With the holidays behind us, our lives slowly return to our regular daily routines. Some of you might have had some time off while others were working in quiet offices. Nonetheless, it’s always a different vibe around Christmas and New Years.
Our habit to reflect on the past and make plans for the future around new years might be a whole lot older than we think.
The month of January is named after the Roman god Janus. He had two faces – one looking to the future and one to the past at the same time – is one of the oldest god known to man and one of the most famous one as well, back in the day. Many referred to him as the god of beginnings, the light, movement, transitions, change, or the passing of time. His resemblance was used to portray doors, entrances, banners and of course: money.
In essence, he became a symbol of the progress from past to future.
And as we enter January goals and resolutions are being set for a new year. That what we have learned from our reflection is turned into plans to make it an even better year to come. It’s an old habit we can’t get rid off, apparently.
The past year
A lot has happened the past year, so much even, that it’s hard to remember where we were at at the beginning of the year. Both in our financial and personal life, many developments took place. The biggest impact on a financial level was the decision to start investing in real estate, in our personal life it was our decision to get married (which will happen this year).
With the books are closing at the end of the year, we normally rake up all financial streams and projects to give insight into how the past year’s performance has been. We don’t budget, have no financial targets, and make no use of a yearly financial model or plan. We do track our personal income and spending, our dividends, the amount of debt and for a short time, our rental income (and spending) on a monthly basis.
We track all of our monthly spending and income. On a personal level, we want to know what we spend our money, and how much is going to our savings/investing fund. After tracking it for 2.5 years now, I can notice one trend that became really obvious. The average amount of money we spend goes up every year.
Not something you would expect when you focus on financial independence. Especially since we made some frugal changes to save money over time. The biggest cost drivers weren’t structural costs but came from my motorcycle lessons, our trip to The States and costs made for our wedding of this year. Not much to worry about.
We end the year with an average savings rate of 51%. Which is more than I could ever think off one year ago. I would never have thought something like this was even possible. When we started tracking our spending, we had a savings ratio of 35%, in 2016 we ended with an average of 41%. And now we went next level with 10% more than last year. Even with our expenses rising. The higher savings are mostly coming from our yearly increasing paychecks and the sale of our car 6 months ago.
For our dividends, it’s the perfect timing to tally up the total score, since it will the last time to do it. Over the year we managed to collect 1101,14 euro, with an average of 91,76 euro per month. The year before this was only 849,31 euro, meaning an increase of 29.6% made our dividends grow over the year. Keep in mind, that in the past year we had only bought two new stock additions, so most of the growth is coming from dividend increases of existing holdings.
With the welcome addition of three rental properties, not only our income will grow, but our debts has increased as well. This might sounds scary to some, but our debt tripled compared to last year. All of our properties are cash flow positive, which means there is more money coming in than going out. And the mortgage is therefore paid by using other people’s money. The first property is already rented out, the second will be soon, and the third is bought in rented condition already but will pass somewhere in February of this year. It’s going to be a good year.
Although I like to set lofty goals, make up lists of what I can achieve or think of what all could happen in the time span of 12 months. I’m not setting any resolutions this year. Firstly because every time I did, I forgot about them within the week. And second, because a new year isn’t the only option you are able to make new plans.
In order to know where I want to be in the future, I have to get thinking of how I see myself as a person. Who do I want to be in 10 years? Every day will be important, every day will be a new chance to work on becoming that person. The only downside is, I’m not having a very clear image yet. And that’s okay.
I still want so much to do, to learn and to experience, that I’m not really sure about how it all will look like 1, 5 or 10 years from now. And in all honesty, I don’t really want to know either. Dipping in the unexpected, where possibilities to create are endless seems awesome. Just act on what seems like a good thing to do, and say no to the ones that aren’t that important.
We have big ambitions, still want to reach FIRE, but also want to stretch to see how far we can go and maximize as much as possible. Either for investing, blogging, health, or other aspects of our lives. So instead I leave it with this quote, which sums up my thoughts perfectly.
“Don’t think about what can happen in a month.
Don’t think about what can happen in a year.
Just focus on the 24 hours in front of you
and do what you can to get closer to where you want to be.”
– Eric Thomas
Other interesting views on the new year:
My “Don’t Be A Dumb Ass” to-do list for 2018 – by Steve from Think, Save, Retire.
The rules I’ll try to live by in 2018, and will probably fail – by Yann Girard.