{"id":111514,"date":"2025-02-26T16:21:53","date_gmt":"2025-02-26T16:21:53","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/insanity-and-2019-in-review\/"},"modified":"2025-02-26T16:21:53","modified_gmt":"2025-02-26T16:21:53","slug":"insanity-and-2019-in-review","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=111514","title":{"rendered":"Insanity and 2019 in review"},"content":{"rendered":"


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\n\u201cInsanity is doing the same thing over and over and expecting different results\u201d \u2013 not Albert Einstein as I always thought but actually Rita Mae Brown<\/a>\u00a0<\/p><\/blockquote>\n

2019 represented my first full year of FIRE, albeit with a slip-up back to FI during the year<\/a>, which was then later corrected.\u00a0 Despite a lot of my pre-FIRE posts being financial in nature finances actually occupied very little of my mind through 2019.\u00a0 Having my wealth increase by \u00a3148,000 and my spending, albeit profligate, significantly less than this certainly helped here.<\/p>\n

What did occupy a lot of my mind, as regular readers will be well aware, was the psychological, emotive and decompression elements of FIRE.\u00a0 So let\u2019s start here first and take a snap shot of where I find myself.<\/p>\n

Nearly 14 months into my decompression I would have to say that while the days are getting easier I am still very much deep in the decompression mud.\u00a0 There are still many unanswered questions and much soul searching (or is that naval gazing) going on.\u00a0 To help with that I\u2019ve tried to continue with the human being while changing only one thing at a time theme<\/a> I started mid-year.\u00a0 One conclusion I\u2019ve come to, and started to accept, is that it\u2019s unlikely that I have a \u201csilver bullet\u201d single purpose<\/a> in me and I\u2019m really ok with that.\u00a0 My purpose doesn\u2019t have to occupy 60 hours per week, like my previous job, so why I was thinking that is beyond me.\u00a0 Instead I\u2019m starting to take great joy in many small \u201csuccesses\u201d that without FIRE I wouldn\u2019t have been able to do.\u00a0 That extra 3 miles of hiking into the forest, seeing something new, because I have the time…\u00a0 That 3 hour lunch with a loved one that builds a stronger bond because I have the time…<\/p>\n

The one change I have made is that an old friend asked me to help with a very short term very temporary job.\u00a0 I never expected it to be purposeful (so it\u2019s a job and not work) but I did think it would be interesting so took it on.\u00a0 I just hope that is helping with my decompression and not clouding it.<\/p>\n

Where we are struggling is with our current location in the South East of England, which is pretty much the same location as pre-FIRE.\u00a0 Having experienced a coastal Mediterranean lifestyle<\/a>\u00a0we are now finding our location difficult.\u00a0 The weather, despite having experienced the coldest and wettest winters Cyprus had ever seen in late 2018, is terrible which doesn\u2019t help.\u00a0 On top of that we are also struggling with the busyness along with the constant noise that comes with that.\u00a0 We also now find the people very individualistic (possibly coming from being time poor) which then brings a certain level of coldness with it.\u00a0 In the last quarter we\u2019ve also had a meaningful friend emigrate for pastures new \u2013 thanks Brexit!\u00a0 I\u2019m not sure they\u2019re the type of person the UK actually wanted to lose but that\u2019s for another day as Monevator<\/a>\u00a0does a much better Brexit rant than me…<\/p>\n

With that in mind Mrs RIT and I are starting to conclude that this is not a place we want to call our FIRE home.\u00a0 Now we\u2019re not insane, so are not going to pack up and leave again quickly, but what we have done is applied for the visa we\u2019ll need to relocate to the country hinted at in a few previous posts.\u00a0 It would give us similar weather to Cyprus, access to some meaningful friends\/family and we think lifestyle wise fall somewhere between Cyprus and the UK.\u00a0 The reason we\u2019ve applied now is that the approval process can take many months, even years, so it would be useful to have that in hand when we make our final conclusion rather than to then have to impatiently wait.\u00a0 The only downsides were it took a long time to provide what was required (that\u2019s ok, I have time) and cost many thousands of pounds (that\u2019s ok, I have money and this just might be something we\u2019ll value greatly).<\/p>\n

On the subject of money let\u2019s now take a brief look at how 2019 played out.<\/p>\n

\nSPEND SENSIBLY <\/span><\/h2>\n

Spending in 2019 probably could be described as insane at a huge \u00a345,500.\u00a0 Although, if I net the move costs to and from Cyprus plus the visa mentioned above from that total spending falls to the mid-\u00a320k\u2019s.\u00a0 Better but not an excuse.\u00a0 Of that spending I \u2018only\u2019 had to drawdown \u00a328,700 from my wealth with the remainder being covered by the jobs mentioned.<\/p>\n

Measured against my planned 2019 drawdown of \u00a325,872<\/a>\u00a0it\u2019s still a small blow out although not something to start panicking about as \u00a328,700 represents 89% of the dividends received over 2019 and 2.0% of my wealth at year end.<\/p>\n

\n\"RIT<\/a><\/div>\n

\nClick to enlarge, RIT Spending\u00a0<\/i><\/p>\n

\nSpending Sensibly score: Fail<\/b>.\u00a0 Trying to figure out where in the world we want to live and renting while we do it is expensive!<\/p>\n

\nINVEST WISELY<\/h2>\n

Some of the great bloggers I follow have already posted some pretty impressive returns for 2019.\u00a0 FvL<\/a>\u00a0started us off with an impressive 2019 annual return of 22.7%!\u00a0 John over at diy investor<\/a>\u00a0then weighed in with 21.9%.\u00a0 Then finally The Accumulator revealed the Slow and Steady passive portfolio\u2019s<\/a> more humble 16.3%.<\/p>\n

In comparison I managed a derisory 13.8% (05 January 2019 to 04 January 2019).\u00a0 At the headline level it warranted a recheck of the numbers and a deeper look as that is a lot of underperformance.\u00a0 FvL runs a bit of leverage, has active elements (angel investing for example) and frankly is a much better investor than I\u2019ll ever be so I always expect to see him(?) outperform me.\u00a0 We used to always compare ourselves as we had similar strategies but John in recent times has now moved his portfolio to one that is 100% environmentally conscious.\u00a0 I 100% applaud why he\u2019s done this but it\u2019s not something I am yet prepared to do as I want the broadest diversification I can get.\u00a0 I\u2019m therefore also not surprised to see John diverge (in either direction) from me.\u00a0 The one I was surprised about was the Slow and Steady passive portfolio as that\u2019s a very similar strategy to what I\u2019m all about.<\/p>\n

In the end it is easily explained if I split my wealth into two.\u00a0 The first piece is the portfolio of equities, bonds, gilts, REIT\u2019s, gold and cash that funds my FIRE<\/a>.\u00a0 Crunching the numbers and that portion returned 17.0% which is close to the Slow and Steady passive portfolio.\u00a0 The second piece is the portfolio of cash, P2P and Index Linked Savings Certificates that will fund my eventual home purchase.\u00a0 That returned 2.0%.\u00a0 In comparison home prices in our new most likely FIRE location increased 0.6% over 2019.\u00a0 That now relaxes me somewhat.\u00a0 My passive diversified by asset type and country portfolio is on par with a \u2018similar\u2019 passive portfolio and my home purchase fund has kept pace with house prices.<\/p>\n

Living off just the dividends remains an important part of my overall FIRE plan.\u00a0 2018 total dividends were \u00a328,693.\u00a0 In comparison 2019 ended up at \u00a332,398 which is a healthy 12.9% increase.<\/p>\n

\n\"RIT<\/a><\/div>\n

\nClick to enlarge, RIT Annual Dividends<\/i><\/p>\n

\nFor completeness this is what my asset allocation looks like today.<\/p>\n

\n\"Current<\/a><\/div>\n

\nClick to enlarge, Current RIT Asset Allocations<\/i><\/p>\n

I continue to invest as tax efficiently as possible with my tax efficient holdings from a UK perspective now consisting of:<\/p>\n