This is a first report on this blog, therefore I am going to spend a bit more time explaining how I approached my way to achieving financial independence. But each section will get its detail in upcoming weeks. Do not worry.
I do not have monthly budgets. I even do not have annual budgets. I am simply bad in achieving any kind of budget. I focus on both revenue and costs in different ways. The only thing what I have is monthly balance sheet – sum of both our assets and liabilities and I track month on month the net profit/loss what we as family gain/lose. Let’s go into detail per each category.
Revenues – I turned my job into passion as I see a real meaning of it. This blog is anonymous, so I will not exactly tell what my job is. What I can write only is that the job has pretty close to IT development, banking, organisational behaviour and implementing common sense into big corporations. Most of my revenue comes from the salary and benefits we have. Second stream of revenue is capital gains on stock market, peer to peer lending, renting flats. The last stream of revenue is paying down my own mortgage on house where do we live.
On costs side we do not spent much. We own one car which is fully paid and is suitable for the family of three, I have a scooter for fast commuting, we do not have any maids/cleaning services etc, we home-cook a lot (I visit occasionally cooking courses as being in kitchen is one of my favourite hobbies) and as our little boy is almost 2 years old we do not travel much.
Overall we save 70% of my salary (when combining all three pillars of revenue). The plan (in my head) is to get to 100% of saving my salary in 2 years (actually 2,5 years) – by the end of 2021. It means that profit&loss-wise, we should be financially independent in 2,5 years. But not cash-flow-wise. I will get to this difference in some other posts.
So how did we ended-up in April?
Not that good. Overall +CZK 82.000 in profit, going down with debt by CZK 5.000 only. The major reason is that I had to much one-time costs this months – two teeth fixes, fees to lawyers and tax advisers, purchase of couple of tools for gardening (the finals ones and I will not need any for next 10 years). You can browse my balance sheet above, it shows major categories and the “y” axis is in CZK (we currently live in Czech Republic).
I also do calculate Financial Independence Index, which tells me on how many percents we are for having house paid off & certain monthly budget. I do have two versions, first for EUR 2.000 per month and second EUR 2.800 per month. The first is for having comfortable live, the latter than for having also enough financial resources for travelling. So the current ratios are 43,2% (+0,4%) and 32,3% (+0,3%).
The may should be better. I expect having a bonus salary, I should purchase a flat and hopefully as well sell the “property for sales” which you can see in histogram above.