If you are new to the blog and not familiar with our plan, you can find an overview here.
We had a great break over the holidays. I’m not really a Christmas person (I’ve been called the grinch more than once in the past), but now that we have young kids it’s so much fun and such a special occasion to enjoy with them. We also spent a lot of time relaxing at the beach, which was a nice way to finish the year.
My parents flew in from Europe on Christmas day, which was a fantastic surprise for the kids. If you follow flight prices, you are probably aware of how insane airfares are at the moment. I am glad that while my parents are very frugal overall, they have adopted a bit of a YOLO attitude when it comes to things like experiences and travelling to see the grandkids.
Work-wise things have been pretty interesting recently. There are some major shifts and changes going on at the company I work for part-time, and I’m not sure I’ll stay there much longer.
This part-time role has been a great mix of flexibility, autonomy, challenging projects, variety, decent pay and the opportunity to socialise. It has been an integral part of my portfolio career approach for a long time.
It sounds like with these changes, a lot of the things I like about my role (flexibility, autonomy and variety) are at risk. This would be a deal-breaker for me. I will watch things for a little while, but if it becomes evident that working conditions deteriorate (which is likely), I will leave.
I will take some time to consider my options and plan my next steps. I really like having some sort of job (even if it’s just two days per week) for its social factor and the structure it provides. However, I’m also questioning how employable I am these days – my bs detector is very strong, I have no patience for office politics and hate being micromanaged. So I’m not sure another job is the solution here (although I’ve toyed with the idea of joining a startup in the past).
I am grateful I am in a position where I don’t have to hang onto a job I no longer enjoy for the income. These are the kinds of situations where a solid financial foundation (including FU money!) and investment income really shine.
FIRE and Net Worth Update
Our Coast FI journey was definitely bumpy throughout 2022, and the last quarter was no exception.
I know that it was a year full of ups and downs for most investors. However, adding funds to your portfolio tends to smooth things out a bit. When you stop making contributions and start coasting, you definitely feel the bumps a lot more (just like people who have fully retired and live off their investment income do).
In Q4 of 2022, our FIRE portfolio went from 19.9x annual expenses down to 19.6x. This means we are just under 80% of the way to full Financial Independence:
Reminder: Instead of using dollar amounts, we display our net worth and portfolio value in years of living expenses. Real wealth is about time, not money, so I find this way of looking at things much more useful. I also increase our FIRE number with inflation on a quarterly basis to account for the ongoing living cost increases.
Interestingly, this is pretty much exactly where we were at the end of Q4 2021. So overall, our nest egg did very little in 2022. Our asset allocation definitely shifted over the course of the year, but the total portfolio growth was flat. This is actually a good result, considering how the market as a whole performed.
In retrospect, luck was also on our side in 2022. Halfway through the year, we sold some shares to pay for upcoming investment property repairs and renovations (roof replacement and more). It turns out this was actually a pretty good time to sell, considering the further declines during the rest of the year. In the end, the repairs (which dragged on for months) ended up costing less than expected, and we were left with a fair bit of cash inside the FIRE portfolio (which turned out to be a great asset class in 2022…).
Our overall net worth position increased from 23.3x annual expenses in Q4/2021 to 25.5x in Q4/2022. This total net worth figure includes our FIRE portfolio as well as all other funds and assets (like cash savings, kids’ investments, etc.).
We are preparing for a family mini-retirement in 2024, so we will increase our savings outside the FIRE portfolio over the next year or so. This will also come in handy if and when I decide to leave my part-time job.
And that’s it for our Q4 2022 update! 🙂