Looking back on my Savings journey
In order to stay motivated in your journey to financial independence it’s sometimes good to look back and see how far you have come. In the game of saving for financial independence it’s worth keeping a record of your net worth. You don’t need to monitor this everyday. Some savers like to do this monthly or quarterly. Being a bit impatient I like prefer the former and I have been monitoring my progress since July 2006, almost 11 years.
For this series of posts I will look back 1 year, 3 years, 5 years and 10 years to show you how my net worth has increased and some details of what I was doing and the areas I was invested in at these times. Now my net worth is £91,749 of which about 60% is in my buy-to-let property, 20% in pension funds, and the remaining 20% spread between peer-to-peer lending and cash. See my June update for further details.
1 year ago - £80,218
A year ago my net worth stood at £80,218 so in the last 12 months it has increased by over £11,500, which is probably more than I have earned in salary over that time. I was working in the UK at that time and had recently purchased the buy-to-let property. The property had been tenanted for almost 2 months so the initial costs of getting the property to market which amounted to just over £3,000 were beginning to be paid back. The gain of £11,500 is probably 40% rental payments from the buy-to-let, 30% new money added to my savings and 25% due to stock price increases in the pension funds (some of these are overseas funds so they gained when the value of the pound plummeted after the brexit vote) and 5% interest on cash and peer-to-peer lending.
3 years ago - £63,862
Three years ago my net worth stood at £63,862, giving an increase of about £28,000 over those 3 years. At that time I was working in Korea with a net salary of around £30,000-a-year. My savings rate was only set at 25% but I usually added more than this to my long term savings. As I didn’t own the buy-to-let back then my money was largely invested into tracker funds in an ISA. This was allocated mainly to European stock funds as well as Emerging Markets stocks, Asian stocks and an Asian REIT fund.
5 years ago - £32,378
Half a decade ago, back in June 2012 my net worth stood at £32,378 meaning in the last 5 years it has increased by almost £60,000. Quite an impressive figure given my income. At this time I had been in Korea for about 4 months so was looking at increasing my net worth given my healthy pay level. The majority of the money was invested in my ISA and largely in the same funds as above with the possible addition of a FTSE100 tracker.
10 years ago - £9,801
Close to the beginning of my journey which began in July 2006 with a balance of £4,218. By June 2007 this was up to £9,801. Again I was working in Korea albeit on a smaller salary than the one quoted above. This was my first time in Korea and I was on approximately £18,000 after tax. At this point my savings rate target was only 15% but I probably achieved just over 25% over the 2 years that I was there, having left in August 2008.
So there we have it. Fairly good and consistent numbers. As the years go on passive income and asset appreciation adds to the money I save each month. Between T-10 years and T-5 years the net worth increased by £22,577 or about £4,500-a-year. In the last 12 months it increased by £11,500 or about 2.5 times the early rate so progress is clearly being made. The next target is £100,000 which at this rate should be around March 2018. Fingers crossed!