After posting all those consecutive monthly results posts, it was nice to write about the things before coming back to the August 2023 results. However, I do enjoy writing these as well, I like looking back at our month (both from the financial side and the personal side).
Before I share our August 2023 results with you, as 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?
As part of our August 2023 results, I’ll share (as always) personal life positives and negatives. I can’t always recall negative things which goes to show how happy I am with my life.
Personal life positives
Recalling what happened in the past month is an interesting activity. I use Google Maps’ timeline, Google Photos, WhatsApp messages, and our expenses to remember what happened.
A downside of this system, however, is that I have less visibility of stuff Lazy FI Mum did with the kids.
Lazy FI Mum’s mother’s visit
As I shared with you in our July 2023 results, Lazy FI Mum’s mother came to visit on the last day of July so most of her visit was in August. As usual, the kids loved having her here but she also saved the day.
My son’s childcare was closed for a few days so having grandma to look after him was very lucky!
Separate fun days
Lazy FI Mum had a great idea- every other Saturday, we have separate fun days. Each parent takes one child for a fun day. We alternate so every 4 weeks I have a fun day with my son and every 4 weeks I have a fun day with my daughter. That way, each child has a full day of undivided attention with one of their parents every other week.
Fun day with my son
We started with boys’ day and girls’ day.
I dressed my son in his Manchester United kid and we headed to Regents Park. We walked around, kicked a ball, and had lots of fun. Then, we went to the zoo, we love that place. After the zoo, we headed to a Mexcian restaurant (my son demolished the bean dip) and then came home for a nap, the perfect finish for the day.
Fun day with my daughter
Two weeks later, I took my daughter to a fun day. We started our day with a babyccino with sprinkles at one of EL&N’s branches (my daughter’s favourite colour is pink).
Then, we went to the Theatre to watch The Tiger Who Came to Tea. Lazy FI Mum dressed her in her Tiger Who Came to Tea shirt and even put on an orange clip/box).
I think it’s the fifth time she’s been to that show, She still enjoyed it but differently, it was interesting to watch. As she’s now a little bit older, she shouted back when they asked questions and participated a lot more.
Then, we headed to McDonald’s for her first-ever Happy Meal. She loves chips but never tried McDonald’s chicken nuggets so she tried those. A happy meal comes with 4 nuggets but that wasn’t enough so we ordered more. She ended up eating 8 nuggets, that’s my girl!
After that, we headed home. It seems that I take them to fun half-days, I need to work on that.
My daughter’s new Manchester United kit
After seeing my son and I wear Manchester United shirts, she asked for a “Manchester United shirt my size”. I couldn’t say no, I couldn’t let her feel left out so I ordered her a kit as well. It will probably mean I’ll retire one day later.
When it arrived, she was so excited! It came with a shirt, short trousers and even socks. She put it on straight away and wore it for the whole day, she was very happy.
My brother’s new flat
My brother and his wife moved to the UK last month. They were initially staying with my uncle but now, they found their own flat.
We went to visit them on the same day as the Women’s World Cup final. I was hoping my daughter would be interested but that was not the case (we’ll try again in the future).
Anyway, they have a beautiful flat (top floor, no lift, god help me) with windows in the ceiling.
More importantly, they live pretty close to us, less than half an hour door-to-door so we can see them regularly.
Oh, and my brother is already a mystery diner, in case you were wondering.
My son managed to spin a dreidel
My son is obsessed with dreidels. He loves me spinning them for him, he also loves to spin other things and shout “Dreidel!”. Just before August ended, he managed to spin a dreidel, twice!
I’m amazed by his fine motor skills, to be able to achieve that. I’m very proud of him.
Personal life negatives
Nothing that I can remember. The only “negative” thing was that my son had no childcare for a few days but as I said, Lazy FI Mum’s mother was here.
August 2023 results- savings rate
Our savings rate for August 2023 was 39.36%.
As a reminder, our long-term target is 50%, and I hope to hit that target for 3 years in a row.
Our (weighted) average savings rate for the past 6 months is 50.22%.
Our 12-month-weighted average savings rate is 48.13%.
Finally, our YTD (since January) weighted average savings rate is 51.28%.
August 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), Excel, National insurance, and holiday
Childcare costs
As you may remember, we usually 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. August was a “childcare cost” month.
Of course, that payment affected our August 2023 results.
However, with my daughter graduating from her nursery and being eligible for 30 hours free childcare, I think it’s the last time I max both of their accounts in one month, Hurray!
Excel
After a while, I had some clients pay me for courses I taught in the past few months. The income was quite significant and helped compensate for the childcare costs and improve our August 2023 results.
National insurance
Lazy FI Mum had some gaps in her National Insurance record.
The way state pension works here is the amount you’ll get depends on how many years of contributions you have. It’s roughly 35 years of contributions for the full state pension and 10 years is the minimum.
That means that if you’ve made 9 years of contributions, you will get nothing. However, if you contribute for 10 years you will get 10 / 35= 28.6% of the full state pension.
The gaps in Lazy FI Mum’s National Insurance record meant that by the time we plan to move back to Israel, she would have less than 10 years. By “buying” those years, she will now have 10 years by the time we move back, so it’s a great deal for us.
It is important to note that we can (if we want to) continue to “buy” years after we move to Israel. We’ll consider that but it was important to me to get her over the 10-year threshold.
Anyway, that was quite a big expense but 100% worth it.
Holiday
Although we didn’t take any holiday we had 2 types of holiday costs in August 2023:
- The credit card charge from Lazy FI Mum’s holiday with our daughter in Israel back in July
- Prepaying for activities for our upcoming Center Parcs holiday
August 2023 results- Net worth
In August 2023, our net worth increased by 1.36%. The 1.36% is made of two parts:
- Our actual savings increased our net worth by 1.24%
- Our investments increased in value, which increased our net worth by 0.13%**.
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 I update it every month for inflation (I use CPIH* index).
As of the end of August 2023, our net worth is 33.96% (July 2023: 33.40%) of that number.
We set a new record for the seventh(!) month straight, beating our previous all-time-high 33.40% (July 2023). Woohoo!
Obviously, the market can crash at any moment (which would be a great buying opportunity) and we would have no control over that. Until that happens, it’s cool to see our real net worth go up.
Real change
The 0.56% increase in our FI journey (as a percentage of our FI number) from 33.40% to 33.96% means a real (inflation-adjusted) increase of 1.68% (33.96 / 33.40 – 1)**, which can be broken down into these two parts:
- Our nominal net worth increased by 1.36% as mentioned above.
- The CPIH index decreased by 0.31%, 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.
A 33.96% savings rate in a “childcare” month is fantastic. I’m very happy with that.
Also, I’m still hoping to hit 55% this year and our YTD rate of 51.28% looks good!
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 July 2026?
Based on my “regular” (which is more like a worst-case) scenario, we expect to be 46.57% FI by April 2026. We are still close enough to the 50% mark to make it happen. 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 for us. 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 August 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.
