Goals 2020!

Ahhh! Making goals only in february seems like slacking right? Right…

Let me explain here some of our 2020 goals and how did they go in 2019.

Financials

Savings rate at 30%

In 2019 we achieved 24% savings rate. Summing all our income recorded (since August) and subtracting all our expenses we got ~5k saved for 5 months. This accounts for an average of saving 1k per month.

We think we can do better!

For 2020 we would like that this value increases to 1.4k per month in average. For the sake of simplification i’ve assumed we maintained the same income and saving 1.4k would mean 30% savings rate. This is a percentage we feel confortable with.

Increase networth in 10%

In 2019 our Networth increased 114% (+ 211 679,78 €) which was a huge bump. The reason for this was we got married and joined our assets.

I’ve been tracking my Networh individually since 2011 and as you can see there as been a nice rise! I’ve been tracking this since i was 23 years old and started working full-time 2 years before (in 2011). The increase either means i was very poor at the time or i’ve been saving and investing properly. My wage also grew dramatically (thankfully!) over this years.

To be honest i think i already had a good headstart since i dont know much 23 years old Portuguese with a Networth of 19k. And i had alredy bought my car which i valued at ~14k. Meaning when i was 23Y i had ~5k in liquid assets. Yay!

Coming back to topic….

Using currently our forescast for growth i would expect a rise in our networth of ~5%, this would mean 22k. To achieve this value i would use the % i expect our ETF portfolio to grow, what we would save yearly, what P2P returns would be, etc.

Nonetheless, i believe we could go to a higher number of around 39k growth, meaning 10% increase. (+39k).

Starting a company and having revenue of at least 10k

I’m currently in 2 partnerships, one of them already started last year which i will be formalizing soon by creating a company with a business partner. I’m quite confident we would be able to generate significant influx from this endeavor (>50k) at least. Nonetheless, lets be conservative. It’s my first company and i would like to have some activity at least.

Find a new property to invest (Optional)

I’m not making a hard deadline for this. We have still+3Y to invest the proceedings from our apartment sale and if the market doesnt retract soon we are willing to wait more time.

Non-Financial

Remodel the farm houses

In 2020 we would like to remodel and have usable our 2 farm houses. Or at least one of them so that we can finally start making use of our farm.

Maintenance primary house

Currently we have several things still to be done on the building we have our primary residence. This involves some work on the roof of the building (on going) but also other things like starting repairments on the facade. We live in a 1900’s building with 2 more tenants and every step takes a toon of time and effort. Making budgets for repairments, sending it to companies that execute this work, having them either not replying or coming and never sending a budget (yes, this happens in Portugal! Angry face).

If i could sum-up our objectives for 2020 it would be having the lateral facade repaired.

Networth

Networth Update – 01/2020 (January)

In January we continued reducing our exposure to P2P having it representing now around 3% of our portfolio (it was 5% in November – 2019). We reduced exposure mostly in Robo.cash and Mintos since Wisefund and Monethera currently frooze buyback due to widespread panic in the P2P market. We have now not more than 400€ exposure to any LO originator and since the money was sitting around in robo.cash i figured why not removing it from the platform.

Additionally, our ETF portfolio also suffered a decrease (altough as the time of this report it recooped the value and plus some more) due to the panic with CoronaVirus in the emerging markets. This affected several ETFs – and the global market – due to fears of factories stopping production in China since workers could not go to work due to contagion possibilities.

When it comes to risk we are very conservative at the moment and cash plenty, as you can see we haven’t invested any of our proceedings from the Apartement sale. We are currently validating with an accountant exactly how much do we need to invest in order to minimize tax payment.

Taxes after selling an apartment

In Portugal when you have a plus from a sale of your main property you need to pay tax on 50% of that plus. Now, that tax will be included in your normal yearly tax. Nonetheless, there are some exclusions to this rule which are the ones everyone uses to avoid paying that tax. Good explanation – here (only in portuguese).

In this case we have bough the apartment for 172.5k and sold it for 305k which amounts to 132.5k. Now we can deduct several things here like home improvements costs, mediation costs, costs that you had when you bought the place, etc. There is also an inflation adjustment based on the year that you acquired the property. After deducting all of this, the value stands at 101k. In this case 50% of this value would be liable to tax payment, meaning 50.5k.

Now, the rule to be excluded from this tax is that up to 36 months after the sale (3 years) you need to reinvest into another property and that property needs to be your main household.

The value that you need to invest from your own money is calculated by Price of sale – morgage on the property . In this case, we had 2 morgages on the apartment. We are validating with the accountant if they both count or if only the one we used for aquiring the apartment. In this case we talk about Morgage 1: 139 853,65 €, Morgage 2: 29 156,23 € .

Current options to validate:

a) According to our accountant only the first should be used, meaning we would need to invest ~165k (305k – 140k). Damn…too much, we dont have that much and would need to take a personal loan or to pay a proporcional of the tax…:(

b) According to the public services tax branch we went, what matters is the value of the loans we terminated once we sold the apartment, in this case, the full morgages. This would mean 136k (305k – 140k – 29k). Which is much preferable and we will have the cash in 3 years for sure.

I now will do a written questioning to the Portuguese IRS in order to have this sorted out and a proof when submitting our taxes. Better to play it safe.

There are still some questions like would this need to be the value we invest in total (new property price + tax) or does it only count for property value? This makes a big difference since when buying you need to pay municipal tax and gov tax which can be around 20k for a 200k property.

This will have impact on what we plan to do with this sum, ranging from improvements on the farm to me taking an MBA and how much do we want to invest in a new property (we have a few ideas already). Remember it needs to be a “single” apartment.

Coming to our monthly networth…

Summary:

Our Networth value for January is 395 822.50€ (-845.45)

January adjustments:

  • We have started to account for vacations in our monthly budget. For this month to avoid removing money that we consider “saved” we have parked a bigger sum in our checking account ~500€ more.
  • We also had vacations, 10 days in Ireland and we circled the whole island. Pretty cool. Definitly recommend! We spent 2k on those vacations. So after all, not a bad month!

Assets:

Investment accounts

  • ETFs Portfolio: 23 314.53 € (-243.52)
  • Retirement Accounts (aka PPR): 14 622.63 € (+589.12)
  • Certificates Deposit + Emergency Fund: 130 305.32 € (+2853.35)
  • P2P Portfolio: 11 037.56 € (-4 388.58)
  • Total Investment accounts: 179 280.04 € (- 1 180.63)

Real Estate (Based on Market Values)

  • Primary Residency: 300 000 €
  • Farms: 70 000 €
  • Total Real Estate: 370 000€ (Removed Rental property)

Cars

  • Mr.Firecracker Car: 20 000 €
  • Mrs.Firecracker Car: 18 000 €
  • Scooter: 1 500 €
  • Total Cars: 39 500€ (=)

Total Assets: 588 780.04 € (-1 180.63)

Liabilities:

  • Primary Residency: 192 957.54 € (-335.18)

Total Liabilities: 192 957.54 € (-335.18)

Our Networth drilldown looks like this:

You can follow our Networth status always here

Networth

Networth Update – 12/2019 (December)

In December we reduced exposure to Mintos P2P platform. If you have been following the news on the P2P area and if you are a fellow Mintos investor you might have noticed the following post on mintos blog. Basically the Loan originators from Mintos operating in Kosovo had their license revoked on the grounds of ignoring previous warnings due to imposing high interest rates and also compliance issues.

My first Mintos situation

The case gets a bit shady if we compare the financial size of Monego in Kosovo (~15M € in assets) and the way all has been handled. Shady goes not only on the direction of Kosovo authorities which Monego CEO points but also to Mintos situation with their LOs.

This is nothing new but when we have one of the founders of Mintos being Monego CEO the case gets quite tricky. We shouldn’t be naive to expect these fellows wont try to take advantage of complex tax schemes using shelter companies in Malta and other places to loan and borrow money to avoid taxation on gains. If they get too agressive on this (eg. borrowing with very high interests) they should pass, otherwise sometimes it get triggered.

This has caused an increase in Mintos secundary market circa + 100k loans. Personally, i’ve sold my positions to a maximum of 400€ per LO. With the current situation i’m currently locked with 732€ in Monego. In the meantime Mintos also announced Monego loans would be stated with Pending payments and would be assumed by Finitera group. Making sure when the loans were being payed in Kosovo the money would find his way towards “us” the investors.

Lets see what this will conclude…

Summary:

Our Networth value for December is 396 667.95€ (+1 258.93)

Hightights of December:

  • Portfolio goes up! +5.27% up since August. I’m expecting some correction in the beginning of the year. Biggest increase in on the emerging markets.
  • Got the final values of the rental apartment selling (+91k).

Assets:

Investment accounts

  • ETFs Portfolio: 23 549.05 € (+626.48)
  • Retirement Accounts (aka PPR): 14 033.51 € (+88.23)
  • Certificates Deposit + Emergency Fund: 122 447.17 € (+2 525.60)
  • P2P Portfolio: 15 426.14 € (-2 316.54)
  • Total Investment accounts: 180 460.67 € (+ 924.07)

Real Estate (Based on Market Values)

  • Primary Residency: 300 000 €
  • Rental property: 254 378.75 €
  • Farms: 70 000 €
  • Total Real Estate: 370 000€ (Removed Rental property)

Cars

  • Mr.Firecracker Car: 20 000 €
  • Mrs.Firecracker Car: 18 000 €
  • Scooter: 1 500 €
  • Total Cars: 39 500€ (=)

Total Assets: 589 960.67 € (-924.07)

Liabilities:

  • Primary Residency: 193 292.72 € (-334.86)
  • Farm: 0 € – Fully paid. Was in the same credit aggrement has the apartment.

Total Liabilities: 193 292.72 € (-334.86)

Our Networth drilldown looks like this:

You can follow our Networth status always here

Networth

Networth Update – 11/2019 (November)

In November we finally got the contract selling our Rental apartment! We diminished our actives but also our passive! We’ve also decided to increase our exposure to P2P increasing 2k more in Monethera.

Things seem to go in a good direction and we now sit in a pile of cash. To be honest the biggest amount we’ve ever own. Which means we will sit on it until we are confortable with the amount and only then apply it.

Summary:

Our Networth value for November is 395 409.02€ (+7 671.32)

Hightights of November:

  • Increased exposure to Monethera (+2k). Monethera seems like a pretty solid platform. Easy to use, good transparency on the companies and the projects are still getting in. In this uncertainty market its better to invest in P2P which have an actual business behind. If you would to invest, use my link win 5€ and 0.5% cashback.
  • Got the final values of the rental apartment selling (+91k).

Assets:

Investment accounts

  • ETFs Portfolio: 22 922.57 € (-117.14)
  • Retirement Accounts (aka PPR): 13 945.28 € (+456.33)
  • Certificates Deposit + Emergency Fund: 119 921.57 € (+91 053.09)
  • P2P Portfolio: 17 742.68 € (+2 150.65)
  • Total Investment accounts: 179 536.60 € (+93 542.93)

Real Estate (Based on Market Values)

  • Primary Residency: 300 000 €
  • Rental property: 254 378.75 €
  • Farms: 70 000 €
  • Total Real Estate: 370 000€ (Remover Rental property)

Cars

  • Mr.Firecracker Car: 20 000 €
  • Mrs.Firecracker Car: 18 000 €
  • Scooter: 1 500 €
  • Total Cars: 39 500€ (=)

Total Assets: 589 036.60 € (-160 835.82)

Liabilities:

  • Primary Residency: 193 627.58 € (-334.54)
  • Farm: 0 € – Fully paid. Was in the same credit aggrement has the apartment. (– 168 172.60)

Total Liabilities: 193 627.58 € (-168 507.14)

Our Networth drilldown looks like this:

You can follow our Networth status always here

Monthly Update – 11-2019 (November)

November. Events month for Lisbon. Post is again late since i was travelling :).

This month we had the websummit in Lisbon which is a major Tech event . Well they claim its “The best technology conference on the planet” and also the largest in Europe. I believe this year or last they had around 70k visitors. This is quite impressive. We happen to be returning from our vacations and i could do the check-in for the event in the airport. This saved me a lot of time since 70k people usually generate awfull queues.

Anyhow those were 4 tiring days with also many side events. Lots to learn. Additionally we have also sold our Rental property. Finally !!!

If you recall i’ve already announced the signaling here. This was a huge stress. Not only was the first time we sold an apartment but also some documents were missing on the day because we got married between buying and selling the apartment. What a mess. Since in Portugal most of the agencies dont talk with each other no way they could easilly find out if i was married, right?

I’ve also flown to Berlin for a couple of days attending a workshop. Unfortunately i flew with a cold and my ears didnt pop out after landing. What was a minor disconform transformed into a major annoiance for the next 2 workshop days. I felt i was under water for the whole time…

Coming back, same effect which led me to visit a doctor and find out i had Otitis in both ears 🙁 Otitis is basically an ear infection which was caused by my cold. Anyhow, i planned to attend an event on the day after but i had to rest the whole day. Time to rest is time to rest.

But enought with the talking, lets go to the numbers, here goes our November monthly update ! We will be focusing on the operational part. Income vs Expenses vs Savings rate.

Income

Salaries: 5 192.50 €

Expenses

Housing

  • Mortgages: 1 101.26 €
  • Insurance, Condominium, etc: 49.74 €
  • Utilities (Water, Lights, Gas, Internet, Phones): 218.66 €
  • Total Housing: 1 369.66 €

Cars

  • Fuel: 149.57 €
  • Maintenance: 56.80€
  • Insurances: 129.55 €
  • Transportation (parking, tolls): 76.85 €
  • Total Cars: 412.77 €

Health & Personal items

  • Consultations & Exams: 62.25 €
  • Clothing: 0 €
  • Total Health: 62.25 €

Food

  • Grosseries: 86.19 €
  • Eating-out: 573.35 € (Mrs.Firecracker celebration dinner for delivering her Master Thesis, finally selling the house dinner and some christmas dinners!)
  • Total Food: 659.54

Misc

  • Selling the house contracts costs: 271.38 €
  • Others: 135.97 € (Already some Christmas gifts)
  • Total Misc: 407.35 €

Total Spent: 2942.07 €
Budget for the Month: 3102.78 € (added 417€ for vacations)

Savings Rate

SR = ((Income – Expenses) / Income ) x 100 = (( 5 192.50 – 2 942.07) / 5 192.50 ) x 100 = 43.3 % or 2250.43 €

We have stayed below our monthly budget (yay!) We also increased i’m aware.

Next Steps

Next month we will finally some renovations inside the apartment that would increase our quality of living. We will also have christmas aaaaannd Christmas bonus !

Want to see how our Networth is going? Check here