So, another 3 months have passed, I’ve been living like a bit of a miser for the last few months, saving as much as I can.
I’ve installed a spending tracker on my phone which is a good way to encourage discipline and stick to an alotted budget. I can even tell you how much I spent on coffee each month, fascinating.
I don’t want to leave you hanging like that, so since you asked it was £38… which is just under a tenner per week. Seems a bit excessive, but I need to spike my caffeine to keep my interest levels up at work.
I’m toying with buying a shiny cafetiere for use at the office but I’m not sure I want to come off as pretentious. Maybe I do.
Lets see if I’ve managed to hit my targets.
Recap of quarter
- Increase property savings to £20000
SUCCESS, I managed to get this up to £21833 by the start of October. I would have liked to have bought something by now, but good opportunities are scarce where I’m looking.
- Deposit another £3000 in ISA account
SUCCESS, I put another £5000 in the account, so I’m on target to hit the £20k allowance for this year
- Ensure the emergency fund is up to 2 months living expenses
FAIL, The emergency fund dipped a little this month to £2200 which is roughly one month of living expenses. I had a couple of unexpected expenses which knocked it down. I’ve been so focussed on putting money into investments that I’ve neglected this point. Not big, not clever. I’ll need to rectify this. I’ve been advised that my current employ is due to end in about 7 months. By that time I need to have at least 5 months living expenses stashed to provide a buffer whilst I find more work.
- Only purchase shares at a fair price
SUCCESS-ish I’m still lamenting my purchase of interserve from last year. Every few months it falls off a cliff. This serves as an ever present reminder to check for the downside when buying a stock. This quarter I bought 3232 shares in Greencoat (UKW). They own multiple windfarms and arrange long term contracts to sell the electricity to energy companies. The yield was standing at about 5.3% when I bought them. The price has slid a little lower, so depending on your view on the likelihood of government meddling, that might represent an opportunity, or not.
I also bought shares in National Grid, they were pretty cheap at the time and are a big boring company consistently paying dividends. The threat of nationalisation has sent their shares even lower.
Passive Income for previous 3 months
- Property: £0
- Dividends: £140.45
- P2P Loans: £0.45
- SideBiz: £0
Total = £140.90
Considering my last income report was 58p, I think this is noteworthy progress. It’s enough to cover my monthly coffee habit with a bottle of Chilean Merlot thrown into the mix each month to keep the blood flowing freely.
The dividends came from four companies.
- Severn Trent = £37.65.
- Big Yellow Group = £16.56.
- Greencoat weighed in with £52.44, this is a quarterly dividend so I expect to see another £52 in November.
- Legal and General also chipped in with £33.80.
It’s still a little shy of my target of £1000 per quarter… by about £859.10! I’ve revised my target downwards from £4800 to £1000 to refocus slightly on property. As it stands for this quarter I’ve hit 14% of my dividend income goal. If nothing changes my projected dividend income for next year is £680, an overall yield of 3.5%.
I’ve put together a monthly view of passive income. There’s four lines, one for each area I’m tracking. All of the lines would look much nicer floating in mid air and not glued to the base of the graph. There’s far too many zero’s on there but progress is being made.
Net Worth – October 2017
- Property Savings: £21833
- Shares Value: £19380 (Previous £11892)
- Cash in ISA Share Account: £165 (Previous £1032)
- Zopa Account: £104.75
- Cryptocurrency: £2102.18
- Emergency Fund: £2201.52 (Previous £2797)
- Debt: £-16200 (Previous £-16200)
- Total Net Worth: £29586 (Previous £4447.98)
I feel like I’m making good progress. This is due in large part to me lucking into a lucrative job. I guess I finally understand what “leverage your network” means. It doesn’t mean schmoozing and being a sycophant, it just means making a good impression and keeping in touch with old colleagues. In the space of a year my net worth has gone from -16000 to +29586. I’ve been pretty disciplined and invested a high percentage of my earnings. This has meant cutting down on the cigars and resisting the urge to go skiing in Canada.
I also doubled my “investment” in cryptos. I’m reading a lot of conflicting reports around the future of cryptocurrencies and bubbles, the volatility is ridiculous, with the price oscillating over 20% per day. Not for the faint hearted.
Below is a graph showing my portfolio diversification. The big green bar is a chunk of cash biding it’s time waiting for a suitable investment property to come along. There’s an orange P2P blip which is my Zopa experiment. The blue bars are my different shares summed up into their respective sectors. Financials is IG Index plus Greencoat. I wasn’t sure whether that would be more accutrately placed under the utility sector. Technology is solely Blue Prism at the moment. Industrials is my £1000 “investment” in Interserve which has turned into an expensive lesson.
Aims for next quarter
The gravy-train that is my current job is coming to an end. I’m expecting to be booted out halfway through next year. I’ve had plenty of warning to ensure that I’m well prepared.
- Target 1 is to add another £5000 to the ISA. To invest in one solid dividend paying company. Maybe IBM, bit more research required.
- Target 2 is another £5000 in the house fund. I’d like to buy a place and start seeing some income. This would allow me to stretch out my emergency fund for longer.
- Target 3 is to add £2000 to the emergency fund
- Target 4 is to open a SIPP. It makes sense with the amount of tax I can save. When I get to 55 I’ll take a chunk out to pay off my villa in Portugal (once I’ve found it). The tax savings make this a sound idea, despite the fact that it seems the distant future.
- Target 5 is to open negotiations on one of my outstanding debts. I’ll see if I can negotiate a settlement over the next few months.