{"id":159812,"date":"2025-03-27T14:11:01","date_gmt":"2025-03-27T14:11:01","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/human-being-and-a-2019-q3-review\/"},"modified":"2025-03-27T14:11:01","modified_gmt":"2025-03-27T14:11:01","slug":"human-being-and-a-2019-q3-review","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=159812","title":{"rendered":"Human being and a 2019 Q3 review"},"content":{"rendered":"


\n<\/p>\n

\n\"Bottle<\/a>At the end of June<\/a>\u00a0I concluded that a potentially positive step forward on my FIRE journey was to focus on being a \u2018human being\u2019 rather than a \u2018human doing\u2019 for a while.\u00a0 No action plans, no agendas, no need to be busy…\u00a0 During this time I woke when my body was ready, enjoyed a non-time limited breakfast, took advantage of the British summer by spending as much time outdoors exercising as possible, read and even just spent time reflecting.\u00a0 No contribution was made to the world but at the same time nobody was harmed in the making of this drama.\u00a0 I just was.\u00a0 At the start I admit it was incredibly difficult but amazingly as time went on my body and mind really started to accept what was happening and even change for the better.\u00a0 Importantly I\u2019ve also now started to hear and see things about the world I\u2019ve never really noticed before.\u00a0 In a good way.<\/p>\n

As summer then started to fade bags were packed and time was spent in a far flung land.\u00a0 It sounds so easy and not so different from what many do in the summer, which is take a summer holiday, but this time it was different as it was for a month which not that long ago it would have been impossible for me to do given my job.\u00a0 Time was spent with some long lost potentially meaningful friends and family which was surreal, educational and importantly thoroughly enjoyable.\u00a0 At one end of the spectrum an old friend had cried enough and is in the process of rapidly downshifting his life.\u00a0 He\u2019s already sold his mortgaged detached home and bought a townhouse, got rid of the car loan and instead has gone for something 10 years old, retrained into a career that pays about a quarter of what he was earning and amongst all this I\u2019ve never seen anyone more happy and positive.<\/p>\n

At the other end of the spectrum time was spent with a family member who is frantically trying to climb the greasy career pole and doing everything a good consumerist should be doing.\u00a0 He has the massive mortgage, 2 smart executive lease cars, every branded item you can imagine, amazingly every TV\/music streaming option I know about plus one I didn\u2019t and a willingness to drive 10 minutes out of the way for a coffee at his favourite place rather than making a fantastic one at home with his posh coffee machine<\/a>.\u00a0 Oh and to go with that his job (work?) has just been put at risk.\u00a0 I\u2019ve never seen anyone looking so haggard and tired.<\/p>\n

The parallels between the two were so surreal as to be quite disturbing and they certainly helped me further cement what\u2019s important going forwards.\u00a0 It also made me truly thankful for what I have done as that family member could so easily have been me if I hadn\u2019t pursued FIRE.<\/p>\n

Within an hour or so of that meaningful friend we have also identified a possible FIRE location where we could build ourselves a dream home so some time was spent understanding land prices and getting some building quotes.\u00a0 The good news is that we have plenty of wealth to move this idea forward.<\/p>\n

\n\"Not<\/a><\/div>\n

\nClick to enlarge, Not sure my finger would be as green as this potential neighbour<\/i><\/p>\n

<\/p>\n

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

\nClick to enlarge, But I would hope green enough to attract these (hint: may need to zoom in to see)<\/i><\/p>\n

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

\nClick to enlarge, Plenty of spaces nearby for exercise and reflection<\/i><\/p>\n

While it was all very exciting we have now learnt not to rush into things.\u00a0 We\u2019re just letting it all wash over us for a while but watch this space.<\/p>\n

As my time in FIRE progresses the financial side of things seems to be less and less important but I\u2019m not quite on auto pilot yet so let\u2019s now take a look at the numbers.<\/p>\n

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

Spending calmed down in Q3 averaging \u00a32,700 per month (now \u00a33,229 per month year to date<\/a>) with the chart below showing that the elephant in the room is still rent in our high cost of living location.\u00a0 Until we buy \/ build our dream home we probably won\u2019t better this by much but it\u2019s a cost we\u2019re prepared to take given our unwillingness to rush our next FIRE step.<\/p>\n

Measured against our FIRE plans<\/a> there is no hiding from it still being a big overspend though as that required spending to be more like \u00a32,000 per month (\u00a324,000 per annum).\u00a0 ( )\u00a0 It\u2019s in the back of my mind but given my wealth since retiring, even after spending, is currently up \u00a3100,000 there is clearly no need to rush.<\/p>\n

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

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

Spending Sensibly score: Fail<\/b>.\u00a0 It\u2019s a rent rent rent story.\u00a0 As soon as that\u2019s solved 10 months of FIRE is showing our spending will easily support our dreams.<\/p>\n

\nINVEST WISELY<\/h2>\n

2019 (05 January 2019 to 04 October 2019) investment return has been +10.2% (was +10.3% at the end of Q2) so Mr Market has neither given nor taken away in the last quarter.<\/p>\n

Investment wise the portfolio is now nearly positioned for FIRE drawdown<\/a>.\u00a0 The only exception is my cash and cash like holdings (NS&I Index Linked Savings Certificates predominantly) for a non-mortgaged home purchase and to give me a few years of cash buffer as I enter FIRE now sit at \u00a3317,000 (was \u00a3320,000 at the end of Q2 2019).\u00a0 That\u2019s now about as low as I am prepared to go on this front given our much improved knowledge of what a home will cost us within the next 12 months or so.\u00a0 Otherwise the asset allocation is now pretty much where I want it to be.<\/p>\n

Living off just the dividends remains an important part of my plan reinforced by some recent experience which I\u2019ll write about separately.\u00a0 My drawdown plan was based on spending the lesser of a \u2018safe\u2019 withdrawal rate (SWR) of 2.5%<\/a>\u00a0or 85% of the dividends received<\/a>.\u00a0 2018 total dividends were \u00a328,704 which drove a \u00a324,000 annual spending plan.\u00a0 In contrast the 2.5% SWR would have allowed \u00a330,000.\u00a0 Positively, dividends in 2019 are now shaping up to be closer to \u00a333,000 meaning under the 85% dividend rule I can now be spending closer to \u00a328,000.\u00a0 That\u2019s \u00a32,337 per month meaning we\u2019re now over spending by about 15% which still includes a that massive \u00a31,400 in monthly rent.\u00a0 That\u2019s starting to feel very good knowing we have so much margin after rent costs are removed and expected home ownership costs are added.<\/p>\n

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

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

For 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

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