Thursday 31 December 2020

The stock portfolio development 2020


As of this autumn I have started to shift my target for reaching financial independence. Everything I read about people that have made an early retirement shows that they have continued to create revenue from other sources than the daily job that they left and I do not see how this would be any different for me. I've therefore negotiated with my family about living in the basement of our mortgage free "summerhouse" and to then take over all maintenance costs etc of said property. Today the house is probably empty at least 45 weeks per year and I find that very sad because it is a lovely little wooden cabin close to the sea.

So what does this mean in terms of money? Based on my calculations it will cost me around 1,000 € per month to live a fully acceptable life there. I will not get access to my company pension until I reach the age of 57 years which means that the private stock portfolio that I currently have (~110k) must keep me going for 13 years until I can start nibbling on the private company pension. I currently invest ~2k per month which means that in 2 years time excluding dividends and any stock market increases or losses I should have ~158k € which gives me those 13 years. In the meantime also here excluding any dividends and stock market gains or losses my private company pension should have increased to ~220k and will continue to do so based on re-invested dividends and stock market increases for another 13 years. This I can, according to current regulations, take out 1/4 of the entire portfolio tax free and then ~12k GBP per year tax free once the age of 57 has been reached. According to my calculations this should keep me running until the age of 85 excluding any other incomes. I have no wife and no kids to leave something for so is there a reason for a large heap of money? Whatever is left will go to my nephews and I am certain that there will be money left.

So my target has shifted from ~750k to ~350k which means retirement should be possible within the next two years.

For the previous please visit the stock portfolio development 2017.

As can be seen in the graph above my plan is working well. In my first year (2012) of investment I ended up with a stock portfolio in the value of 17,659 € which was 4,744 € more then my plan required. In the second year (2013) my stock portfolio grew with 73 % and ended up with a value of 30,623 € which was 4,723 € above my target meaning that I managed to stay ahead of my plan but I did not manage to increase this advantage. In the third year (2014) my stock portfolio grew with 57% and I ended up with a value of 48,208 € which is then 8,333 € ahead of my investment plan which means that I managed to double my advantage during 2014. In the fourth year (2015) my portfolio grew by 53% and I am up at a value of 73,579 €. My plan was to have a stock portfolio of 54,915 € in the end of 2015 which means that I am now 18,664 € ahead of my plan. During my fifth year (2016) which was horrible in terms of new investments my portfolio still grew by 20% and the value was up at 88,414 € which mean that I was still 17,312 € ahead of my plan. In the sixth year (2017) the portfolio grew by 24% with a value of 109,606 € which was 21,802 € ahead of my plan. Followed by my seventh year of investing (2018) and an estimated growth of 19% and a value of ~130,000 which kept me 22,726 € ahead of my plan (hit by divorce). To then in my eighth year of investing (2019) with a growth of 24% with a stock portfolio value of 160,669 € and me being 33,216 € ahead of the plan (still hit by divorce). This then leaves us the ninth year of investing (2020) and a growth of 52% and a stock portfolio at 243,801 € and me being 94,629 € ahead of the plan.

Due to the finalisation of the divorce I have once again managed to push hard in my investments and I am currently investing more than 5k € each month which is one of the reasons for why the portfolio has been doing so well this year and the second is due to the benefit of the private company pension scheme.

Conclusion: My stock portfolio has been strongly boosted by the finalisation of my divorce which once again has provided me with the opportunity to push in money into the stock market. I've also re-addressed my original plan and have found that I can get away with much less in comparison to what I originally thought considering that there is no need for leaving a large heap of money behind me which significantly opens up possibilities for me.


Onevikinggirl said...

Great preparations for 2024, congratulations to your forthcoming FIRE and ERE! :)

Fredrik von Oberhausen said...

Thank you! It starts to look very good indeed!