I’m still making my way through the 2023 monthly results so here are February 2023 results. I’m aware we’re already in July 2023 but I had a few months without posting on this blog. If you want to know why, click here.
Before I share with you our February 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?
February 2023 was a very busy month for the Lazy FI Family, 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 February. I used Google Maps’ timeline, Google Photos, old WhatsApp messages, and our expenses to remember what happened in February 2023. I feel like Lazy FI Detective.
Visitors from Israel
February 2023 was all about Lazy FI Mum from the visitors’ side of things. Both her mum and her best friend came over! She also used that to see 4 (!) shows in one month. I’m very happy for her, especially as one of those shows was with me.
Lazy FI Mum’s mum
First, Lazy FI Mum’s mum came over. Luckily, the neighbours who live one floor above us went abroad and let her stay there, all I had to do in return was feed their rabbit. I love a good deal. I’m joking of course, our neighbours are just great people and their kids are our kids’ best friends. Their kids come over to play almost every day (unless my kids go to them).
Anyway, back to the shows… Lazy FI Mum and her mum went to see the Abba show and had a great time, they came back very excited. The next day, Lazy FI Mum and I went to see the Lehman Trilogy, which I’d been wanting to see for ages. We actually had tickets for May, but when we knew Grandma was here to look after the kids, I called to change the tickets. Funny enough, they only had more expensive seats so I had to add an amount equivalent to the amount I initially paid. However, we had great seats and really enjoyed it. And again, before you worry, our savings rate was still positive.
In addition to adult shows, we also went to Kidaznia (my kids were too young for it), a day out in Winchester, and a mystery dine with my mother-in-law.
Lazy FI Mum’s best friend
After her mum left, Lazy FI Mum’s best friend came over. She slept on our sofa. We have guests stay with us and sleep on our sofa quite often but I think she was the first pregnant guest we had. That did not stop them from going out to 2 different shows (well-done girls!), They went to see Matilda and “& Juliet”. I think they like “& Juliet” a lot more but I’ll let Lazy FI Mum read this before I post, just to confirm.
Update: Yeap, “& Juliet” was much better.
Wembley
February 2023 will always be remembered as the coolest mystery dine to date. I got to go to Wembley Stadium with a friend, who’s also a mystery diner (he reached FI by the way) to see my favourite team (GGMU) win the Carabao Cup. Besides the free football tickets, we also got £100 to spend on food there, not a bad day out!
I was a bit worried about that visit because I had my wisdom tooth removed 4 days earlier but I was able to eat normally and enjoy the match.
London Zoo
The problem with writing a February post in July is that some questions are left unanswered. For example, why did I take my son to the Zoo 2 days in a row? I’m still not sure but we had a great time. I’m not sure how much he understood but he was still very happy. He even caught a session where you could get close to an owl and learn about it.
Trampoline park
My wife met an old colleague and took our son with her (easier). It was a great opportunity for me to do something fun with my daughter, just the two of us.
Apparently, there is a trampoline park not too far from us that has toddler hour on weekends between 9:00-10:00. My kids are up by 6:30 so that didn’t scare us. It is such a brilliant idea! little kids can run around safely and have fun. As soon as the hour ended, older kids came in and started doing flips and stuff like that, so I was very happy the young ones had their own hour. In case you were wondering, a whole hour of jumping is A LOT (way more than enough).
We had such a great time and will try and go again soon.
Lazy FI Mum’s first month without a job
This was Lazy FI Mum’s first full month without a job (numbers below, as usual). During February she was still looking for a job. She really wanted to find her new role because she loves what she does. Luckily, we’ve saved enough for her not to have to compromise.
The whole process seems so tough because in my field (accounting), it’s mainly dealing with recruiters but in her field (HR), she has to apply directly to job vacancies. She sent so many CVs, I’m very proud of her.
Personal life negatives
I mentioned my wisdom tooth removal above. 2-3 days of pain, nothing too bad.
February 2023 results- savings rate
Our savings rate for February 2023 was 2.23%.
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 45.72%.
Our 12-month-weighted average savings rate is 51.66%.
Finally, our YTD (since January) weighted average savings rate is 54.92%.
February 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), one salary, and Excel
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. February 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 February results.
One salary
As mentioned above, this was our first month with one salary as Lazy FI Mum didn’t work during February 2023.
Excel
I had a client pay me for a course I did a couple of months earlier, which pushed us into a positive savings rate.
February 2023 results- Net worth
In February 2023, our net worth increased by 0.94%. The 0.94% is made of two parts:
- Our actual savings increased our net worth by 0.04%
- Our investments increased in value, which increased our net worth by 0.91%**.
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 February 2023, our net worth is 30.83% (January 2023: 30.42%) of that number.
We are once again above the 30% mark and set a new record, beating our July 2022 percentage of 30.47%. Woohoo!
Real change
The 0.41% increase in our FI journey (as a percentage of our FI number) from 30.42% to 30.83% means a real (inflation-adjusted) increase of 1.35% (30.83 / 30.42 – 1)**, which can be broken down into these two parts:
- Our nominal net worth increased by 0.94% as mentioned above.
- The CPIH index decreased (yes, decreased! The CPIH index* went down) by 0.40%, which increased 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.
While a 2.23% savings rate seems really low, it’s actually one of my proudest months ever. Despite topping up our kids’ tax-free childcare accounts and receiving only one salary, we still managed to save, that’s absolutely insane and I’m very proud of us for that.
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 46.79% 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 February 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.
