Before I share with you our September 2022 results, as I promised in July 2021, I’ll share with you what we’ve been up to the past month. After that, we can talk about the numbers.
What have we been up to this month?
Personal life positives
Lots of family visits. I know this sounds normal and an every-month thing, but you have to remember that all our family is in Israel! Anyway, Lazy FI Mum’s mum was here between the end of August and early September. My dad also came for another day in early September. That meant we started September off with half of our kids’ grandparents.
Later that month, Lazy FI Mum’s dad came for a few days. He spent a lot of time with our kids and even took our daughter out by himself for half a day.
In case you were wondering- Yes, I took him on a mystery dine too haha. We went to a VERY posh steak place with a 3-digit budget. It was a GREAT meal.
My day out with my son
While the “Tiger who came to tea” play was still showing, my daughter, Lazy FI Mum, and her mother all went to see it (girls’ day out). In case you were wondering, this was our daughter’s third time seeing that show. She’ll go again next time it’s on.
Anyway, my son was too young for that so I got to spend 2 (and a bit) hours with him. I decided to take him to all the places where tourists take pictures and…well… take pictures of him. The result was a whole album of him sleeping with famous landmarks in the background, I loved every moment, I found it hilarious. I wish I could share with you the photo of him on a Boris bike (don’t worry, he was awake for that one).
My son loved it too. He enjoyed it (when he was awake) as he loves walks and being outside. He also seemed pretty happy when he was asleep.
In our April 2022 results, I shared with you that it was taking me a lot longer to bond with him than it did with my daughter. While our relationship grew and improved with time, I really believe that day out with him was the “missing piece of the puzzle”. We now have an amazing relationship. I love him to bits and am crazy about him.
My son started attending childcare!
This was tough for us.
Initially, we wanted him to start in November. However, we were told there were only available spaces for him to start in September or in January. We chose September (of course, otherwise this header would be very confusing).
He found it hard initially, and he still does “only” half days (8-12) but he’s now very happy there and the staff there say how much he’s improving and how happy and smiley he is.
I’m still not sure if we made the right choice but it’s done so nothing to do about it now.
October is full of Jewish holidays so childcare is closed for most of the month. In November, he’ll start staying a bit longer.
He’s growing so fast! While he still can’t properly crawl, he moves around by turning over from lying on his back to lying on his stomach and so on. He often gets stuck under the sofa, which always amuses me.
Mystery date
With our new bond, he was allowed to join me and Lazy FI Mum on a mystery-dine date. Meanwhile, my daughter was in nursery.
We went to a posh pub in Liverpool street, with a very nice budget and we had a great time. It was great to spend a couple of hours with Lazy FI Mum in the middle of the day. We don’t get to do that as much as I’d like.
My daughter has reached “that stage”
Everyone warned us about two-year-old kids (I don’t like the widespread name for that age). Anyway, we’re there. A lot of defying us and testing boundaries. While it’s hard at times and it definitely tests our patience, I’m super proud of her. She’s a really good girl and I love spending time with her.
As she knows by heart some of her books, she now “reads”. She takes a book, recognises the part based on the pictures, and “reads” to herself.
In addition, it is obvious that she’s trying so hard to be a good big sister, it’s heart-warming. She asks where her brother is all the time, she also loves lying down next to (and on top of) him.
Lazy FI Mum found a second-hand 2-kid pram online. Our kids now get to sit next to each other when we go out. If the popular saying is true, it will make him stronger :D. I’m joking, she wants to be around him all the time and it’s adorable.
One change that I’ve noticed is that she’s asking for mummy (or Imma, “mum” in Hebrew) a lot more now. For example, sometimes she’ll say “mummy put me to sleep”. That is unacceptable and I’ll work on that. That’s the main goal for October.
Personal life negatives
The photoshoot
A few months ago, I was scrolling through Groupon (consumerism at its best) and found a family photoshoot. It sounded fun so I booked it.
While we did leave there with 2 amazing photos, I don’t think we’ll do it again any time soon.
First of all, we didn’t know the photographer arrives 30 minutes after the booking time, which is meant for make-up. Lazy FI Mum doesn’t use make-up.
Then, the photographer was not the most patient person in the world (a very big understatement) so my daughter asked to go home at some point. I’m very proud of her for voicing her emotions like that.
Finally, we had to choose 2 photos out of around 140. The kids were a bit impatient (understandably) at that point.
Anyway, great photos but the experience was less than ideal. I’m sure many of you are thinking “That’s what you get for ordering a photoshoot from Groupon”. I tried, and I don’t regret it. I’ll keep trying to do fun things with my family, even if some of these things end up being less fun than I hoped.
Money related positives
I don’t think there was anything special this month. It was a very “normal” month.
Money related negatives
The only negative item I can think of is that we got overcharged for our rent. As a reminder, we bought the remainder of our shared ownership flat and we now own 100% of it (so it’s no longer shared ownership).
Apparently, the sales team and the team who deals with rent don’t communicate that well with each other. This resulted in us paying a full mortgage (for owning 100%) AND the same rent that we paid before the staircasing.
It’s not too negative as I already spoke to them and we’ll get a refund during October.
September 2022 results- savings rate
Our savings rate for September 2022 was 65.30%.
As a reminder, my long-term target is 40% with 50% being an ambitious target. However, with a new kid and maternity leave, my goal for 2022 was a third (33.33%) with 40% being the ambitious target. After this year, it will be back to 40% as the long-term goal.
The “ambitious” goal of 40% was too low apparently. We’re heading full-speed towards 50%.
As it seems we’re heading for a 2nd consecutive year with over 50% saving rate, maybe that should be our goal for 2023 too.
Our (weighted) average savings rate for the past 6 months is 58.05%.
Our 12-month-weighted average savings rate is 53.95%.
Finally, our YTD (since January) weighted average savings rate is 57.48%.
September 2022 results- What was different this month?
Every month something unusual happens. Sometimes it’s a one-off expense and sometimes it’s a one-off income. The fact that this happens every single month amuses me but also makes it harder to analyse the savings rate and draw conclusions. That’s why I also use the 6-month, 12-month, and YTD average figures to “smooth” the data.
Anyway, what was different this month?
Not too much.
In short- childcare, tutoring income, and a rent overcharge
Childcare costs
As you may remember, we contribute to our children’s tax-free childcare account once every quarter (every 3 months). Both children’s contributions are in the same month. This causes a huge fluctuation in our monthly savings rates. September 2022 was a “no childcare cost” month.
Last month, I said:
“I need to call HMRC, I really do. Instead of being surprised each time, I will just ask them: “At what date does each kid’s top-up allowance reset?”. As someone who promotes laziness, efficiency, and automation, I should have done that ages ago and set a quarterly calendar reminder (or a standing order for full automation).“
Well, I called them. I’ll write a short post (probably next week) to explain exactly how to do it so you don’t have to refresh that page every few days.
Tutoring income
While I only taught one course in September 2022, I did get paid for a course I taught back in August. It was a decent amount that definitely helped our September 2022 results.
Rent overcharge
As I mentioned above, we got overcharged for rent and we’ll get a refund in October.
While this amount did hurt our September 2022 results, I am amazed that we still achieved a 65.3% saving rate despite that! I still can’t believe this number is real.
September 2022 results- Net worth
In September 2022, our net worth decreased by 0.71%. The 0.71% is made of two parts:
- Our actual savings increased our net worth by 1.63%
- Our investments went down in value which decreased our net worth by 2.34%.
As we’re in the accumulation stage, I am not worried about the market decline. In the long term, I’m sure we’ll look back at this period as a huge opportunity (which we’re taking advantage of by staying the course and investing more each month).
Achieving FI– how far are we on our journey?
Reminder: I set our FI number (how much we need to retire) in July 2020 and update it every month for inflation (I use CPIH* index).
At the end of September 2022, our net worth is 29.70% (August 2022: 30.06%) of that number.
We are back below the 30% mark. Inflation has played a big part in that one. More on that in the next section.
Real change
The 0.36% decrease in our FI journey (as a percentage of our FI number) from 30.06% to 29.70% means a real (inflation-adjusted) decrease of 1.19% (29.70 / 30.06 – 1)**, which can be broken down into these two parts:
- Our nominal net worth decreased by 0.71% as mentioned above.
- The CPIH index increased by 0.50%, which decreased our real (inflation-adjusted) net worth**.
As you can see, 2 factors are out of our control:
- The market performance (are our investments worth more or less this month?)
- Inflation (are things more expensive than last month?)
As these factors are out of our control- I tend to focus on our savings rate. A 65.30% savings rate is absolutely phenomenal! especially with the rent overcharge.
When can we achieve FI (and possibly retire)?
As I told you in the October 2021 results, calculating an FI date is not relevant for us anymore. We will move back to Israel sometime between December 2025 and August 2026. As my models are split into tax years, that means April 2026 is our relevant date.
Once we move back to Israel, I will either move to “just” teaching (no accounting) or try and keep my current job but part-time.
If anyone’s wondering if moving to Israel will help or hurt our FI journey, I present to you this article:
Tel Aviv named as world’s most expensive city to live in – BBC News.
No need to click the link, the title gives it away. Good luck to us.
In any case, we will not reach our full FI number by the time we move to Israel. Therefore, the only relevant question is…
How far into our journey to FI will we be by April 2026?
Based on my “regular” (which is more like a worst-case) scenario, we expect to be 47.97% FI by April 2026. We are getting further from the 50%. I think it’s going to be very close to that benchmark in the end.
As a reminder, this number is based on our UK level of expenses. I don’t know how expensive Israel will be. We’ll need to track our expenses for a few months there to get a better understanding. Also, I will have to learn all the little local tricks (like I learned in the UK) on how to save money, get free stuff, and reduce my tax bill.
The April 2026 model assumptions
My model assumes that only our ISAs, LISAs and pensions (essentially, our stock/equity investments) will generate an annual real return of 4%. Meanwhile, I assume our real estate and cash will retain their real value but not increase.
In addition, I assume no future income from teaching as I can’t reliably forecast how much I’ll earn from this side hustle. That means any future income from teaching will be treated as a pleasant surprise.
Another future income I ignore is my job’s annual bonus. Just like teaching, any future bonus is not guaranteed. That means that if my employer has a bad year, the bonus can potentially be 0%. My model assumes every year (from 2023 onwards) is such a year. Again, any bonus that does come through will be treated as a pleasant surprise.
I know these assumptions are very prudent but I prefer being prudent and positively surprised to “realistic” and having to deal with unforeseen issues.
Well, that’s our September 2022 results, have a great weekend everyone!
Notes
*CPIH- “Consumer Price Inflation including owner-occupiers’ Housing costs”. As we are consumers and we own our home- I think this is the best inflation metric for us. You can see the changes in the index here.
** You might get a slightly different number (by 0.01%,). That’s due to rounding. The numbers I share are the accurate ones, the equations are so that you understand the way I calculate the numbers.
