Personal finance

2021 Q3 – Financial independence update

At the start of each year, I pick on particular focus area to make improvements on and optimise. It’s like an new year’s resolution, except I get the whole year to make progress.

2020 was my year to focus on my personal finances, and although it’s not my primary focus now, it doesn’t mean that the goals and habits I set up back then have fallen by the wayside. I’ve been using monthly updates to help track my 2021 health and wellbeing, and decided to do quarterly updates to help keep my finances on track.

My financial goal relates to achieving financial independence, where investments in the stock market enable me to live off a 4% annual withdrawal rate. I’ve calculated to achieve this in a reasonable timeframe, without living off two-minute noodles, I’ll need to put in $36k per year, or $9k per quarter. The target isn’t the maximum I could put it, as it’s always a balance between money earnt, money spent and having enough to actually live an enjoyable, valued lifestyle.

This first quarter is a bit of a baseline, starting from what I’d put aside over the past couple of years with no target for savings yet.

Money earnt – My income increased a little this quarter as I earnt a temporary promotion.

Money saved – I didn’t invest any money this past quarter, as I’ve been focusing on paying off my student loan and re-establishing my emergency fund.

Lifestyle – Covid restrictions are making it difficult to spend any money on travel, but I have managed to treat myself to some good food, and my spending as part of my 2021 health and wellbeing focus has intentionally increased.

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