ll need to grow this to around $100,000 at the end of 2021 to remain on track, but I’ll see how it goes. Given an increase of ~$31,000, it should be doable!!!
See below for a graph of my performance over the past 12 months:
You can see a very pronouned decline during COVID-19, but a very quick and speedy recovery back up higher than it’s ever been. Great to see that my portfolio have given a return of 14.5% over 2020, compared to the Australian market 1.1%. It will be interesting to see at the end of next year if I can keep up the awesome return rate, but I expect it may drop, but I’m really aiming for at least 6% annually.
Some of the growth in my portfolio has been due to my house deposit, which I’m investing until I need it (not sure when exactly but not soon). If I did this a bit earlier, I may have been able to reach my goal. When I do need my deposit, this will reduce my portfolio value quite a lot.
Something I’ve been trying to do is increase my savings rate to 50% per year. In 2020, my total spending rate came out to 39%, lower than expected, but still making progress. I’ve tried to limit my spending, but quite regularly something comes up that needs to be paid for, or just something that I want and I can’t hold myself from buying it (but they are items I’ve spent months longing for and put money aside to save for).
Check out below for a graph of my spending rate over 2020, by month:
Really happy that I managed to reach over 50% for some months, and a whopping 67% for April! I had a huge negative savings rate in June due to paying for a $5,500 perstonal trainer course. But hopefully with my added skills and expertise, I can convert that into greater savings rates for the years to come.
FIRE Goals for 2021
I’ve got similar goals for my FIRE progress throughout 2021, which some slight changes:
- Grow investment portfolio to $100,000
- Grow net worth (don’t know exact number yet, but given my growth in 2020 perhaps $200,000)
- Spend a maximum of $30,000 (details below)
With my spending $30,000 goal, I’ve chosen this goal over a savings rate (I’ll still record), as I would like to simulate a year of early retirement. Spending $30,000 would mean that I would need to grow my investment portfolio to $750,000 by the time I’m 40 (definitely doable). This would allow for a 4% withdrawal rate.
In the perfect scenario, this $30,000 would not actually include any payments towards rent (as I would not have to pay any rent as my house will be paid off). I think I’ll include rent as part of this $30,000 for 2021 to really focus on saving more money. I’ll have to think a bit more about this goal, but I’m keen to give it a shot.
So that’s my update for the year of 2020. As I’ve mentioned above, incredibly happy with my FIRE progress, and expect many more updates to come in 2021!