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Monthly expense report: February

March 3, 2018 / FFsloth / 8 Comments

A short month which unfortunately didn’t translate in low expenses.

Income: 2 180 euro

Expenses: 1 671,60 euro

Savings: 508,40 euro

No more gifts this month so back down to the normal income of the job. As predicted last month I now ‘earn’ about 50 euro more per month thanks to the tax reform that took effect.

Expenses were 1 670 euro or 170 euro above the goal of 1 500 euro. But as also mentionned last month one of my hard drives failed in my Synology NAS. Replacement cost was 200 euro. Without this I would have reached the 1 500 euro goal.

Another goal was spending less money on unhealthy sandwiches at work. This month was a low for me at only 53 euro! This was due to february being a short month, me taking some holidays and eating the seaweed bread I mentionned last month. I did need to buy more seaweed but for 85 euro I think I got enough to cover the whole year.

I also became the godfather to a friends baby. So a 100 euro gift there. This will probably become a recurring item as, finance wise, I have big plans for the little rascal.

I did have a 50 euro pure ‘fun’ expense and we also had carnaval in my home town. It’s free to go, we have a chest full of outfits from previous years and since we usually buy in bulk we didn’t even have to buy any beer for it this year!

All in all I could see myself coming pretty close to the 1 500 euro goal this year with only two exceptions. First is: going on holiday. What we are planning would cost less than the holiday money I will receive but it would still push my budget above 1 500 euro. Second: a new PC. Knowing me, that would cost more than the holiday and kill any change I have got in coming close to my goal. Not sure what I will do there. For the moment I just keep using the old PC which is getting slower by the month (also hoping for a price drop in graphic cards, damn you crypto mining fools!).

In the joint account we did keep our self imposed limit of only going to the fries shop once a month (yeah for ourselfs!) and groceries were just under 300 euro (mainly due to February being a short month). Everything else was pretty standard.

So from an income and expense view February was a pretty good month. Investment wise, not so much ….

An unpleasant experience

February 7, 2018 / FFsloth / 12 Comments

Well, we had a drop in the market. Finally. Let’s be honest, it was long overdue. And actually it wasn’t even that much of a correction.

Being an active investor sinds 2000 this isn’t my first drop and it definitely wil not be my last one. But it was my first one with a huge leveraged position. Which did add a little bit extra spice to the whole experience.

The broad overview is this. On the first of February my stash stood at 289 722 euro. The 5th February it would reach a low of 253 860 euro. That is 35 862 euro gone poof.

The reason: the strong drop in AB Inbev which first eliminated my buffer and then continued to plunge down.

How did it feel? Well, imagine somebody putting on a glove with spikes on the inside and then cupping your balls.

Day 1: there is slight pressure. You are thinking you are not liking this (and if you are me, a small part of your brain is also thinking, ‘Hey, if it was a beautiful woman doing it, I might find this kinky’ 😉

Day 2: the pressure increases. Gone are all thoughts of it possibly being kinky. Ugly ogre or the most beautiful woman in the world. It doesn’t matter. There is pain, so much pain.

Day 3: you hear craking. There is not supposed to be any cracking down there! What the hell is making the cracking noise? Also pain, so much pain. Please, please let it stop!

After trading hours you take stock of the situation. The biggest question you have is this: have I been an idiot? How stupid was it to put a construction on AB Inbev with it trading around 95 euro? Was it a bad price?

Well it isn’t a really cheap price, I knew that going in. But they do make a ton of money. They will continue to make a ton of money. The dividend is healthy and assured. They will pay down there debt, making either room for more dividend or new acquisitions. I read Dream big and know those guys are efficiency freaks, squeezing an ever increasing free cash flow out of their operations. I read almost every interview with Alexander van Damme. He is smart, high up in the management and already owns a ton of shares of aB Inbev but on 10th January he bought an additional 500.000 shares via patrinvest (and the time before he even bought at 101 euro).

If there is one guy on this world who nows the value of AB Inbev it’s him. And he just put in 48 million euro at 95 per share.

Also, I knew there might me a change of a correction. It’s why I reduced my leverage. It’s why I chose a stable dividend paying stock for the construction because the dividend covers the financing fees. As long as I do not get a margin call I can keep the position for all eternity and even get some positive cash flow out of it! And a margin call was still a long way out!!

All of a sudden the pain was gone! My head cleared.

And then it hit me like a freight train! I actually could make a profit from this drop. If AB Inbev would eventually go back to the 95 euro level I now had an opportunity!

You see, the construction has two legs. And one of them had a very nice profit. The other leg just had an even larger loss. But that loss would disappear if AB Inbev rebounds. But part of the profit on the other leg would then also disappear. Solution: take the profits on the one leg. Then wait till AB Inbev rebounds enough and only then deploy the second leg again. I could actually make a lot of money of this drop!

So day 4, this morning, I woke up with a shiny new pair of metal balls and traded the shit out of the drop.

If it all works out, and AB Inbev does bounce back I will have made an extra 14.000 euro. If it starts dropping again I just sacrificied another 1,7 euro of downward protection because now I am fully exposed to any price movement in AB Inbev. Do me a favor: drink more beer!

Monthly expense report: January

February 4, 2018 / FFsloth / 4 Comments

This year I am going to try to focus more on the expenses. So no more joint account overviews or savings rate. Savings rate was pretty useless in my case anyway as I was not saving to put into the stash but am saving to finish our home renovations. We estimate to have another 50.000 euro renovations to do before the house is finished. We will not count the big renovations to our expenses as we want them done before we stop working. We will keep count of normal maintenance costs as that is something that will happen during our ‘retirement’.

Income: 2 354,55 euro

Expenses: 1 496,45 euro

Savings: 858,10 euro

The income is wage and 230 euro in new year gifts. Good news for next month as the tax reform came into effect and I will be receiving around 50 euro more net wages! Yeah, something to look forward to!!

Expenses were just, barely, under 1.500 euro! Yes!! The first month is in the bag. Next month will not be that good as one of my hard drives in my Synology NAS died and replacing it will cost 200 euro. D’oh!

But this month I limited my spending to 1.500 euro so for the moment I am going to enjoy this good feeling of a mission accomplished!

The bulk of my spending goes to the joint account. 1.100 euro that serves to pay for our mortgage, electricity and gas, fuel for the car and food for our bellies.

So that is 400 euro left for real ‘personal spending.

I did still spend 145 euro on food for myself. But half of it is for protein bars as most mornings I am in too much a rush to get a proper breakfast so I just grab a proteine bar which I then munch down at my desk. Not the most unhealthy choice but it isn’t particualry healthy either. I should make it a project to build up a healthy morning routine. In all honesty: at the moment I am too lazy to do it …

I have made some progress as the girlfriend makes me a healthy seaweed bread once a week. That covers breakfast and lunch at work for three days. It is both healthier and cheaper than the two sandwiches I normally order at work. So that is about half the week taken care of. And it did limit my work food expenses to 70 euro this month. Now I just need to find something to cover the other half of the week. We are looking for something healthy, cheapisch (anything under 5 euro a day is a winner) and quick to do.

Gas for the Vespa was 40 euro. That is about 10 euro a week. This gets me to work every day and to the swimming pool 2 to 3 times a week. I could eliminate soemof this cost by biking more to work. It would take longer but give some more exercise which I do need. But once again my lazy side wins out and I have used the vespa all the time.

A cinema visit + some snacks costed me 33 euro + 17 euro for the train to get me to Ghent. This was to meet up with a friend and I always enjoy my time with him so money well spend in my book.

The remainder of the money (all 147 euro) was spend on an excellent bottle of Whisky. That stuff has gotten expensive! Last time I bought it I think it was around 94 euro. But winning some prices and nicer packaging apparently made it a lot more expensive!! Still, we quit enjoy it and usually it lasts us a long time (last time I bought this bottle was over 8 years ago, so there is that …)

To keep our cost down, this is are go to whisky, very nice and a lot more affordable.

To be honest, the 150 euro spend on the Whisky is realisticly the only real wiggle room I have in my personal budget. I could get my food budget down a little bit. And the gas cost for the Vespa by biking more. But we are talking 20 or 30 euro a month here.

At 1.100 euro the joint account gets most of my spending and htere is definitely some savings possible there but even if i realize some savings there they will go to home renovations and I will not feel it in my personal spending.

But there are some expences I really want to get lower.

We spend 20 euro at the fries shop. That is two visits. Since I really need to lose some weight I am going to limit this to 1 visit a month.

Groceries for us two came to 525 euro. Which is too high. I think we should be able to reduce this with at least a 100 euro. Big part of it is not enough planning.

Wen we purchased the chest fridge the plan was to do some more food planning, cooking bigger batches and reducing the grocery shopping. And we did do it. For a while. Now we have reverted back to old habits. Shopping two or three times a week and not always at the cheapest place but at the most convenient place. Our grocery bill reflects this.

So things to improve upon are:

– on occasion bike to work (weather will need to be nicer for this)

– limit fries to 1 x month

– improve our meal planning/grocery shopping

Special circumstance investing – January update

January 28, 2018 / FFsloth / 7 Comments

The last of the big moves has been done Things are going to get boring from now on. Here’s hoping it’s a profitable boring.

What did I do

Well I didn’t do a lot this month since the new leveraged position is, well, new. I like to have a nice safety buffer before adding another leveraged postion by day trading. And at the moment the leveraged position is reporting a loss. No big deal as especially in the beginning smaal fluctuations in price can cause big movements in value. Time is at my side in this construction and thing generally smooth out after a month or three. Nothing left to do as wait.

Waiting can be good.The put option on Ahold Delhaize is gone! Expired out of the money so A) I didn’t have to do anything (my preffered activity) and B) I didn’t have to pay any fees! I was right, the market was wrong and I made 750 euro because of it.

Did I do anything at all, except lazily wait? Yep, I entered a new UVXY puts position. Ramping it up: bought 71 puts, strike 6 expiry January 2020 for 4,35 USD. That is around 31.000 USD I now have in it.

The girlfriends portfolio

Same situation for the girlfriend.

AD puts are gone and entered a new UVXY puts position: 59 puts for her.

The big move was in the parents portfolio where I finally also unwound there old leverage position and set up the new one on AB Inbev as well.

All three portfolio’s are now running similar position which is a lot easier to manage. Yes, my parents portfolio also had the AD puts expiry out of the money and entered a new UVXY puts position. 43 puts for them. In total I have now over 70.000 USD in UVXY puts. I am hoping to triple this in the next two years.

For the next few months my only investment activity will be to take profits on the UVXY puts and then enter a new postion and perhaps roll the AB Inbev puts I still have. So pretty good change I will do nothing at all in February. Does that make me a happy sloth? Yes it does, yes it does … Gives me time to hunt for some more classic trance songs …

2017 full year recap

January 6, 2018 / FFsloth / 17 Comments

Looking back at 2017 I can only conclude it was a pretty good year. Financially we made great strides and got a lot closer to our Financial freedom (more about that below).

On the overal happiness front it is a bit of a mixed year.

I bought a Vespa and riding it does make me happy.

I didn’t lose any weight. My current condition is not good and being 25 kg overweight can not be healthy. Should make it a priority for 2018.

I did find a pretty cool new workplace but I actually enjoyed being at home a lot more. I came to the realization that for the last three years I actually only worked 8 months (or less) every year. The realization that having found a cool new work place also means working full time for the next three years (at the least) makes me a bit sad to be honest. What can I say? I really enjoy being lazy at home …

The girlfriends job started to suck this year. Which had it’s impact. She is at the moment finishing the last days of a six week medical leave, it wasn’t enough … . Work should improve again as of April. Should … . We are not getting our hopes up as for the last few years when things for one of us started to look up, things for the other person turned to shit. A kind of perverted back and forth game of job related misery. Quiet frankly and honestely, we are both a bit sick of it. Come April – May I should be a lot more secure in the cool new workplace (only started mid November) so if things are still crap at the girlfriends workplace we will use the stash as fuck you money and either greatly reduce her working hours or just have her quit all together. A shame because we always thought she could keep her job even after fire. It is possible at her work place to only work a couple of hours a week or replace people during a few months in the year, thus making it a perfect post-fire workplace. So we always thought the girlfriend was set for post-fire and it was me that would be looking for the odd job each year. Enter idiotic managment … Sigh.

But onto the financial recap of the year!

Personal spending

My personal income in 2017 was 30 862.70 euro.

Work: 17 084,62 euro. I was a bit surprised at the low number but I shouldn’t have been as I only worked 7,5 months this year.

Unemployment benefits: 6 452,83 euro. I collected 4,5 months of unemployment benefits in between jobs.

Gifts: 5 405 euro. Thanks mom and dad! On the other hand, their portfolio increased 14% in 2017. Their default option is to keep the money sitting in a savings account (way, way to much cash in savings accounts!) or some crap product of the bank. On their own, they maybe would earn 2% on it. Looking it from that way, I am making them money! And quit a bit more than 5 405 euro at that! Hmm, perhaps I should let them pay for our remaining home renovations …

Withdrawal from the stash: 1 750 euro. I took some daytrading profits from the table. I had planned to take all daytrading profits to hurry along our home renovations. But UVXY puts have such juicy returns I am plowing all off the available cash into that. I still need to break the news to the girlfriend. She will not be happy …

The remaining 170 euro was refunds of health care costs and such.

Of course, my stash increased in 2017 with 42.000 euro. Which is a cool 11.000 euro more than what I had as income and about 2,5 times what I earned by working.

If I take the stash into account (I usually ignore it) total income would come to 72 862,70 euro! And only 23,45% of it came from work!! If I consider the unemployment benefits as a kind of tax refund (and in a way it is) well, then my taxes for 2017 have to be in the low digits category. Ten, perhaps 15%? I ma too lazy to calculate it in detail but with all gains in the stash being untaxed, gifts untaxed and only work being taxed. Yep, didn’t pay a lot of taxes this year … At least, when I hear a politician saying something stupid again I can find solace in the fact that I didn’t pay for it this year …

Personal expenses came to 20 718,93 euro. That gave me an average savings rate of 32,87%! (ignoring the stash earnings here, otherwise I would be at a crazy 71,56% savings rate). This is an average spending of 1 726,58 euro a month. Not that close to my 1 500 euro goal.

But I should deduct 1 500 euro for the Vespa (I used a tax refund to pay for the other half, yes I know, I made a bit of a mess of it …). So deducting that and I am at 1 600 euro average per month. That amount does include some fun:

I have Hobbies for 941 euro (mainly swimming , graphic novels and the raspberry pi) and a random fun category for 390 euro (carnival, cinema tickets, drinks with friends …).

My holiday in lazarote cost me 1 208,50 euro

If I deduct all these ‘fun’ lines my personal spend was 16 680 euro or 1 390 euro a month! But what is life without some fun in it?

On the basic expenses front, the main cost was towards our joint account: 6 800 euro. This is my half for our mortgage, utilities and food for the both of us. if it seems low, well we had a tax refund which we used to cover those expenses for some months. (Yes, I know, I made a bit of a mess of it, will do better this year, I promise).

Clothing came at 333 euro. I bought some pants and shoes. This year: shirts!

Here is a fun fact for my American readers. Health costs in 2017 were 116 euro!

I did spend 1 355 euro for food on myself. This is mainly food bought at work (i.e. sandwiches). I feel bad about it because A)bringing my own food should have been cheaper, B)bringing my own food should have been healthier. See the above mentioning of not having lost any weight. So I was actually spending money to remain unhealthy. Yeah, not happy about it!

Joint spending

If I look at our joint acount. The big categories are the mortgage ( 11 213,76 euro) and utilities 3 678,63 euro (electricity, gas and water) and then the car (2 110 euro). Bicycles, or a Vespa, really are a lot cheaper! Groceries (both food and cleaning stuff) for the two of us was 5 151 euro. That is around 430 a month. Ok, but not that great. There is definitely some fat to trim here.

Insurances set us back 1 508 euro. But that covers the house, car, Vespa and personal liability. I need to have a look into our insurances and see if a cheaper alternative can be found but I also would like to include a general insurance for legal counsel (as attorneys can become expensive fast) so I do not think any savings will be found in this category this year.

Food for our animals: 851 euro. But we love our animals so this went under hobbies.

Restaurant was 818 euro and my personal account had another 100 euro or so in this category. Some restaurants were fancy (like 280 euro for four people) but we also put our local fries shop here. health, and money wise, we go a bit too much to the fries shop.

Even in our joint account we have a random fun line, which was mostly fun, for 486 euro.

Conclusion:

If you do not buy a Vespa I think you can have a nice and even fun life with about 1 600 euro a month. I ‘think’ because this was the first year of budgeting and I definitely made some mistakes.The division between personal and joint account does not always make it easy and then there is the question how to tackle tax refunds or the meal vouchers I get from work … For next year I am going to focus more on the spending part and skip the savings rate completely. Also trying to get it as close as I can to how it would be when we would be FIRE. Still learning. Hopefully still improving …

Monthly expense report: December

January 4, 2018 / FFsloth / 2 Comments

The last month I report my monthly expenses in this format. As of next month I will exclusively focus on my personal spending in that month and try to get a better view on what I spend exactely (meal vouchers and tax refunds are a bit tricky). For this last month the world seemed hell bend on giving me more money. I didn’t put up much of a fight …

Personal account:

Income: 3 660 euro

Expenses: 1 521,10 euro

Savings: 2 138,90 euro or 58,44%

The higher income is from my first full month of employement at the new job. They could not meet my gross wages demand but countered with a multitude of net expense compensations. The big question was then how much all of it together would amount to. Well, I was pleasantely surprised …

I also seem to have worked enough interim work last year to qualify for a end of year premium this year. Didn’t even know that existed but not going to say no at an extra 1 500 euro!

Expenses were 1 521,10 euro. Just above the goal of 1 500 euro. I did buy presents for the parents. The girlfriend and I also had a date night which costed 40 euro. And I also spend another 100 euro for another raspberry pi. So core expenses would have been around 1 300 euro once again. And no fear, I have all I need on the raspberry pi front, so no more expenses there.

The joint bank account

Income: 4 624,40 euro

Expenses: 2 151,80 euro

Savings: 2 472,60 euro

Adding my half of the joint savings to my personal savings and my total savings are 3 375,20 euro or 92,22% of my income!

The higher joint income is because the Belgian government was quick with the refund (normally we only get it in March). An extra 2 000 which I rather have in my account than in the governments account. We also got a refund of the water company of 262 euro. Like I said, the world was really hell bend on giving us money!

Expenses were fairly low.

All in all we ended the year with healthy buffers in the checking and savings account. The year has been good for us as the full year recap will show.

The stash: the 2017 overview

December 31, 2017 / FFsloth / 7 Comments

In December 2016 I mentionned in this post that on the 30th December 2016 the stash stood at 244.000 euro. This after an impressive gain of 68.000 euro or 39% in 2016. This gain was due to the fact that Berkshire Hathaway had a brilliant performance, my first ever leveraged construction worked out great and the USD got stronger compared to the EUR (as I am mainly invested in USD).

So how did I do in 2017?

On December 30th my stash stands at a somewhat dissapointing 286.000 euro. A gain of 42.000 euro or 17,21%. Add in the 1 750 EUR I withdrew this year and I stand at a gain of 17,93%. Not bad, and for the second year in a row the stash grew more than what I have spend in the year. Which technically makes me financial independent.

But still, looking at those numbers I am somewhat diappointed. Let me explain. I am almost 100% invested in Berkshire hathaway. On 30th December 2016 it stood at 162,98 USD and it closed the year at 198,22 USD or a gain of 21,6%

I had my leveraged construction working out fine and giving me around 20 000 USD in profits.

I wrote several puts that all were profitable.

And I made 7 500 USD in daytrading profits.

So how the hell did I underperform Berkshire Hathaway? The reason is simple, almost all of it was in USD and the USD got a lot weaker against the EUR in 2017. I had strong currency head winds. EUR USD was 1,0522 at the start of the year and ended the year at 1,2016. And I was fully invested and leveraged in USD: ouch. Had the currency rate remained the same my stash would have been worth 326 600 euro or a 33,85% gain!!

So all my effort, and then some, was wiped out by the lower USD. It didn’t really off course. Everything is all there. I started out the year with almost no cash and am now able to plow 33 500 USD in UVXY puts. It’s just when you report it in EUR, the ‘loss’ appears.

While it is no fun, I rather have the USD drop while both Berkshire Hathaway and my leveraged construction work out fine than have everything at once work against me. At least I still made a decent profit.

It also proves that when you are an active investor you shouldn’t really be bother by currency fluctuations. Despite the falling USD and being fully invested in USD, I still made more money (in EURO’s) off my stash than my annual spending! It would only be when I need to exchange USD for EUR that the lower exchange rate would hurt me. But I didn’t need to this. My 1 750 EUR withdrawal from the stash did not come form converting dollars but came from puts I sold in euro’s!

Since my new leverage construction is in euro’s (more because of the lower intrest rates then low confidence in the strength of the USD). In 2018 I should at least have a 20 000 euro cashflow generated by a portfolio almost completely in USD. As an active investor, forget about the currency and just go where the investments are the most attractive (with the possible exception of places like Zimbabwe or Venezuela).