2022 – May update

Target FI number – £1,000,000 (≈$1,256,000)
*Number updated to 3% safe withdraw rate for 40-60 time horizon withdraw*

Current Net wealth – £272,535 (≈$342,000)

Change:

-£60,177 total month to month change in net wealth. Added balance of money owed which was borrowed to fund equity in house to settle and the inclusion of the outstanding student loans England balance as the 12% RPI rate repayment is a conern.


Wealth allocation:



Updated net wealth graph:



Markets, debt and student loans:

p.s I have updated the number for FI based on a 3% safe withdraw rate as research on sequence of returns risk, i’d rather be on the safer side. This has had the result of moving my target number from 800k GBP to 1,000k GBP for growth/income producing assets.

Markets have rallied somewhat on the outlook of a resolution in the Ukraine with them potential becoming a neutral territory outside the potential control or influence from the western NATO alliance. The human impact still continues and is difficult to read and empathise with, the idea of being forced out of your home to flee.

Another month passing with BOE rate rises and the Korean (south…) central bank followwing suite we should see central rates continue to rise I believe over the next 18 months to kerb the rapid inflation seen across the economy. challenge is growth as ever is fraile and britle to any set backs so may see a period of stagflation.

Announced recently is the rise of student loans to 12% for those on plan 2 having started university 2012 or afterwards. Yup thats me. with this news I can no longer afford to ignore this ‘loan’ that will be forgiven either either after 30 years or oncee paid off – which ever comes first. Currently the balance is 33,000 GBP outstanding which is a lot less than the 50/60k I ended up leaving University with back in 2016. Pay, Bonuses and other income have slowly cleared this but at 12% will be challenging to repay without keeping up with thee interest portion. In my figures until now I have left out the student loan as it’s in practise a marginal additional tax that is levied at 9% of earnings over £27,295. However I think this news break changes this to being of signficant impact and therefore have added it back in as a debt that needs clearing.

Also an ommision from the netwealth calculations was a 25,000 GBP loan to cover the equity buyout – I have added this back in althought a significant portion already cleared. At a later date I will add a link to the google sheet on a view only mode should you wish to see the finer details. It’s a thought in progress not sure when this will be available.

As always Ramin at PensionCraft seems to describe this best with comentary from industy professionals rather than an armchair post writer. See video below.

Has been a rocky month and impact on the financials but life throws all sorts at you.

See you next month… In the meantime I will plan to do some seprate posts about the goals, figures and approach and time-line as I have arbitratly just jumped into doing updates rather than providing context to the numbers.

Best,

FIN.

“We suffer more often in imagination that in reality.” — Seneca





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