November Financial Update

Last month of the year, the final hurdle. Everyone is well into the holiday spirit and we are finalizing the last things we need to do before the end of the tax year. December is pretty busy as it’s also the month when most of our dividends come out as well as our required minimum distribution. I’ll write about those later in the month.

So here is how the markets and ourselves did during November.

Market Nov-17 Q4 17 YTD
S&P500 2.80% 5.09% 18.26%
NASDAQ 2.17% 5.82% 27.69%
DOW 30 3.81% 8.33% 22.82%
Benchmark Vanguard 2040 Fund 1.81% 3.69% 19.20%
Our Net Worth 0.88% 1.18% 0.74%

Current FIRE rate = 3.4% (target = 2.5%)

FIRE rate is the annualized percent spend compared to net worth.

So for November this is…

〈∑(Spend_Jan…….Spend_Nov)/∑(Networth_Jan……Networth_Nov)〉 *12

A 4% FIRE rate is the same as the oft quoted 4% rule, so anything under that should be sustainable, but we are aiming conservative by going for 2.5%

As you can see it was another good month for the major market indexes with each up over 2% and the NASDAQ up by almost 4%. Our own net worth was only up by 0.9% about half the benchmark Vanguard 2040 fund. There are two main reasons for that the first is that yet again our personal portfolio of ex-company stock was down another 2% (still at a 5 year low) secondly we had a big expenditure (see below).

Our net worth for the year is finally positive for the year (yay!). It is hard to get too excited when we are only up by 1% when the markets are up by 20% or more. However there was so much fluidity at the start of the year I’m not sure the baseline in January was totally accurate. This year was almost a dry run or Beta test to ensure we had the process and the budgets correct. Next year should be a better indication of where we are. My current estimate is that although our aim was to live at a FIRE rate of 2.5% withdrawal we should end the year at around 3.3%. It’s still not too bad but we should do better next year.

November in Detail

Based on our $100 a day for “day-to-day” living we were within $70 of that for the month so I think that worked out pretty well. Our biggest expense still seems to be groceries; we’ve been trying to keep this under $500 for a family of 4, but last month we were over $800. I’ll have to review in detail and see where that is going. I know that there was a Costco run on there which is always expensive; but we only do that only every 3 months or so.

Our transportation bill was a bit higher than usual due to paying for a trip I’m taking in February, but it was still manageable.

On the plus side our restaurant and entertainment bills were the lowest they have been all year so hopefully we have that under control.

There were two large bills this month which blew our big-ticket item budget considerably, firstly we had the last 2 months of the year COBRA health insurance. Secondly we had a full year’s worth of property taxes due. We could have paid this quarterly but there was a 3% discount for paying all at once. It would still be nice to amortize this over the year rather than taking the hit all at once, but the good thing is there should be no other large big-ticket items until next summer other than booking flights for the summer holiday back to Europe.

Overall I feel like November went well, and we are hitting our stride in terms of spending patterns.



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