Stocktake: Q3 2016

Dover Fog
Fog in Channel. Europe Isolated.

The pound costs US$1.30, and I’ve now broken a personal record for longest time spent seething at dimwits my fellow countrymen whose stupidity democratic rejection the EU has negatively impacted my plans. My earning power, as measured in VWRL shares, has been reduced by circa 10% compared to before the referendum, and this has happened way too early in my accumulation stage for it to not matter. Perhaps I should drink more.

Give me coffee to change the things I can change and wine to accept the things I can’t.

– Anonymous
(dude in charge of the chalkboard sign at my local café)

Other than that, it’s been a fairly benign quarter. The SIPP is filling up, slowly, the S&S ISA gets a nominal amount chucked in each month, ditto Emergency Fund.

I use ONS metrics for net worth related goals – why reinvent the wheel? Calling home equity “property wealth” might sound a tad silly, but it seemed reasonable to keep the ONS terminology when using their formulae.

Let’s take a look at the detail.

Goal 1: 60% savings rate

The good news is that summer’s over along with its excesses: boozy lunches that become dinners, impromptu parties on account of it being sunny and a weekend, purchases of outdoor gear on account of it being not so sunny and a weekend (but fuck it, it’s summer, and I’m going to enjoy it whatever it takes), and assorted treats just because it’s summer and I’ve already spent all that money on the gear, so what’s another few quid.

The bad news is that summer’s over.

As expected, the monthly savings rate has recovered from the previous lows, and the in-year average stands at 66%.

Goal 2: 10% mortgage overpayments


Goal 3: Pension

Given the status on Goal 2 and the newly added Goal 5, pension has been promoted to my FI vehicle of choice this year. Having filled this year’s allowance I’m aiming to utilise all carry forward allowance that’s due to expire this year.

Goal 4: Emergency Fund and Freedom Fund

Freedom fund has been getting its regular monthly contribution as per usual. Emergency fund is getting more than it would otherwise purely because I have to wait until March 2017 before I know my earnings for this tax year. That will determine my pension contributions (see Goal 3 above). I’m aiming to optimise so I pay as little tax at 40% as possible.

Goal 5 (added midway through the year): Pay no more than £22k income tax in 2016/17 tax year

Because they got their country back, and I sure as shit ain’t paying for it.


6 thoughts on “Stocktake: Q3 2016”

  1. “My earning power, as measured in VWRL shares, has been reduced by circa 10% compared to before the referendum, and this has happened way too early in my accumulation stage for it to not matter. Perhaps I should drink more.”

    what does that sentence mean? I can’t make sense of it..


    1. GBP has tanked against world’s major currencies by about 10% after the referendum, give or take. All else being equal, a devaluation of currency reduces your purchasing power when it comes to imported goods and/or foreign investments. VWRL comprises mainly foreign investments, and so I can now buy fewer shares for the same amount of GBP. You can see what happened to the price of VWRL (in GBP) on the 23rd of June here:
      and here is the same thing only in CHF:
      I’m still in my accumulation stage (i.e. I’ll be a net buyer global shares for the next 9 years), therefore these global shares have just become more expensive for me to buy. Sadly, unlike some of my hedgie acquaintances, I’m not paid in USD.
      Now, if I planned to live my entire life, or what’s left of it, anyway, without leaving the island or purchasing anything imported, none of this would matter. But that is not the case since I hope that, health permitting, I’ll be globetrotting after I retire. So my ability to finance the sort of FI life I envisaged a year go has been impaired by circa 10%. Which is not great.


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