Net Worth & Freedom Fund – June 2015

Freedom Fund

The accounts below generate income for me, and my long term goal is for that income to increase to a level that covers my expenses on an annual basis. The amounts display the current value, not the cost. 
  • My expenses are currently approximately £10,000 per year (£833 per month). 
  • The average yield from my dividends is currently over 5%. To be conservative, I’ve based my Freedom Fund’s yield on 4%. 

In order to cover my expenses, I will need a portfolio worth £250,000. This will generate £10,000 a year of income. My goal is to achieve all of this by my 40th birthday which is 5/11/22

The numbers in the tables below were accurate as of 3oth June 2015. 


Freedom Fund
H&L ISA £23,145.06
iWeb ISA £2,490.54
iWeb CMI £6,663.66
Peer to Peer Lending £86.76
Freedom Fund £32,386.02
% of Goal 12.95


My 2015 Freedom Fund Goal is £50,000 (20% of Target)

My FF at the start of January was worth £25,030.75. After the first half of the year, it’s now increased to £32,386.02 (29.3% increase). Most of the Dividend Investors will be experiencing lower portfolios with the drop of the FTSE 100 and All Share. I’m pleased with the increase overall, but I’m not making the level of progression I need to hit my 2015 Goal currently. I’m currently averaging an increase of £1,222 per month and if I continue with this amount for 6 months I’ll finish the year on £39,718. 

My Kindle income is increasing each month and I’m hoping that this will significantly increase my contributions in the second half of the year and help me hit the £50,000 total I’m after. In reality, I won’t be investing vast suns of my Kindle income into shares as I want to keep money to further invest into Kindle and the rest will be on stand by as I make the transition into self employment. 

Net Worth

My Net Worth includes the Freedom Fund, Company Pension, Cash Savings, and my Home Equity*. It doesn’t include valuables within the house, my car, joint accounts or any of Lou’s possessions and home equity. My Net Worth is funded solely by me.

My only liability outside of my mortgage is the Student Loan. 

*My Home equity is calculated by an estimate of our house price (reviewed monthly), minus the size of the mortgage (also reviewed monthly), and dividing my share of the home equity.

Net Worth
Freedom Fund £32,386.02
Company Pension £8,182.19
Cash Saving £3,408.72
Home Equity £21,383.88
Student Loan -£5,185.57
Net Worth £60,175.24
My 2015 Net Worth Goal is £80,000 

My Net Worth at the start of January 2015 was £52,315.10. After 6 months, it’s now increased to £60,175.24 (15% increase). 

In the minimal time I’ve been tracking my NW (7 months), my monthly average increase is £1,294.50. If I carry on with this level of increase, I’ll be on £67,942.24 at the end of December, which will put me short of my £80,000 target. 


Freedom Fund / Net Worth Tracker 

2015 Freedom Fund Net Worth
January £30,082.66 £54,815.13
February £31,265.05 £56,908.20
March £30,509.62 £57,539.95
April £32,116.30 £59,456.71
May £33,682.84 £61,685.54
June £32,386.02 £60,175.24
July
August
September
October
November
December
2015 Goals £50,000 £80,000


How was June for you? Are you on your way to hitting your goals this year?


0 Comments

  • Dividend Drive

    Reply Reply 9th July 2015

    Excellent work, Huw.

    I was recently putting together a post (unpublished as yet!) about my needs for financial independence. At the moment with my expenses at an incredibly low average for the year of £745 per month and with a portfolio yield of 4% I would need a portfolio of the size £223,500. I am a little over 10% there so far! Let's hope it keeps getting better!

    I have managed to invest over £12,000 so far this year as well which is great. But this will–necessarily–start to slow. So far though, I am still on track for my goals. Lets hope we both manage to hit them by year's end!

    Good luck!

  • Huw Davies

    Reply Reply 9th July 2015

    Hi D2,

    Thank you for stopping by and for the kind words.

    Your expenses are extremely low, congratulations! Are you living in a skip? 🙂

    I for one would love to know how to contribute towards that low average. I hope your post goes into that?!

    My plans were in line with yours last year. I wanted to build up a £250k portfolio paying 4% to cover £10k a year of expenses. My biggest limitation was my income which was approx £30k a year. My expenses were around the £830 mark, so I was saving a high percentage of my wage, but I felt I could do more if I could earn more.

    I'm going to be working part time at the start of August now (3 days a week), and then reducing it down to 2 days a week in Sept. This will allow me to take my Kindle publishing to a new level. I'm hoping my Kindle income will reach my current salary by December, but then surpass it significantly in 2016. There is a risk to what I'm doing, but one I'm willing to take. I believe I'll get to that £250k mark quicker by my new approach, but time will tell!

    I feel like I could get my expenses to around the £750 pm at a push, but I would need to make some sacrifices to get there. I'm hoping to get a bigger win from significantly increasing the income to get more disposable income to invest with. It means investing for now is on the back burner a little (2-5 months), which is a little frustrating as I love to see monthly progression, but I'm reminding myself to look at the bigger picture.

    I eagerly await the post, and wish you nothing but the best on your journey. Keep up the excellent work on your Blog, expenses and investing!

    Cheers
    Huw

  • Retire29

    Reply Reply 9th July 2015

    A 10% gain in net worth in half a year when the market is flat-to-down…I'll take that. Well done. Little ways from your 2015 goal though, any plans to step in up in the second half?

    Eric

  • Huw Davies

    Reply Reply 11th July 2015

    Thank you Eric!

    My Net Worth goal is a lower priority than my income goal through Kindle. I'm going to be transitioning to working 3 days a week (instead of 5) at work in August, and I'll go down to 2 days a week in Sept. I plan on utilising those extra 2 to 3 days a week to upscale my Kindle publishing and produce more books and therefore more income. I don't think I'll create enough to get back on track with this goal, but that's OK. I'm looking at a bigger picture of smashing the Net Worth goal in 2016, when I'm working for myself.

    It's easier to write what I'm going to do, but I'd prefer to back it up with my actions and results. Wish me luck!

    Cheers
    Huw

  • Anonymous

    Reply Reply 13th July 2015

    Hi Huw.
    I started reading your blog after Guy commented about you on his ERGuy blog. I really like the way you save and that that makes me think positive about my savings every month.
    I’m on just 30k a year after tax I just get under 23500k. But I’m try to save 90% of it.
    So far what I have done is: I’m in my early 30s have my own flat mortgage paid off. I don’t have any work place pensions or any other pensions. I do have some savings here in Scotland for rainy day.
    But big chunk of my money is saved up oversees earning me a good interest 8 to 9% a year.

    What more can I do to make more money

    Maven

  • Huw Davies

    Reply Reply 13th July 2015

    Hi Maven,

    Great to have you on board. Thanks for checking the Blog out. It's great to hear that you've got some value from it too.

    A 90% saving rate is truly outstanding! According to MMM you'll be able to retire in under 3 years at that rate! That is truly amazing well done!

    I certainly wouldn't be spending too much looking for ways to earn more money on your investment if you're making 8-9% a year. That return over 10-20 years will do wonders to your wealth.

    There are literally 1,000's of ways to make money, especially online. I'm new to Kindle Publishing, and it's transformed my life from an income standpoint. I've now handed in my notice at work, which I would never have been able to do before. You can write or get someone to write about a topic you know a lot about or are passionate about.

    I would say that area in general has the best return overall.

    Write a Blog, Book, review products, make a Youtube Channel, or coach a topic that you love and you can help other people with. If you love it, it won't seem like work, you're more likely to be 'good' at it and you'll continue to get better and better at it naturally, because you WANT to.

    What do people do that are successful in this field currently?

    What job would you love to do if money and time weren't an issue?

    Learn how someone went from zero to success in that field and emulate their path. Success leaves tracks. Follow them.

    It's all on you my friend. Go after it and get the life you want. The money will follow!

    Don't sit and wonder, take action!

    Best wishes, and let me know how you get on.
    Huw

  • Hi Huw!

    Just catching up, looks like you have some big news in there which I'll comment on the other post but just a quick question which is more relevant here I think, now that your Kindle income is getting pretty mahoosive how does that impact you tax wise?

    Like if you say "In June I earned £750" is that after tax? Do you not have to pay tax on it because Amazon have already paid tax on the amount paid or something? Or do you have to log all of that and then pay a tax bill at the end of the end as a self employed type person?

    Cheers!

  • Huw Davies

    Reply Reply 30th July 2015

    Hi TFS,

    This is currently pre-tax. I have a self assessment form and I'll be setting up a limited company over August. I have more research to do, but I'm steadily starting to understand it more each time I look into it.

    To answer your question it's the latter – I'll pay my tax at the end of the year as a limited company, and what I've earned currently as a self employed person. (all of which is to be confirmed too)

    Once I've taken the steps I'll confirm everything as others might be looking to do the same thing at some point.

    Cheers
    Huw

  • Cheers for the confirmation.
    As you know I'm looking at earning some self employed type money soon so will be following a model to you on taxes. I must remember to think that what I'm "earning" must be thought of as before tax and I won't see all of it… might take a while to get used to that!

  • Huw Davies

    Reply Reply 31st July 2015

    I was considering saving the exact amount of tax required after every payment from Amazon, which I think I'll eventually do, but at the moment I have enough cash to cover that amount.

    My goal is to spend some time next week (on holiday) setting up my company and understanding the tax implications a little more whilst I have some time during the week. I should have a better understanding of what I'm doing when we meet in York.

    Good luck with it all on your end!

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