FIRE Update – 2020

If you haven’t seen my post from May- I suggest you read that first to get some background first.

The year of staying at home

If I had to sum up 2020 in just 6 words, it would be those. It really has felt like it’s been the year of staying at home. We closed the office I work in way back in March- and although I’ve been to the office a few times since, it probably hasn’t been more than 15 times since then. No holidays, no time away, very few family visits. I don’t think I’ve even visited another city this year- let alone another country!

Budget

Well- how did this affect my budget? Much like everybody else’s I’m guessing- holiday spend went to nothing, food out reduced 80%, lunch bill also went to nearly zero. My transport costs were already pretty low- cycling/walking covering most of my transport needs. Though- my wife stopped using the train and instead started cycling! Some short term costs associated with this (additional clothing etc), but overall this should be a saving of approx £500 a year.

Investments

What a year- it’s been up, then down, oh, down quite a lot, then rebounced, quickly and fast. But you are never really down- unless you sell, which I didn’t. Now, I don’t even pretend to understand the markets- I’m still not sure how they didn’t go down further- nor how they returned (mostly) to their previous highs. As I’ve written about before, I use index funds for the majority of my investments- so least I was diversified. It’s just, this was the first pandemic for a while and it hit nearly every industry (well, apart from video conferencing/zoom)

Dividends

Many companies slashed their dividends- as they had no idea what profits were going to be, as nobody really knew how long this pandemic was going to last for. Fortunately, I have very few investments that focus on dividend paying- just some small amounts in things like Solar4Schools, and some more local wind/hydro projects etc. I’ve written before about dividend stocks and why I don’t really like holding them- unless they are part of an index I do want a part of.

Overall

After all expenses, albeit smaller than usual, net worth was up nearly 20% in the year- although I did “bank” 4 years worth of house price this year. I’m never really sure about a) including house price, and b) when to register/record the house price either. It’s obviously a massive asset, and I think ignoring completely misses a large part of my investment portfolio- even if its the house I live on. On the other side of the coin, I will always need somewhere to live- so unless I downsize/move to renting, it’s not like I can sell it (well, equity release etc). So, for now, I include it, as a separate column.

My debt levels are still high- but average interest rate is under 1.4% now, so I’m pretty happy for the moment. It will get more interesting if I want to keep a mortgage without a “normal full time job”, but that’s still still some time away…

Future Plans

Continue to save/invest in the manner that we have been- using our LISA/ISAs as needed. I had hoped that 2030 would be the year, and even though 2020 was pretty rocky, it’s still looking like that will be the year. Though- I do think that I need to do a budget for at least a year or two before I get there so I can accurately predict (well, or more accurately) our spending levels when we get there.

I also want to invest in more “green” stuff this year as well- so probably put all new money this year in that type of thing, once I decide where that actually is. I’m looking at a portfilio split of something like (excluding home)- 70% index funds, 20% other direct investments, 10% green.

Comments/Thoughts?

Please just let me know.