2020 Financial Review

Year End

I have to start by saying I am very lucky to have a garden. My garden really helped to kept me sane this year. We are now past 21/12/2020 (Winter Solstice), which means every day from now on gets brighter. Sewing and planting are only a few months away! I can hardly wait. 

Reflecting on what I have achieved in my 2020 Financial Review has been a net positive for me too. This post is a good exercise in forcing myself to recognise measurable progress I made in a dark and challenging year. 

Simplifying My Degiro Investments
2020 Financial Review

In line with the shift in my investment strategies towards property, I have decided to simplify my position with stocks and shares. I have closed my positions in the following:

  • Under Armour
  • Alliant Energy Corp
  • GLENVEAGH PROPERTIES P
  • ISHARE.NASDAQ-100 UCITS ETF DE
  • ISHSIII-CORE MSCI WORLD U.ETF

The only one of the above that made a small loss was Glenveagh Properties. The largest gain was on the Nasdaq. I remember the Nasdaq took a tumble at one stage in the last year or two and I bought in. Under Armour was the very first stock I ever bought and it was literally to figure out how the purchase interface on Degiro worked. I bought one stock. I do like their gym gear.

A Simpler Degiro Portfolio

My portfolio now consists of the following:

  • Vanguard S&P 500 UCITS ETF
  • ETHEREUM XBTE Ether Tracker Euro XBT PROVIDER
  • ISHARES GLOBAL CLEAN ENERGY UCITS ETF

My plan now is to just keep investing a very modest €200 per month into the ISHARES GLOBAL CLEAN ENERGY ETF. Every year I will skim up to €1,270 off the top (or whatever the growth allows). The proceeds from stocks of shares I sold this month will be diverted to the renovations of my investment property or simply put off that mortgage.

Admittedly, I still don’t feel like a fully understand the tax implication of stocks and shares. In 2021, year I will need to engage an accountant for my limited company so I will also seek clarification and guidance on this issue too. In the meantime, I will keep researching and trying to understand it better. 

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TOTAL DEGIRO PORTFOLIO WORTH

Continuing to Move Away from Peer-to-Peer Investing
2020 Financial Review

I have mentioned before that I have lost a good deal of confidence in peer-to-peer lending. This is largely because the Envestio scam where I lost nearly €500. On top of that, the Grupeer situation is limping on with very little hope of recovering the €2,000 I have invested on that platform. The total amount of my losses is small change to serious investors but the lesson learned has a lot of value to anyone.

Regardless, I have reduced my position in peer-to-peer lending to three platforms: Mintos*, Flender* and Viventor (* these are referral links). My max for each of these accounts moving forward will be €1,000. I may consider closing all of the accounts and moving the small amount of money into my property investment either by reducing the mortgage or paying for renovations. 

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TOTAL PEER-TO-PEER ACCOUNT VALUE

Savings
2020 Financial Review

My savings have recovered since I used most of them up as a deposit on a my investment property this year. I am now back up to 10k savings but I need to be a little more cautious about keeping an emergency fund. I now have two mortgages to service. As of the end of 2020, my savings rate is at a modest €500 per month.

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TOTAL SAVINGS

Salary and Employment
2020 Financial Review

2020 has been an interesting year for me in terms of employment. I had my two jobs as normal but as I finished up the second job (working for the private company), my intention is not to go back as an employee but offer my services as contractor while growing my own business. 

With regard to my public sector job, there was another adjustment in my salary due to a review so I actually managed to “grow the gap“. Next year though, the gap will shrink significantly if I do not go back to my private employment. The only ways to mitigate this reduction in my PAYE salary will be if:

  1. My limited company performs well and I take a salary from it.
  2. I get my investment property up to standards and rented out.

This year, I also picked up some extra hours in my public job to help cover for the impact COVID had on the delivery of education. Unfortunately, these hours turned out to be fire-fighting in nature and I was dumped with solving problems and patching timetables. I am always the first to say that teaching is a great job and has a myriad of benefits. I also describe myself as highly organised. This year my teaching job pushed me to my absolute limit. It quickly got to the point where I was working constantly during weekends and evenings just to keep up and try to maintain a certain standard of delivery for the students. 

Sadly, this has made me wary of management agendas and much less inclined to take on any extra hours beyond my contract next year. 

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PUBLIC SECTOR JOB SALARY (GROSS)​
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PRIVATE SECTOR JOB SALARY (GROSS)​
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TOTAL SALARY IN 2020 (GROSS)​

My Limited Company
2020 Financial Review

I have set up my own company this year and I am offering front-end web development and website design services in Ireland. However, I was working my two normal jobs this year so as a result, my focus was not on growing the business. Because I learned more about the benefits of having your own company in 2020, I plan to put a greater focus on it in 2021. The company earned a very modest income in 2020 and the jobs were picked up casually rather than being won by any marketing strategy. 

If I focus on this venture and don’t go back to my old private sector job, my salary will shrink significantly. But I can take my “grow-the-gap” financial goal and apply that to my business instead. 

 I am hoping that my former employer will be happy to continue to throw work my way to keep me ticking over and I can secure clients myself. If you know anyone who needs a website or a front-end web developer – send them my way for a free, no obligation quote 😉

The overall plan for the business is to use the earnings to fund a director’s pension. I have a meeting booked with a pensions advisor for the first week in January 2021.

I am also booked into the Local Enterprise Office’s courses on “Starting Your Own Business” and “Basic Book Keeping for Small Businesses”. I had a session with an LEO mentor and attended one of their online networking events. Networking is definitely out of my comfort zone – I am not a social butterfly. But “suck it up”… just keep trying.

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LIMITED COMPANY INCOME​ (GROSS)

Rent-a-Room
2020 Financial Review

I think I got really lucky this year with the timing of my housemates moving out and COVID-19. Earlier this year, one of my housemates informed me that he was moving back to his home country in February and very shortly after that, the other moved to another house on the southside of Dublin, closer to his job. 

Only a week after this, we started hearing about COVID-19 in Europe and Ireland. While the pandemic was quickly spreading. I decided it was best to live alone. This meant 6 months of voids. While the lack of income was certainly noticed, it was also a very good test of my preparedness and minimal lifestyle. COVID kept us all at home but I was still able to continue working online and there were no dents in my savings or any serious financial pressure as a result. 

In September, I took another lodger in and October saw a second one join the household. Both have paid rent in full and on time and one has moved onto the HAP payment which has led to an inspection of the house and some small costs to bring it in line with County Council regulartions (fire blankets and window safetly latches).

We did experience some recent unpleasantness when the relationship between the tenants broke down and there were verbal altercations. Both looked to me to resolve these which I did to the best of my ability but I also reminded them that my role as a landlord is to provide safe, clean accommodation – not to mediate personality clashes. The dispute resolved after a shouting match between them and subsequent apologies. Fingers crossed that will be the end of that. 

From my perspective though, I was not even aware of their bickering for weeks because I was either at work or (when lockdown allowed) in Wicklow. While nobody enjoys a bad atmosphere in their living space, it didn’t negatively impact on me to any great degree. 

I have been told more than once (and by tenants) that my rates are competitive so I am sure I wouldn’t have trouble finding new tenants if needed. 

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RENT-A-ROOM INCOME​ (TAX FREE!)

Mortgages
2020 Financial Review

Never thought I would be saying mortgages – plural. My mortgage debt went up significantly this year but I have already started over-paying my second mortgage on the property I recently purchased in Wicklow. I am hoping to be able to overpay by €500 per month but the renovation works required for the Wicklow house may impede on that. 

I will be posting an update on progress with the investment property in the new year.

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DUBLIN PROPERTY MORTGAGE​ BALANCE
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WICKLOW PROPERTY MORTGAGE​ BALANCE

Bring on the New Year
2020 Financial Review

I am very positive about 2021, I think most people need to be. The promise of a vaccine brings real optimism about hugging friends, going for coffee and cake and travel. Financial goals aside, I plan to live a lot. 

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