More and more thematic funds are being released on us: from agriculture to solar energy. It's won't help you keep a simple portfolio, but if you are interested in dabling in other areas than a region-based portfolio and don't mind doing some futurology -yes that's a thing- I'd like to go over a few interesting options.
Post Series: Looking ahead
- 1.Looking ahead: 2019 personal finance
- 2.Looking ahead: 2020 personal finance
My second financial look ahead, this time for the year 2020, has the same idea as the last one. I want to share my expectations for this year and use this as the Kickstarter to create my targets or milestones.
Let us get this started with the main topics: my income and expenses. The two components needed to calculate my savings rate and that are the foundations to reach FIRE.
I started 2019 with a gross salary of 4,500.05 EUR and topped the year at 5,039.89 EUR. In other words, I received a salary increase of 539.84 EUR or 11.3175%. This gave me a net of 2,700 EUR to 2,800 EUR every month early in the year depending on holidays and some extra-legal benefits.
Having received a salary increase and because of a change in salary negotiation practices (reorganisation), I don’t foresee any major changes in my salary the coming year bar a sudden change of position or job.
What will change, and what I talked about in the past, is the salary car I will receive. I traded in some gross salary for this benefit. The net result is a decrease of about 300 EUR compared to 2019.
Substracting this loss from my income results in a range of 2,400 EUR – 2,500 EUR. To compensate for this decrease, I plan to do a Flexi-job. This should increase my net monthly salary by 350 – 500 EUR.
With no major changes, my main total yearly income should be around € 33,000 – € 36,000.
Monthly Savings Rate evolution
With both the income and expense side estimated, it’s easy to guesstimate my average Savings Rate (SR) for the coming year.
With a range for both my expected income and expenses I have the following table for my SR:
|Savings Rate range||Income|
The expected average SR for 2020 is thus between 54.54% and 70%. But I’ll play it a bit safer and aim for 50% on average for 2020 anticipating a few “surprise” expenses over the course of 2020.
My stretched ambition is to strive for an SR of 75% or higher. This will not be possible on more than one or two occasions but it’s something to reach nonetheless.
Saving and investment goals
If it’s possible to adhere to my self-imposed SR, I should be able to save some cash per month.
The problem is that I also need to put some aside for the apartment, just in case. If I get the average of my income range (€ 2,875), roughly € 1400 (2875×0.5=1437.5) will get split in the following way:
- € 1000 to my account for the apartment.
- Rest: remains in checkings account which allows me to remain flexible in regards to expenses or investment opportunities.
As you can read, I have to make quite a few assumptions. This is only natural since nobody can predict the future.
However, this shouldn’t prevent me from trying to reach my targets. I don’t think I have made it myself easy nor impossible given what I expect to come out of 2020.
Based on what I’ve written down here, I will create new milestones soon. Look forward to it!