I know it’s a bit late for January 2023 results as we’re already in June 2023. I haven’t posted for a while so trying to catch up 🙂 If you want to know why I haven’t been posting for a while, click here.
Before I share with you our January 2023 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?
There’s so much to share for January 2023, both in our personal life and financial life. Let’s start.
Personal life positives
This has been an interesting activity because it’s been so long since January. I used Google Maps’ timeline, Google Photos, old WhatsApp messages, and our expenses to remember what happened in January 2023. I feel like Lazy FI Detective.
Lots of soft plays
Looking back at January 2023, I see lots of soft play sessions. We went to our local one but also tried 2 new ones.
While my daughter ran around and released all her energy, my son stayed with one of us at the little ball pit 🙂
My first formal date with my daughter- Bearhunt
My daughter loves The Tiger who came to Tea, she’s seen the movie countless times and she’s been to the Musical at least 3 times!
She also loves Winnie the Pooh, we read the books, saw all the movies, and took her to the Musical twice now (Written on June 2023).
That means that in her mind, every film that has a book also has a show. When I found the “We’re going on a bear hunt” film, she asked, “Can we go to the Bear hunt show?”. Initially, I laughed, because I understood how she got to that question. Then, I check on Google to see if there’s a show. I was very surprised to find out there WAS a show, not too far from us, a week later!
I booked tickets and she was very excited. We dressed up nicely. I wore a suit, she wore a dress (she was beautiful) and we went on our date. We had lots of fun and I even bought her a bear puppet at the theatre shop. She still reminds me of how all the kids looked through the puppets to try and find a bear but only Abba (“Dad” in Hebrew) found Bearhunt (one word, that’s what he’s called).
I love taking her to shows, we always have a great time.
My son stopped breastfeeding
Looking at old WhatsApp messages, by the end of January 2023 he had 2 consecutive nights without breastfeeding! By that stage, he was only breastfeeding at night.
Even though it’s been a few months, I feel all proud again, well done baby!
Lazy FI Mum leaves her job
Although she handed in her resignation a few months prior to January 2023 (as mentioned here), her last day was during that month. Definitely a positive as she took her fate into her own hands and I’m very proud of her. I’ll share some updates in the next few monthly results.
Personal life negatives
I think we had some illnesses but it’s been so long that I can’t remember. I also mainly remember the “positives” so this section is not applicable for January 2023.
January 2023 results- savings rate
Our savings rate for January 2023 was 80.22%.
As a reminder, my long-term target is 50%, hoping to hit that target for 3 years in a row.
Our (weighted) average savings rate for the past 6 months is 48.81%.
Our 12-month-weighted average savings rate is 55.05%.
Finally, our YTD (since January) weighted average savings rate is 80.22%.
Of course, as it’s the January results, the January 2023 savings rate and the YTD (since January) weighted average savings rate are the same thing.
January 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 (as usual), gifts, family, and health
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. January was a “no childcare cost” month.
Any “no childcare cost” month looks better than it really is so you should have that in the back of your mind while going through our January results.
Gifts
While I still don’t like receiving gifts, we did get a significant monetary gift from a family member that increased our income and improved our January 2023 results.
Family
While we had no family visits in January 2023, there were still related expenses.
We had 2 main expenses paid in advance for February 2023, when Lazy FI Mum’s mother visited.
The first one was tickets for the Abba (the band, not “Dad” in Hebrew) Voyage show for Lazy FI Mum and her mother. The second one was an upgrade to a Valentine’s show (pure luck, didn’t plan that date) to see the Lehman Trilogy. I originally booked 2 tickets for May 2023 but when Lazy FI Mum’s mother booked her flight, she was nominated as a babysitter for one night so we could go out. The only tickets available during her visit were on Valentine’s and they were much better seats so the expense in January 2023 is the upgrade.
Health
The insurance paid us back for some medical expenses, mainly my son’s skin problem treatments. The amount we got back was higher than our monthly premium. That means that in January 2023 results, “Health” is a negative expense.
January 2023 results- Net worth
In January 2023, our net worth increased by 4.82%. The 4.82% is made of two parts:
- Our actual savings increased our net worth by 2.89%
- Our investments increased in value, which increased our net worth by 1.93%**.
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 January 2023, our net worth is 30.42% (December 2022: 29.14%) of that number.
We are once again above the 30% mark and are just below our all-time-high 30.47% (July 2022).
Real change
The 1.28% increase in our FI journey (as a percentage of our FI number) from 29.14% to 30.42% means a real (inflation-adjusted) increase of 4.40% (30.42 / 29.14 – 1)**, which can be broken down into these two parts:
- Our nominal net worth increased by 4.82% as mentioned above.
- The CPIH index increased by 0.40%, 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. An 80.22% savings rate is amazing, even “no childcare cost” month.
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 46.72% FI by April 2026. We are getting a little closer to the 50% mark. 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 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 January 2023 results, have a great week 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% or so). 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.
