Financial Goals Review

MID YEAR 2020

I make a habit of reviewing my financial goals every six months. This is important because it forces me to take a record of any progress I have made. It gives me a chance acknowledge any progress and my mistakes – putting my actions or lack of action into sharper focus. At the end of each review I decide if my financial goals are still relevant or if they need to be adjusted.

Financial Goal 1

Paying Off My Mortgage Early

Since late about October 2019, I am locked into a fixed rate mortgage for 2 years. After I made the switch, I got €3,000 from KBC. I immediately took €4,400 of savings and paid of €7,400 which was 10% the principal. This is the maximum amount I can overpay my mortgage within the fixed term period of 2 years.

I chose to pay off the the lump sum because it cemented the mortgage overpayment option in place in my head. It validated the hassle of switching and has since allowed me to channel my extra cash into savings. This graph shows the progress so far.

In October 2021, I can switch back to variable and resume regular over-payments or I can move on to whatever fixed rate the bank is offering at that point. 

This time last year my monthly repayments were €589.25 per month and I had 44% of the mortgage paid off. This year, thanks to switching and over-payments, my monthly repayments are now at a very manageable €435.45 and I have 48% paid off. 

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Mortgage Balance
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Paid Off
Financial Goal 2

Add Value to My House

Vegetable Patch

I converted the “patio” area of my garden into a vegetable patch. This week I have been eating strawberries directly from my garden. I have grown a lot from seed including leeks, broccoli, scarlet runner beans, peas and cabbage. I also have two varieties of potatoes and a bed full of garlic. Raspberries are developing well too.

Not sure if people would classify this as an objective value-add home improvement but it certainly made me happy and kept me entertained during lockdown. 

Wall Cladding

I have been wanting to do this one for a while! I hate the breeze block walls. Plastering was an option but you would swap one grey slab for a slight smoother grey slab. So I went with standard rough sawn timber. I will make a post about this in the near future. 

Bathroom Lighting

I swapped out the single pendant light for a series of IP65 rated spot lights. That means they are well up for being exposed to some moisture. The difference was really amazing – I got a trade pack of ten lights on Screwfix for about €66.95. The only issue with the type of lights I got is that when the LED bulb goes, you have to replace the entire light. This apparently is becoming more common, but the manufacturers claim 10,000 hours of light from each one. 

Kitchen Improvements

I am well out of my depth with this one, but I am remaking some kitchen cabinet doors in an attempt to refresh the kitchen. A friend of mine booked me in for a kitchen design consultation with IKEA and they were great – it looked lovely. However, I have decided not to invest €6,000 into it and simply refresh what is already there to the best of my limited abilities. 

Financial Goal 3

Live a Minimalist and Frugal Lifestyle

The Good Minimalist

Lock down really helped to limit spending, the whole country was frugal by default. I have continued to minimise my personal possessions. I used adverts to sell old x-men comics, playstation games and books. I have access to digital copies of all of the physcial items I sold so I am not missing out on enjoying the content. 

I even put my old Calllcard collection up for sale. Callcards turned out to be a poor investment. As a mildly autistic nerdy child, I saved up to buy them and kept most of them in the wrapper, thinking they would be very valuable in the future. Now I look at them as having only nostalgic value. Unusable chunks of plastic with pictures of Boyzone, Gay Byrne , Garth Brooks and Erin Hot Cup – ahh, I remember that instant soup. 

The Bad Minimalist

I have acquired more tools. I do some mental gymnastics to separate these from generic “stuff” because they are utilitarian and I get a lot of use out of them. This is fine because the mantra surrounding minimalism is that the objects that you decide to own bring value to your life. Tools do this for me because I enjoy DIY projects and many of the projects literally add value to my house in a small way. The problem is, my tiny shed is now so full of tools that I have to walk into it sideways just to fit in. I have dreams of a big workshop one day. 

Financial Goal 4

Grow the Gap - Increasing my Income

Extra House and Another Small Salary Increment!

In my first job, there was small increase in my part-time hours allocation and these have now been officially rolled into my contract. On top of that,  there was another small increment to my salary in May which is absolutely great. As a result, my salary for this job has increased.

My other employment continues with a set contract worth €12,000 per year.

This means my minimum gross annual salary (excluding any overtime or income from other sources) is now €34,728. At this point last year, my salary was €32,203.

I have grown the gap by €2,525. Boo-yah!

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Current Gross Salary

Peer-2-Peer Investments Income

I have been steadily divesting away from Peer-2-Peer for two reasons. The first is because I am channelling funds towards a deposit for an investment property. The second reason is because I have lost of bit of confidence in Peer-to-Peer lending. Envestio cost me nearly €472 and it looks certain that Grupeer will swallow nearly €2,000 of my capital. An expensive yet valuable lesson to learn. 

I was much more enthusiastic about Peer-2-Peer lending when I first started but now I am understandably less excited. My plan for now is to continue divesting from the platforms. However, I will probably leave a balance of about €1,000 with both Mintos and Flender.

Below is a breakdown of my current position in each one and also the interest earned so far in 2020. Please note that some of the links to the platforms are referral links so if you sign up through them I will get a bonus (if you do sign up via my referral link please let me know so I can thank you personally).

Platform NameTotal Account ValueInterest Earned so far in 2020
Mintos (This is an affiliate link) €1,634.57€95.69
Grupeer *Possible Scam as of April 2020, read more here€1,994.77€52.46
Viventor€1,233.08€102.94
Envestio*this platform turned out to be a scam in January 2020, read more here€0€-467.63
Flender (This is an affiliate link)€613.00€18.84
Total€5539.25-€197.7‬ (269.93 interest - 467.63 lost capital)
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Interest Earned So Far in 2019
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Capital Lost so far in 2020
Financial Goal 5

Save a Deposit for an Investment Property

Well now, this one is the most exciting. This time last year my savings were at 16,600. It might seem impressive that I almost doubled that in a year but remember, I moved a lot of money from Peer-to-Peer into the credit union. I now have enough of a deposit to start looking at properties. In fact, I have already done several viewings. I was out looking at houses in the Friday before the Irish Government announced lockdown. 

Can I consider this goal achieved so? I guess I can, but my neurotic brain won’t let me tick it off until I actually purchase a property. My next question will then be, what do I replace this goal with? I know that I will want to “add value” to the new property but that just involves expanding the scope of Goal 2. 

Another thing to note here is that I am undoing a fundamental goal of the FIRE community – the emergency fund. I had savings in my credit union account which I had earmarked as an emergency fund while I was saving up. However, over time those funds got mentally rolled into the property deposit. I will need to address this and possible find a completely separate account to store an emergency fund once I build one up again. 

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Saved for a Deposit
Financial Goal 6

Make Work Optional

A Clearer Path

This goal was always the most nebulous, but at the start of 2020 I set up a company with the view of eventually switching my second part-time job over to a contracting role and seeking out clients and projects of my own.

I thought a little more about the wording of this goal and what “optional” means. I still need to work right now but as I progress to contracting and expand my client base, I will have the option to pick the projects I am most interested in working on.

The other aspect to consider is my goal to buy an investment property. The income from that will eventually go towards replacing the need for the second job if I want to do that. This gives me another ‘option’.

Index Fund Investments

I continue to throw about €200 a month into DEGIRO and did so even during the corona crash. Think they call this “dollar cost averaging” – I certainly got the ETFs at a discount for two months. My approach is “buy and hold” but honestly, I still don’t fully understand this asset and I am more interested in property. My concerns for this facet to my FIRE plan is making an effort to identify more environmentally and socially responsible funds to invest in over the next year. 

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In Stocks and Shares

Reflecting on
my Financial Goals

As wrote this article, I realised something very important – most of my goals don’t have definitive end points. The two that do are “Paying of my Mortgage Early” and “Save a deposit for an Investment Property”.  These ones are very measurable and have clearly defined points at which I can tick boxes and mark them as “done!”.

I have more goals that are lifestyle and long-term; as a result, it is harder to define when I achieve them. I need a more balanced approach to my goals because I realise that what I need is a mix. Therefore, I will strive for a balance between aspirational goals and goals that are clearly defined and measurable. 

As soon as I purchase a property, I will tick off  “Save a deposit for an investment property”. I will then add another clearly defined financial goal and I know exactly what it should be.

Adding to my Financial Goals

Rebuild an emergency fund and separate it from my accounts has to be my first. The next goal I set is going to address my biggest financial independence fail to date! I still haven’t set up a pension. Well… that’s not totally accurate. I do have pension with my public job – but it’s tiny because I am part-time pro-rata in that job. 

Starting a pension is especially relevant now because I set up a company. The allowances around a director’s pension are apparently extremely generous. 

But are there other things I should consider? Yes. Health insurance for one. An after that I want to start thinking about my dream house. Not strictly a financial goal, more of a life goal. But it will involve more dedication, work and prudent financial decisions in order to get there. Grow the Gap will become more important. 

My dream house is a modest 2-3 bedroom cottage on a parcel of land big enough to accommodate a large garden, a workshop, a poly tunnel, some ducks, a beehive and maybe… a pig. All within a reasonable drive to Dublin. I can dream can’t I?

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5 thoughts on “Mid-Year Financial Review for 2020”

  1. Hi, just been generally looking through your blog. I haven’t seen any mention of pensions. In my opinion, maxing out AVCs should come first before investing personally as it is the most tax efficient way to invest. If you used your rent a room scheme money for AVCs, you would actually get tax back on this.
    Sorry of this in under the wrong section
    Nice blog by the way.

    1. Lol, my secret shame! I swear setting up a pension on my to do list. I actually requested a call back from Zurich the other day and I intend contacting Irish life and a broker too to learn more. But yes, I believe you are right. I started investing in ETFs as I when I got started that but, as I have been learning more from the FIRE whatsapp group I am in, I am beginning to see that tax laws in Ireland make ETF investing much less attractive than all the american podcasts make it out to be. Thank you for pointing this out, I needed a good reminder so I will try to get the pension sorted asap. Also, thanks for your kind words.

      1. I Achieved FIRE about 3 months ago at age 45. Well to be honest, I have the FI bit, but not planning on the RE bit. I focussed on pensions as a tax efficient way to save, then when I was maxed out, I started investing in shares, Funds, P2P, P2B and ETFs. eTFs was probably a mistake due to the tax Treatment, but I have kept my investments there.
        You cannot get a better way to invest in your future than pensions. Nothing comes close. It is worth taking the time to sort it out. If you walk people though your experience (good and bad) on this blog, you could do people a service.

        1. Wow, well done for achieving FI! That is an amazing life-time achievement. Yes the RE bit isn’t in my plans, I love my job but I am lucky to have a LOT of time off and plenty of flexibility.
          I have started to do something about a pension, if only a few small first steps. I got in touch with Irish Life and also signed up for the Pension Awareness week – there’s a seminar about director’s pensions that sounds like it is just the thing I need. Normally, I am fairly organised but I have to admit that there is just so much information about pensions that it is overwhelming. I will certainly be sharing my experiences here for sure.

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