April has just come to pass. It’s the month where Spring is in full swing and where we get lots of Easter chocolate. It also brought me my profit participation which is a cool €2,701. Thanks to this additional income I could transfer the last €7,000 needed to reach a financial milestone I set for myself.
To be frank, at the beginning of the year I thought the €12,500 would be too low since I figured I could save a lot more. It’s clear I was wrong. As I started to (finally) look into living on my own through the purchase of a house I knew I had to limit the deposits to my investments account. I already have some money saved up in a savings account but it’s not enough to cover the min. preferred down payment by banks, i.e., 10% – 20% of the total price.
Since I’m looking in the €300,000 range for a house, I should save at least €30,000. With only €12,500 accumulated, I still need at least €17,500 by the end of the year. To reach that I need to stick to my target SR of 75% because doing so would give me ((2,850 – 712.5) x 8) + 2,200 EUR = €19,300.
Having that calculation in mind, €12,500 is really the limit of my deposits. I’m overjoyed I reached it and thanks to this final amount I can achieve my dividend target of €200.
I’ll now focus on my SR to reach that min. 10% down payment and thus keeping my Loan-to-Value Ratio (LVR) between 90% to 80%.
Next financial milestone: dividends!
With this first financial milestone reached, I can now look at the second one linked to my portfolio, which is a dividend income of €200. As I reported earlier, as of the income year 2018, it’s possible to get a tax refund on €640 worth of dividends.
I’m not there yet and while it’s not something I must reach, I see it a nice bonus. So if there are opportunities to buy more of my ETF’s or REIT’s that provide a nice dividend, I won’t shy away from it.
Finally, I have my average SR of 75% that I should aim for. I sit at 56.13% which makes it near impossible to get an average of 75% for the year in the next 8 months. Of course, I’ll save as much as possible but reality will hinder me. Time will tell. I can at least aim for an average of 75% for the next 8 months to get enough saved to get the min. 90% LVR.
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