Project 2235 September 2020 Update – A New Normal

Hey everyone, hope you are all doing well in this altered world we are currently living in… And please, continue to keep safe!

I thought it was about time I did a Project 2235 update as it’s a couple months over due for sure :D. I plan to fill you in on what I have been up to over the last few months and of course provide a financial update to see if I am still on track to complete the 3 year 2235 plan.

Operation 2235

So just to remind everyone, back in November last year I put forward a plan called Operation 2235. In summary, the plan entailed the following:

  • Reach a portfolio of £250,000 (Base FI) by December 2022 whilst I was still 35 years old (hence the name Operation 2235)
  • Achieved by investing £1500 a month over 3 years (£54,000 total) – With an assumed fair sail wind of 5% (2% real interest minus inflation)
  • Do the above without depriving myself whilst still being able to weather some expected unexpected outgoings

Financial Update – Sep 2020

The below figures are taken from 20th September.

  • Monthly investment (April – Aug) – £1500 each month 
  • Savings rate (April – Aug)– 55% each month
  • Investment portfolio – £182.360.08
  • Cash is king fund – £10,000
  • Emergency fund – £1004.29
  • Big expenses / holiday fund – £2795.15

Total Liquid Funds = £196.159.52

When it comes to my financial review of the last few months. I must say I have been very pleased with how things have gone with my spending and also with the market in general. I still have doubts about the market staying as high as it is but I can’t pretend I can predict it so I won’t even try to. I will simply continue to invest every month and won’t even contemplate market timing for a split second. As with my previous update, I have managed to continue to save money on fuel with mostly working from home and also on household bills as I am now mostly living at my partners. On the flip side, I have spent more than ever on going out and gifts which has balanced this out so I am still spending to my budget very closely. This has meant that I have continued to successfully hit my target of investing £1500 every month whilst most importantly – not depriving myself.

My big expenses fund has taken a slight hammering in the last few months due mostly to a few days trips, a £300 Liverpool weekend outing (expenses included) and recently from pre-ordering the PlayStation 5 which I had to get day one…All of this of course in my humble opinion is money well spent 🙂 and is guilt free. I am finding that the amount of discretionary spending I give myself per month coupled with my big expenses fund being available, is allowing me to continue to meet my targets whilst still enjoying the here and now (no deprivation). This is so important to me but until we return to a more normal situation without Covid-19, I won’t know if this is sustainable for the next couple of years and if I will need to invest slightly less if I find I need to spend more.

Some Normality Returns…

At the time of writing this, there are talks of more national lockdown restrictions coming into affect in the UK, there may be the banning of households visiting other households, curfews at 10pm in restaurants and pubs, the closing of hospitality venues and who knows what else. For this update though, I will be talking mostly about my life during the past few months and I can definitely summarise my activities during this time as returning to some normality, a new normal so to speak. I will now go into some of what I have been getting up to.

Restaurants and Pubs…

Oh boy, it really is the simple things in life. I have really missed being able to go out with my partner or friends to restaurants and pubs. After the restrictions started to loosen on July 4th. I found myself slowly getting back to normality on weekends by being able to go down my local for a few drinks on a Friday. I was also able to go back to Wetherspoons for some nice cheap grub with a few cheap pints thrown in for good measure.

It really is a guilty pleasure of mine to go out on a Friday and or some Saturdays for a few drinks and some food. I have quickly got used to the new normal of sanitising your hands on entry and leaving, track and trace form filling in, consciously trying not to get to close to people, dividers between tables and keeping left whilst walking around. To be fair, I felt fairly safe in most places I have been, and usually people have been abiding by the rules where I have visited. I do take this Covid-19 very seriously and I like to side with getting back to a new normal whilst always being mindful that we are going through a pandemic, this must never be forgotten.

Continue reading “Project 2235 September 2020 Update – A New Normal”

Project 2235 April 2020 Update – Coronavirus Pandemic

I truly hope all of you are keeping as safe as you can and that you are weathering the storm of this pandemic and lockdown as well as you can. This first update post certainly will have different content to what I was expecting that’s for sure. There is a large contrast between December to February that I now know as the living life as normal months where as March has been a very different kind of month for sure. We will of course get through this, life will eventually return back to what we recognise as normal I am sure, it just might take a while.

So just to remind everyone, back in November I put forward a plan called Operation 2235. In summary, the plan entailed the following:

  • Reach a portfolio of £250,000 (Base FI) by December 2022 whilst I was still 35 years old (hence the name Operation 2235)
  • Achieved by investing £1500 a month over 3 years (£54,000 total) – With an assumed fair sail wind of 5% (2% real interest minus inflation)
  • Do the above without depriving myself whilst still being able to weather some expected unexpected outgoings

December to February Update (living life as normal)

The Plan

Ever since writing my original post about this plan, it has given me a real strong sense of purpose and direction even though I had a similar not so concrete plan in mind for a long time, writing it down online and sharing with you all somehow made it more meaningful I guess. It really does boil down to the same regular theme that has ran through many of my posts here which is:

Move towards FI without depriving the here and now in ways that matter and without having life on fast forward until you reach it, make sure to enjoy this part of The FI Journey just as much

Money & Investing

I invested £1500 every month as planned which always makes me feel good when I do it. Ever since getting my recent promotion, this figure has really been a sweet spot as I think any further promotions and/or money increases will go to other activities and purchases and not to my investing. 

When it comes to monthly expenditures – December was a fairly expensive month with it being the Christmas period and a multiple birthday month.  I spent a fair amount of money on going out and buying gifts with Christmas costing me around £600. I pulled some money out of my Big Expenses fund as I always do for December due to it usually being my most expensive month of the year. I ended up £6 from my budget for December which I added to my Expected Unexpected outgoings fund.

January turned out to be a much more expensive month than is usual for a typical January for me as I usually tighten the purse strings so to speak. I went to London for a long weekend trip and also went out to Birmingham a couple times for nights out. I also had food out a good few times more than normal. I ended up being £50 down from a budget perspective which meant I had to record a January deficit charge from my Big expenses fund (oh the humanity…)

The expenditure upward trend continued in February. I had to pay for a few annual renewals that I still haven’t included on my regular yearly bills monthly outgoing such as Amazon Prime, PlayStation Plus. I spent a lot of money on gifts for people in February as well which pushed my monthly deficit to £118 which I again took from my Big expenses fund. This was however something that I had intended this fund to be used for over the 3 years of this plan so this was not a worry.

Life

I had a really good end to last year in December. The month seemed full of activities and there was a nice relatively quiet rundown at work towards Christmas without too much pressure. I always like December as work always tends to be quite project wise and I get into a reflective mode in general and what with multiple birthdays, German market trips, many festive drinks and the like – there’s a lot to enjoy and look forward to.

January turned out to be very similar to December in activity terms, I started the month off with a lovely multi day trip to London which despite coronavirus being known of, it didn’t feel like it was going to be anywhere near as big as it has since become to me at least so that was enjoyed to the full without any fear – a few pub crawls around London with my partner was fun indeed.. This was followed with a very productive couple of weeks at work where the previous quiet December was soon left behind with huge projects and very tight deadlines coming out of the no where. Despite being very busy at work, it felt very rewarding as what we was helping to deliver would really help patients at our hospital and the quality of care they would receive.

February was much quieter that the previous two months. Work was steady and going out was less frequent although we did go to a couple of live bands in town which was cool. A couple of take aways and beers at home on a Friday was the most exciting things I got up to really. I started to follow the events of the coronavirus much more closely mid month and I think I wasn’t going out so much as a result. I must admit I bought forward my bulk buying of beans, peas, cashew nuts etc that I do every couple months just in case before any restrictions were put in place. I am very glad I did this for the beans as I have a can a day…:D

March Update (During Coronavirus lockdown & Crash)


Money & Investing – The global financial crash – £27,000 Loss :O

Well, I knew that at some point I would experience a market decline that would wipe out tens of thousands of my portfolio. I prepared for that psychologically in part by not having all my eggs in one basket – By choosing to invest 40% in bonds along with some large cash buffers and owning my own home which would I hoped, make the loss not feel as big should it were to occur. By having enough cash to last over a year, I hoped I would not need to sell during a big decline if I were to lose my job at a similar time which would make me feel like I hadn’t truly lost the money invested in a sense. None of this however can be tested until such a decline would occur. How would I react?

At first I didn’t really react much to the declines I read about on the BBC news. I never checked my portfolio and I carried on as normal. I was more concerned about the virus and the impact it was having. It was only after several days of declines that my curiosity took the better of me and I logged in. I was £27,000 down. I experienced a small twinge in my stomach for sure but I was fine really.  My thoughts about the situation from a market perspective was, this year might end up written off for sure but things would return to normal. The markets will rise again and all will be well. I was more concerned about the human impact this was having on families and how we were all being affected pretty much at the same time.

I must admit that I was impressed with how I handled the loss. It would be interesting to know how much of that was because it seemed to be affecting us all with this being linked to the pandemic and also that I wasn’t chasing a solid set date for FI as much anymore. Nevertheless, it was a good test of my nerve. I made no sells and invested as normal the £1500 for March at the end of February. I also took advantage of the decline and sold part of the fund that was not in my ISA wrapper and put this back into my ISA to fill up the £20,000 allowance slightly earlier than I originally planned to.

My expenses for March was fairly high. I ended up £35 down which I took from my big expenses fund as usual for any monthly deficits. Most of this expenditure come from having a few more take aways than normal and also buying a fair bit of food and gifts for some relatives to help out.

Gratitude

Since losing the £27,000 this has now gone to around £18,000 at the time of writing but even when this was at its worse I still felt grateful for being on the path to FI and had no regrets about my pursuit of it. This has led to the following benefits which help in this situation which gives me immense gratitude:

  • I have a years supply of money to pay for all my bills if had no income
  • I own my own home so at least I know my home is all paid for regardless
  • My expenses are very low, I don’t need a huge amount of money each month to get by for essentials

Life – Unprecedented times

It’s been a very interesting March that’s for sure. This lockdown really has changed the shape of my activities as it has for most. I enjoy going out for a drink and dance on the weekend. This has been annoying to lose but the fact is it’s the simple joys and freedoms that I have missed. Just being able to pop in to see my dad, friends and other relatives to have a cuppa. Being able to go for a random drive, give my gran a hug etc.

I have been able to work from home for the past couple of weeks with having to go into the office 1 day per week on a rota which I am actually grateful for. It’s been interesting to experience working from home on the regular as it’s let me find out if I would like to in general when doing the same job I do now. I must say that there are benefits and negatives like with most things. I enjoy being able to stay up later at night as don’t need to get up so early, no commute etc and can wear jeans. I really do miss the human interaction though and speed of asking things in person. It really does make life easier and gets you up and about. It’s shown me that for me there is indeed a social element to working I miss when at home remote working. We have lots of banter in my office which I know not everyone gets to experience.

As always, thanks for reading my post. I’d like to know how you all have dealt with the situation we find us all in and especially how the large losses have affected you as for most of us, this will be the first huge decline we have experienced.

Chris – TheFIJourney 

My 3 Year £250,000 Target – Operation 2235

Intro

Hope everyone’s doing well. I have had a few busy months lately and have been focusing quite heavily on side hustles and then back to some career development by pursuing some new certifications in my field. I will do a general update discussing some of this as my next post during a Christmas review most likely :).

Operation 2235 – Intro

Back to Operation 2235… I had to give it a name like that to make it sound cool. It should be considered pretty cool on its own though I know but still there it is…

So there I was reviewing my finances a week or so ago and entering some costs as it were – I still track to the penny and record it against categories such as Going out, Gifts, Food etc. I updated my current portfolio total which I do once a month and it got me going yet again to an online compound interest calculator – oh boy have I visited that site a lot over the years. I put in 5 years in months and 5% as the interest (not 8% accounting for 5% real growth with inflation taken away) and I noticed that my current total was £161,000 and with my recently new monthly investment of £1500 (increase from £1160) I would be on track to hit £250,000 in 3 years time when counting the money I have in my Cash is King fund. This would coincide with me still being 35 years old at this point. 2022 – 35 years old (Operation 2235 :D)

Many years ago when I first started getting into FI, I dreamed of getting to £250,000 (saying Quarter of a million sounds so much better…) which I considered Base bare bones FI giving me the £833 monthly figure at 4% SWR, this would pay for all my current bills and basic outgoings as fortunately I am mortgage free. I dreamed of getting to this figure before I was 40 but originally it was going to take me until 50.. this has since fell due to a good dose of luck and increasing my monthly investments with a couple of promotions along the way.

The Plan

In order to hit my target of the quarter of a million. I need a nice sail wind that I won’t be able to control such as the 2% real growth for 3 years with no bears showing their face. Who knows if this will happen what with what’s going on politically and with the long bull run we have had. Life itself will have to go as I plan also when it comes to my job, health and such and I only mention these things as I am very aware that I can only control so much and even if the wind turns against me, I will still consider this plan a success if I manage to pull off the below;

  • Invest £54000 over the next 3 years (£1500 a month)

  • Do the above without depriving myself whilst still being able to weather some expected unexpected outgoings

Is it Achievable?

Is this target I have set myself achievable? I would certainly say it is yes. The key thing for me that will determine this is that the £1500 monthly figure itself is realistic given the realities of life and my increasing expenditures lately.

With that in mind when I look at this target I have looked at 3 areas financially that I need to ensure are strong. There are of course many other factors such as ensuring I keep my job, working hard etc but financially my main instruments used in this success are as follows:

Expected Unexpected Outgoings Fund

I have always had a £1000 cash expected unexpected fund that I use to make sure my monthly investment amounts are safer from being meddled with due to any number of issues propping up. I currently fund this in terms of replacing it every year so that should I spend the lot, by the next April I will have a fresh £1000 ready. This is done from normal cash monthly interest, the 2 months of council tax I don’t pay and 2 yearly payments I receive for doing a task for family members. Every year for the last 5 years, something has come up using some or most of this money. Whether it’s a large vets bill or to replace a boiler, fridge etc or fix my car. This has always helped me out so this fund for me is a big first defence of not touching that £1500 monthly investment

Big expenses Fund

The next major pillar to the success of this plan is that when it comes to big expenses such as buying that new iPad, new 4K TV, PS5 or yearly trips to Amsterdam and Liverpool etc. I can pay for these things without it impacting the investing. This fund which has been sourced from side hustles (mostly MB) stands at around £7k and will be there to use for these next 3 years. This is a huge relief for me as it means I can still do the things I want to do without yet again impacting this plan.

Non depriving Discretionary spend 

Now for me, this is probably one of the most critical parts of this plan. One of the most important parts of all this for me is that this is a financial plan and goal which of course impacts so many areas of my life. Despite this however, I don’t want to spend 3 years not doing the things I want to do such as having drinks on a Friday, going out for a meal once a week, buying that game or book when I want them or going out on day trips etc. I am still very very careful with my money and I always look for deals and buying food in bulk as an example but I will not compromise on quality of life when there are things that for me really bring great joy. 

For these reasons, I have set a weekly discretionary spend that for me should be enough. It’s slightly higher than I am used to but not much more. This is in part because I have been spending more money on buying gifts for people and going out in the last few months and I don’t want that to stop.

In Closing

I will provide updates on how I am getting along with this £250,000 challenge from now on every quarter at least. I would love to know your thoughts on this and if you could share any of your financial plans however large or small.

Chris @ TheFIJourney