Financial Statement – January

Savings rate = 45%

Total net worth increase = + 9,905 EUR

My increase in net worth is mostly due to an adjustment I made on my pension and not related to any “real” increase. I was very conservative about the amount of taxes I would pay if I decide to retrieve the cash from my pension account and I have adjusted that this month. This adjustment represents a 3,6k increase in my pension value.

I got a small salary increase and a small bonus. Unfortunately, the small bonus went almost entirely to pay for the adjustment of costs than landlords in Germany do on a yearly basis + some furniture we bought for baby #2, which will come at the end of March (very exciting!). So yes, even with a salary increase and a bonus, our savings rate was lower than usual.

Cash 11,500 +1,850
Net Cash flow Real Estate Business 3,200 +100
Pensions 96,730 +5,270
Security deposit for current house 2,000 -500
Rental Property #1 115,000 +0
Rental Property #2 120,000 +0
Debt (Bank) -9,520 +3,185
Total networth 338,910 +9,905

I am now 38% FI πŸ™‚

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Financial Statement – December

Savings rate = 49%

Total net worth increase = + 6,655 EUR

December was not an amazing month as our savings rate went down mostly due to gifts and money spent going out with friends and family. We could have though about ways of being more frugal but we were a bit lazy this Christmas to do it!

We still manage to pay off our debt and to increase our cash reserves, so overall not bad. However, it is low season for our short-term real estate business and therefore it only yield 600 Eur.

Cash 9,650 +1,300
Net Cash flow Real Estate Business 3,100 +600
Pensions 91,460 +1,570
Security deposit for current house 2,500 0
Rental Property #1 115,000 0
Rental Property #2 120,000 0
Debt (Bank) -12,705 +3,185
Total networth 329,005 +6,655

This is lower than my expectation but hopefully next month, with a salary increase and a small bonus, the goal of growing my networth by 8k every month will be real again πŸ™‚

Financial Statement – November

November: another great month!

Savings rate = 57%

Total net worth increase = + 8,445 EUR

This is great to compensate the crazy month of December. Even though I try to be frugal, I always end up buying a few things for some family members that would take it wrong if no gifts are exchanged + I go back to my home country and I met with so many people I haven’t seen for ages, which means I end up spending way more than normal on lunches/brunches and dinners.

Cash 8,350 +2,400
Net Cash flow Real Estate Business 2,500 +1,300
Pensions 89,890 +1,560
Security deposit for current house 2,500 0
Rental Property #1 115,000 0
Rental Property #2 120,000 0
Debt (Bank) -15,890 +3,185
Total networth 322,350 +8,445

I am now 36% FI πŸ™‚

Financial Statement – October

October was a very exciting month! We were able to grow our net worth by 9.285 Eur, which is the maximum we have been able to do so far. There were a couple of reasons for this success:

  • Our savings rate was 57%, which is probably the highest value so far. I calculate our savings rate based on our salaries and I do not consider the cash-flow yield by our real estate business. No big or unexpected expenses this month!
  • I have adjusted the value of our rental properties and increased the overall value by 2000 Eur. Still, the values I consider are at least 20% below market value, but I want to be on the safe side here in case of a market crash. To compensate for this, I have decreased by 1000 Eur the money we expect to receive when we leave our current flat. Due to our baby, the flat is not as in good shape as it should, I am assuming we need to spend some money arranging the walls and the floor before we leave (2500 Eur is my current estimation).
  • Our real estate cash-flow has yield us 1.200 Eur net, which is amazing especially taking into account that we have hardly any work and it is not high season anymore.

 

Cash 5,950
Net Cash flow Real Estate Business 1,200
Pensions 88,330
Security deposit for current house 2,500
Rental Property #1 115,000
Rental Property #2 120,000
Debt (Bank) -19,075
Total networth 313,905

I am 35% FI (still 65% to go!). Seems like a lot but I think the hardest work is done, which is to get enough cash that allows you to start investing and creating passive income. In our case, passive income is generated through real estate but you can of course decide on what products suit you the best.

Currently, I am having another dilemma: invest the money we are saving or save it and buy a property for us to live in the future?

Financial Statement – September

It’s been a while I don’t update my financial statements (last time was in May!) and many things happened during this period:

  • I stopped investing in Peer to Peer: it yields me less cash flow than my rental properties and I believe that once the economy turns around many of these debtors will not be able to repay the loans. It will probably not happen now but I think it will at some point.
  • I have established a proper company to manage my 2 rental properties that are currently rented for tourists. It is more efficient in terms of taxes.
Cash 3,600
Peer to Peer 0
Pensions 86,780
Security deposit for current house 3,500
Rental Property #1 100,000
Rental Property #2 133,000
Debt (Bank) -22,260
Total networth 304,620

My net worth has actually increased very little from May to September, less than 24k. This is due to the fact that we bought a second house and had to pay extra taxes, which we do not count as equity, and also the fact that we bought furniture for the new apartment and I do not account for that either in my net worth calculation. I have also decreased by 500 Euros the amount of security deposit for the current house. In general, I prefer to be on the conservative side.

From now on, as no costs related to the business/rental properties are expected, apart from the recurrent ones, we should be able to keep up with the 50% savings rate on our salaries and hopefully increase our net worth by around 8k every month. We now have income from our salaries + passive income from 2 rental properties. Our 2 rental properties should yield between 400 and 1800 net per month, depending on the season, which is very exciting.

Now that we are having extra cash and real estate prices are completely crazy, where shall we invest? I am thinking index funds dividend related. What is your view?

Financial Statement – May

Even though our savings rate was not great (48%) we managed to take care of many things related to Property #2. We will pay it completely over the next couple of days/weeks, therefore I have already excluded the cash we are about to pay from the Cash category.

Cash 600
Peer to Peer 863
Pensions 78,030
Security deposit for current house 4,000
Rental Property #1 100,000
Rental Property #2 133,000
Debt (Bank) -35,000
Total networth 281,493

Very soon I will update you on the real numbers of my first real estate investmentΒ which is yielding more than what I had previously calculated!

Financial Statement – April

We had an increase of +6.6k in net worth which I am pretty happy about! Plus, this month we had an additional cost of 0.8k because my husband purchased the monthly transportation ticket and, even so, we managed to save a lot!

Cash 55,800
Peer to Peer 858
Pensions 76,540
Security deposit for current house 4,000
Rental Property #1 100,000
Rental Property #2 133,000
Debt (Rental Property #2) -94,000
Total networth 276,198

Savings rate = 53%

Our savings rate is not great and we could definitely improve it. It is amazing what you find out when you really start computing the figures! I would have guessed that my savings rate is around 60/70%.

Even though we are saving 6.6k, we are still spending 5.9k a month which sounds like a lot (and it is!). Almost 40% of that is on rent which we are not willing to compromise because 1) we love our apartment and it is quite cheap for the type of apartment/area in which we live 2) is it very convenient/time saving that both of us live close to work and to the creche 3) additional costs when moving into a different apartment.

My husband is not very keen on tracking expenses and for the sake of my marriage I have decided not to force him to πŸ™‚ He is relatively frugal by nature and willing to engage in actions that allow us to save more money but he does not want to track every single expense. I get it and accept it.Β This month we have decided that from now on we will go to the cheaper/discounter supermarket at least twice a month. I am not really sure but I would say that our second most significant expense is groceries, as I think we spend more than 500 Euros in supermarket on a monthly basis. I hope we can go down by 100 or 200 Euros.

Very soon we will be buying Rental Property #2 and hopefully have it ready to rent it to tourists before August. Read more about our strategies in my previous post on Rental Property #1. I still cannot believe how much we have achieved in the last 3 years, from only slightly above 0 in net worth to almost 300k and from 0 properties to almost 2!