Personal Finance Report For October 2020
At the end of October 2020, I had $31,526.47 in assets spread across 4 major sites:
Ally Bank: $4746.87
This is the first time I’m sharing my actual numbers for my personal finances so please be nice 🙂
See the pie graph below for the breakdown
Not Going to Count Ally Bank
I don’t want to count Ally Bank as part of my assets.
Because I use Ally Bank as a place to store money for emergencies, rent, and any other repetitive monthly expenses.
I don’t view them as income generating assets like I do with stocks and mutual funds.
So if we minus the $4746.87 from Ally Bank from the equation, I have:
For a total assets of $26,779.60.
What Was My 2020 Assets Goal?
My 2020 personal finance goal was to have $25,000 in investments by end of year December 31st, 2020.
But you can see that by October 2020 I had already surpassed that goal.
Because I kept buying when the stock market was down more than 50% during the beginning of Covid-19 quarantine, I managed to buy into stocks and mutual funds below their 52 week average price.
This helped raise my year-to-date asset worth after the stock market rose more than 50%-100% from it’s dip back in March 2020.
Back in April 2020 when the government released the $1200 stimulus check, I wrote about what I did with it.
$1000 into Ally Bank.
$100 into Vanguard.
$100 into stocks.
If it weren’t for the stimulus check, I might not be as close to my $25,000 year end goal.
I’m thankful that I surpassed my year-end goal.
For the rest of November and December 2020, I’m doing side-hustles while working 70-80 hour weeks.
I aim to put away majority of my income.
The goal for the rest of 2020 is to see if I can reach $30,000 in invested assets.
The stretch goal is $60,000 in invested assets.
For 2021, I’m aiming to have $60,000 in invested assets by end of year.
2022, I’m aiming for $120,000 by end of year.
2023, $240,000 by end of year.
2024, $580,000 by end of year.
2025, I will have reached the million dollar mark and officially FIRE.
Then it’s take a vacation, relax, and pivot for the next stage of my life.
Aim to make the world a better place to live in through philanthropy and starting a new business.
As if I would ever rest forever lol.
I’m definitely aiming to leave the world a better place than I found it.
How Am I Going to Reach My Annual Goals?
They say the first hundred thousand dollars is the hardest.
And I can understand why.
It feels like I am a long way away from that but if I just keep putting every single dollar into investments, and constantly look for ways to save and invest while also growing my income, then I know I will reach it.
I’m not going to make the mistakes that some FIRE people made where they sacrificed their health in order to work super hard to reach FIRE faster.
I pay for a gym membership so I can stay fit.
I got the Apple Watch Series 6 so I can record my workouts.
It helps keep me motivated with audiobooks and podcasts for my jogs without a bulky iphone weighing me down.
My girlfriend and I are starting an ecommerce business where I think it could generate about $300,000 in gross revenue annually within the first couple of years.
My current business that I started a year and a half ago is generating about $350,000 in annual gross revenue.
I aim to grow that revenue through social media engagement and increasing the value we provide to customers.
If everything is growing, I should be able to pay myself more and invest majority of it to reach FIRE faster.
Before you say anything about greed, corporate bullshit blah blah, just know that there was a period of time where I didn’t even pay myself because my business was just starting up and we didn’t have enough money to pay me nor my girlfriend.
We made sure the staff were paid well, but we knew better than to pay ourselves because we needed our staff to get the business up and running.
So I would work 12 hours from morning till night, then go drive Uber till midnight or beyond to make enough money to pay the rent.
Note on Expenses, Income, and Investing Rate For October 2020
The reason why I don’t show my expenses is because at this point they’re kind of moot.
My monthly expenses don’t really change much from $300-400 a month for basic living and other things like eating out.
The rent for our apartment is $1200 a month and my girlfriend and I split that evenly.
So rent is $600 a month for me on top of the approximate $400 in other expenses, for a total of about $1000 a month.
I am currently paying myself about $500 gross income a week, with an after tax direct deposit of about $400/week.
Notice for the amount of hours I put in, I am severely underpaying myself compared to the rest of my staff.
This is because because I want my business to succeed, so I make the necessary sacrifices.
That brings my monthly after-tax income for a 4-week month to about $1600.
Note: if my expenses are about $1000 a month, and I make about $1600 a month, then I am able to put away about $600 a month.
This means my savings/investment rate is about $600/$1600 = ~38%.
October 2020 Savings rate = ~38%.
That is definitely too low for my liking and I will aim to raise it in the coming months.
How I aim To Raise My Savings Rate
These are just some ideas with how I aim to raise my savings rate so I can invest more to reach FIRE faster.
Increase the amount of sales coming in through my primary business in order to pay down more debt and also pay myself more.
Increase the amount of side-hustling I do.
The only issue with side-hustles is because they are time-based, I only have 24 hours in a day.
Trading time for dollars is never ideal but it gets me some money to invest into mutual funds to gather passive income via dividends toward FIRE.
So it’s like a deal with the devil.
Trade some time now to make money to invest, in order to get time later.
Conclusion: I can Do It
Having gone through that period of struggle, I found that I’m now able to work even harder without getting tired as easily.
Meaning, I’ve built up some tolerance for working 70-80 hour weeks and living on almost nothing in order to survive.
This means that I can channel, and am still currently channeling, that inner fire to achieve my outer FIRE.