Monthly Finances - July 2021

A great month and a hair's breadth away from a major milestone!

Life, Health & Early Retirement - 15 Months Since Retirement

July felt like it came and went in a flash. My goodness though, was it cold in Cape Town? Yoh!

I had to actually scrape ice off my windscreen one morning in July, reminding myself that yes I do live in Africa and no, it's not supposed to be cold like this. I also learned my car has a frost warning light, something I haven't seen since we left the UK.

I had screwed up completely on ordering our usual batch of 2000 pieces of blue gum firewood for winter because of our trip to the UK in May and because of the rain it's pretty much a waste of time now as all the wood available will be wet. So I spent the month heating the house with the airconditioning which I might as well been setting fire to R100 notes, it would probably have been cheaper. So mid-month being a resourceful soul I went and gathered up all the useless wood offcuts from my woodworking and decided to burn them in our wood-fired stove which saw us warm (ish) for the rest of the month.

It was however another month of primarily being locked down in the house trying not to die. We had a doozy of disasters in SA in the last month; We had rioting and looting, an alcohol ban, freezing cold temperatures, torrential rain and flooding, the peak of the third wave of covid, a taxi strike which involved a lot of people losing their lives and a good bout of load shedding (rolling power blackouts)

Just another month in South Africa!

I still wouldn't choose to live anywhere else right now as now we've started to have a couple of warmer days and spring is only a matter of weeks away, I'm excited to get out and about and explore this beautiful country as the vaccination numbers rise and the whole world gets back to normal.

Both Mrs H & I have been terrible when it comes to the dieting in July, I think it was the cold and the chaos of everything going on which made food one of the few things to cheer us up. We'll be repenting those sins in August and I even looked into a gym membership. Unfortunately Virgin Active don't seem to be doing month to month contracts anymore and one can only get a 24 month contract. I see straight through that ploy that it is to avoid customers not paying during lockdown or load shedding periods so I won't be joining them on principle as its a bit of a lousy trick to pass on your risk to your customers.

On the health side, it has thankfully been fairly uneventful except for my damned arthritis due to the cold. I have a condition called Ankylosing Spondylitis which I was apparently born with and was diagnosed when I was still a child. It doesn't bother me too much but as I get older, the weather plays a big part of how bad it is and July was the worst for a long time. I did discover that my car has heated seats which is making the daily commute to pick up our housekeeper (the taxi strike is ongoing) a bit more enjoyable for my spine.

Net Worth

Our Net Worth: R15,856,059 / $1,132,578 / £813,133

Previous Month: R15,079,503 / $1,077,136 / £773,328

Change: 4.9% (Previous Month +3.0%)

Our net worth grew massively this month almost by 5% and on the back of a good (recovery) month in June. It was a mix of side-hustling and investment returns as well as an end of month rally on cryptocurrencies and a nice underspend on the living expenses.

The big news however is that we're getting really close to our Fi number. Whilst I calculate all of our finances to my 100th birthday, I also track to my 85th as a figure to work to help me gauge if I can quit the side hustles (or the one related to the corporate world) as I only planned to do "non-passion hustles" for 3 years from retirement and I'm 15 months of 36 in. As of today, I'll run out of cash at 83 and a bit if I don't generate any additional income of any kind so another good month might get us over the line for good.

My other short-term milestone is for us to become GBP millionaires and with £177,000 to go and a boost of around £40k this month, that might still be achieved in this financial year which would be massive for our future plans. There's 7 months left in this financial year so I would need to generate returns of an average of R500,000 / $36,000 / £25,000 each month which frankly sounds pretty impossible right now as I've only delivered that level of return in 2 of the last 16 months, but I never say never and you never know what opportunities lie around the corner.

Living Expenses

• Living Expenses: R61,234 / $4,374 / £3,140

• Budget: R68,000 / $4,850 / £3,400

An absolutely brilliant month for the living expenses with an underspend of close to R7,000 / $500 / £260. Having analysed the budget a bit to find out why, it seems we spent less on groceries, which is almost certainly down to the alcohol ban and not eating any diet based foods (eating low carb is criminally expensive). We also didn't eat much take out, probably because I was making junk at home! Other than that it does feel like everything is getting more expensive. Just this morning I heard on the radio that petrol is increasing by R0.91 / $0.07 / £0.05 per litre this week which is actually close to 6% in a month. Food is also being affected due to issues with the shipping ports in South Africa so there may need to be a closer eye on the budget required going into the spring.

Investment Performance

• Monthly Investment Return: R699,190 / $49,942 / £35,855

• Investment Return Percentage: +4.6%

• Annualised Investment Return: +8.4% ( 7.6% Last Month )

Lat month was good, but this month was great.

I should remind everyone that this investment income includes side-hustles as I see them as an investment of my time and money (and they cost money to get going) so don't be mistaking me for some kind of investment oracle like Warren Buffet.

Things have gone well though in July. First off, the cryptocurrency markets bounced back after a hellish couple months and because my little robots (I have 28 crypto bots running now) make money when the market goes up, we were able to capture most of the upside throughout the month.

A couple more cattle got sold for a decent return (around 12% annualised) so that saw some profit and some investment capital flow back into the accounts. I haven't replaced the investments as I find the cattle a bit boring considering the returns so I have my eye out for something new with that cash.

I topped up both mine and Mrs H's Tax Free Savings Accounts with the maximum contribution of R36,000 / $2500 / $1,800 each as the local SA markets were underperforming at the start of the month so I took the opportunity to "Buy The Dip" and as a result they are already showing a small but helpful upside.

The other win was as I predicted, the rand weekend against the Dollar or the Dollar strengthened against the Rand, I'm not sure which but that boosted all of my Rand denominated ETFs that are US based investments (most of them).

Most of the stock market investments did OK and returned around the 1% mark for the month which is right where I need it to be (12% a year) but they do feel a bit top heavy right now so rather than put more side hustle income into the markets, I bought a pile of solar panels on the roof of a school in Mpumalanga. I bought R162,000 / $11,500 / £8,100 of panels and that will provide a return of 11.53% for the next 20 years. I'm keen to keep using side-hustle money to buy solar panels as it will slowly turn the business from a consulting business to a micro-investment house which is how I'd like it to go.

Side-Hustles

It's still pretty busy on the hustling side of things with me still consulting for a US client part time which I expect to continue until the end of September. That pays a great day rate and has pretty much no costs so everything I earn there can pretty much go into investments after tax and VAT.

I also got contacted by an old colleague who is now very senior in a business in the UK and has offices in South Africa. Due to covid he can't spend time here so could use some eyes and ears on the ground which I was obviously happy to offer to quote on. There hasn't been any feedback yet but if that was to work out, that gig would give me a couple of days per week through to March next year which is close to the end of year 2 of 3 for the consulting business so fingers crossed for that working out

Finally, I've started to think about the hustling picture after Mrs H retires as I won't want to keep consulting for too much longer because we'll want to enjoy our retirement together and do some travelling etc.

I'm pretty much decided that I'm going to turn my newly found pastime of making stuff into a micro business that keeps me active and I might make a little profit as well as cover the costs of my tools and consumables. I don't expect it to make much but it's not really about that, it's about doing something I love and being able to meet people with similar interests and generally have some fun. So I'm thinking it through at the moment but intend to get going before Christmas on more of a formal footing.

So on the hustle side, a good month doing what I'm good at and putting thought into doing something I'm less good at but enjoy more. Not in a rush for any of it though so the consulting revenue can keep coming in for now.

Picking A Winning Stock 2021 - Monthly Update - Month 7

It's that time of the month again where we try and answer that burning question; "Is stock picking a science or a lottery?"

Stuffy Uncle continues to distance himself from the pack with almost 40% growth at Month 7 of our competition. There's still good movement in the lower echelons and to some extent, it's still anybody's race for bronze.

What is god news is that if you had invested in the companies that were picked using a blend of science maths and blind faith, you would be up by 12.76% for the year without any dividend reinvestment so whilst it's still not clear if you can pick a winner on the JSE long term, we only have 1 loser out of 6 picks and an annualised return of close to 23%.

I'd be very happy with that!

Summary

So in summary, a massive month for the finances and a huge jump in how much our savings will last us which is reassuring to me that I'm managing the finances sustainably. Knowing that I can live until 83 without lifting a finger should I so choose helps with the sleep at night as I'm currently still lifting a few fingers.

Despite all that's going on in the country, I have little to complain about other than being locked down is now getting old after being this way for a year and a half. I have my 2nd vaccine jab in 2 weeks time so even if things don't change so much on if we're allowed outside, at least the threat of imminent death is relaxed a bit!

I'm hoping to have some exciting news to share in next months update which will really mean the rubber is hitting the road so make sure you tune in for that.

Until next time, keep living

As of 31st July 2021 we have enough money to last until I am 83 years old which is 38 years from now