Before I share with you our November 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?
Wow, November 2022 was so intense, both in our personal life and our financial life.
Personal life positives
Loads of positives (woohoo)
Our trip to Israel- general
During the first half of November, we headed to Israel for my brother’s wedding. We went for just over a week as it’s a great opportunity to meet family and friends.
Our trip to Israel- Where we stayed
We stayed in a beautiful villa (booked through Airbnb), which was divided into three. We had our own entrance, kitchen, toilets, and everything. the only thing that was shared was the garden.
It was the nicest place I’ve stayed in on holiday (including some fancy hotels we went to through mystery dining). We had a living room big enough to host 6 of my university friends and some prams with their (sleeping) kids. We also had a big jacuzzi, which we used to bathe the kids (I know, we really know how to take advantage of what we get). Finally, we had 2 bedrooms (one for us, one for the kids) and a gym!
The garden was beautiful too, with orange trees and a little fish pond.
However, the best thing about this place was the location. It was walking distance from my mum’s home, where 4 of my siblings and my uncle were staying. In addition, it was not in Tel Aviv, which is always an advantage in my eyes (Lazy FI Mum disagrees).
Our trip to Israel- The wedding
The wedding was beautiful and it was clear how excited my brother was. We had lots of fun and laughed a lot. It was great to celebrate my brother’s marriage with everyone.
For anyone who hasn’t been to an Israeli wedding, I’ll try to explain it. First, there’s the reception, usually outdoors. You have an open bar and a few food stations (I love those). Then, there’s the ceremony (which isn’t that long). The ceremony is usually outdoors as well.
After the ceremony, you go inside for dinner and dancing. However, the dancing is a full-on party, with a DJ playing music and people on the dancefloor until at least 1-2 am. I love Israeli weddings.
Anyway, I have a new sister-in-law!
Our trip to Israel- Meeting friends and family
We met a lot of friends and family during our visit to Israel. I know Lazy FI Mum really misses it (I do as well, but not as much haha), so it was great to see her recharge her social battery.
It was also great to see my daughter opens up and boost her confidence by meeting so many different people in such a short period. I saw the same effect on her last time we went to Israel, which reinforces our decision to move back in 3-4 years.
Our trip to Israel- Shawarma
I must admit I didn’t eat as much shawarma as I usually do but the most important thing is my son had his first shawarma! I mean, kind of, he can’t chew, but he now knows what it tastes like and his life will never be the same again.
Our trip to Israel- work
Based on Lazy FI Mum’s advice, I left my work laptop behind, which allowed me to focus on my holiday. Well, that’s half-true, I still took my personal laptop so I could teach Excel. I had some sessions booked because that way, Lazy FI Mum had help with our kids while I taught.
Anyway, very little work was done during our visit.
Our trip to Israel- kids
I think the biggest takeaway I got from this trip is how much I love my wife and kids. While Lazy FI Mum wanted to meet friends without our kids (her mum looked after one kid each time), I wanted to have at least one kid with me at all times. I love spending time with them, especially when I don’t have to work.
Don’t get me wrong, I completely get where Lazy FI Mum is coming from. She gets to see her friends a maximum of twice a year, of course, she wants to be able to properly talk and catch up with them. My friends and family were happy (I think) to meet me with one of the kids and I was more concerned about my kids spending time with their uncles, aunts, grandparents, great-grandparents, and their adorable cousin (who is around the age of our son).
I love spending time with my kids, especially on holidays.
My brother’s visit
My brother (not the one that just got married) came to London for a few days to run the half marathon. He actually got a crazy good result, 5:04 minutes per KM!
My kids had lots of fun with their uncle and while he stayed far from where we live, we still saw him quite a few times during his short visit.
During one of our meetings, I took my son and my brother to the Wembley Outlet for a mystery dine.
I also used the opportunity to buy some new shows, courtesy of the Black Friday offers in the Asics shop.
Personal life negatives
I’m sure there were some negative things but I can’t think of anything right now, which is a good sign I guess.
November 2022 results- savings rate
Our savings rate for November 2022 was 9.89%.
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 initially a third (33.33%) with 40% being the ambitious target. After this year, I was planning to go back to 40% as the long-term goal, with 50% being the ambitious goal. However, this year made me rethink our 2023 goal.
As we’re one month away, I can almost certainly say that we absolutely smashed it this year! As it seems, we’re almost certainly heading towards a 2nd consecutive year with over 50% saving rate, I think that should be our goal for 2023 too—no additional “ambitious” goal for 2023, just 50%, binary.
Our (weighted) average savings rate for the past 6 months is 54.14%.
Our 12-month-weighted average savings rate is 54.70%.
Finally, our YTD (since January) weighted average savings rate is 53.78%.
November 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 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?
In short- childcare, side hustles, holiday, health, miscellaneous, and a rent overcharge refund
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. November 2022 was a “childcare cost” month.
Any “childcare cost” month looks worse than it really is so you should have that in the back of your mind while going through our November 2022 results.
I finally got paid by my main client for a few months’ worths of Excel training, which really improved our November 2022 results.
As I mentioned in the “personal life positives” section, we went to Israel. Once again, a big part of this holiday’s costs was prepaid, as we paid for the flights back in May 2022.
Funny enough, as I don’t track our Israeli credit cards line-by-line (only the English ones), most of our spending in Israel will be included as expenses in our December 2022 results.
Both Lazy FI and I have back problems. That’s why we have Osteopathy treatments at home, mainly through Urban (if you want a referral code, leave a comment and I’ll email you one). Anyway, when I saw there was 20% cashback via American express on one purchase, I called Amex straight away to ask if this applies to gift cards, they said “yes”, so I think we’re good for most of 2023 haha. I got a gift card and so did Lazy FI Mum.
Miscellaneous for November 2022 includes two items.
First, I renewed my professional subscription (which allows me to continue to work). While my employer will reimburse me for this cost in the future, this didn’t happen in November so that’s a cost.
Second, I renewed my Israeli driving license. This one made me laugh. Usually, when you renew a passport, it expires after 10 years. I assumed it would be the same for my driving license. I was wrong, I now have a valid Israeli driving license that expires on my… wait for it.. 70th birthday! LOL.
As I mentioned above, we got overcharged for rent. We finally got refunded, which reduced our housing costs.
November 2022 results- Net worth
In November 2022, our net worth decreased by 0.72%. The 0.72% is made of two parts:
- Our actual savings increased our net worth by 0.22%
- Our investments decreased in value, which decreased our net worth by 0.94%**.
When the market goes down, our net worth naturally goes down with it, which feels like a bad thing. However, that’s only psychological because we’re in the accumulation stage. That means we’re buying and not selling, so market drops are actually better for us in this stage of our journey.
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 November 2022, our net worth is 29.56% (October 2022: 30.26%) of that number.
We are once again below the 30% mark and are on a very similar percentage to the one we had a year ago.
The 0.70% decrease in our FI journey (as a percentage of our FI number) from 30.26% to 29.56% means a real (inflation-adjusted) decrease of 2.31% (29.56 / 30.26 – 1)**, which can be broken down into these two parts:
- Our nominal net worth decreased by 0.72% as mentioned above.
- The CPIH index increased by 1.64%, 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 9.89% savings rate is not great. However, if I look at YTD and the fact that some expenses (like the Urban gift card) are prepaid for 2023, I’m pretty happy.
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 46.88% FI by April 2026. We are getting a further 50% mark. However, I still 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 November 2022 results, have a great weekend everyone!
*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.
Assets aside, sounds like you had a great month!
Being outside (voluntarily and enjoyably) at this time of year seems a totally amazing experience!
I agree 100%! We’re really enjoying the journey the FI, with lots of family time. I find it hard going a day without leaving our home.
Also, I love writing the “personal life” part of the monthly results-it makes me go over Google Photos and remember all the fun moments we had in that month 🙂
Reading your blog postings was fun. We thought of asking you as we have a similar idea to yours and you may know about the international pension withdrawal.
Our home is in London.Our intention is to retire abroad as well (outside the EU). I want to use my pension contribution to the fullest ( around 40k). However, I have been delaying raising my pension contribution as I have the following questions.
I do not desire to utilise QROPS. I want to preserve my pension in the UK. How can we withdraw the pension abroad(outside of EU)
1. I am aware that if we leave the pension pool in the UK, we can withdraw it abroad. However, most pension providers do not have any documents/links if they can pay straight to the overseas account. Are you aware if any pension provider can pay directly to overseas account
2. How can we maintain the bank account if the pension provider only pays to UK accounts? I’ve heard that if we move abroad, UK banks close the account.
What are your plans for pension withdrawal? Thanks and Happy New year !
Thank you for your kind words and happy new year to you, too!
As I was reading your comment, my first thought was “maybe QROPS will work” but then I saw you don’t want that (me neither, to be honest).
I will (rudely) ignore your first question because I think my answer to your second one may solve it:
I just called my bank and asked them after how long they close my account, the representative said that they normally close the account after 3 years of no activity.
So, how can we solve this?
Here are a few ideas (this is just my understanding, please confirm with your bank):
1. Have a direct debit. I will still need my UK phone number so will have a direct debit for my sim, a lot of phones nowadays are dual-sim so I’ll walk around with my UK sim and my Israeli one. If you have another direct debit you need, problem solved.
Another idea for a direct debit could be your Vanguard SIPP/ISA fees if you have them. For more information, see my post about this topic:
2. If you have more than 1 account, transfer money from one to the other and then send the money back. Do this once a year or two, this will count as an activity on both accounts.
3. Buy something cheap once every 1-2 years (I wouldn’t wait too close to the 3 years). This could be a £1 item.
As I said, these ideas are just ideas, call your bank and confirm.
Our plan, just like yours, is to keep the UK account active and get our pension to the UK account (we can then send it to Israel whenever we want). I hope this is helpful!
Thank you very much for taking your time to respond. I wish the private pension providers supports abroad withdrawal just like state pension.
I am glad that you have also similar plan to us 🙂
I’m not sure I prefer them to pay it to my overseas (outside UK) account.
I try to optimize things and I think (I must admit I didn’t give this one too much thought) that I prefer transferring money whenever I actually need it and then maybe save a bit on transfer and conversion commissions by transferring, for example, every quarter, instead of every month.