We’re now 2 months into officially ‘blogging’ about FI! (Sounds a little ridiculous I know as 2 months in the grand scheme of saving towards financial independence is like a fart in the ocean :D!). My god it does seem that time is whizzing past me however – it feels like I’ve only just finished January’s financial update! February has been an incredibly busy month work wise, with new clients, growth and employment (a few new peeps joined the business bringing the total now up to 12), we’re making excellent headway with the personal financial journey!
Income & Savings Rates
As I’ve mentioned previously in my last financial update, my income is different to that of the PAYE salaries. My combined LTD company dividends, salary and MB (oh yes, I did achieve a few hundred squid – super proud of this as I’m a total newcomer to the scene) came ?11,850 for the month. These aren’t dividends from investments, but dividends from the business I run. Of this, I’ve invested ?6,734 into my investment accounts and ?150 into my SIPP bringing my total savings rate to 58% for the month! .?Whoop! I’m chuffed about this as February led to some pretty substantial expenses particularly involving car maintenance / MOT’s which I’ll come on to later. If these one-off costs didn’t exist, I would’ve achieved a savings rate of 82%! Bah bloody cars! So far so good as my original goal I’ve outlined on My Goals page was to meet a savings rate of 45% (I may need to revisit this as I do like to keep pushing myself and if I move this goal to 60%, I’ll be focusing on a goal that is just in front of me).
(PS – Whilst I remember, is anyone else looking out for Vanguard’s SIPP when they finally release it? It has been delayed again this year)
My Vanguard Account which is now only one payment away (?1,666) to meeting the ?20,000 2018/2019 ISA limit is on track (one of my goals is to max out my S&S ISA) by April-19.
It’s difficult to tell on the graphs (I will eventually work this data into Google Studio once I’ve got the know how / time) but the green lines represent the actual value and the red lines represents the book cost (I.E. What I’ve put into each account). I’m pleased to report that on both my Stocks & Shares portfolio and my S&S ISA, that both are now returning more than what I’ve put in! Finally! I wasn’t particularly too concerned about this, because I’m looking at a long-term, buy and hold based strategy. I don’t see myself good enough to do the whole ‘active investment’ / ‘live strategy’ type stuff that others are involved in bar from the ‘Dogs of the FTSE’ based strategy that is popular among Dividend Investors.
My Vanguard account is now showing an 8% gain on my investments and my IG statement is showing 0.88% increase! A gain is a gain in my eyes! Still, the majority of my Stocks and Shares are in Carnival PLC (Cruise Ship Company) – not so much for financial independence, but to receive spending money on the next cruise holiday we go on (me and my partner are into the cruises – it’s fantastic and we absolutely love it!).
In total, the value of all of my investments in January-19 was ?17,919 – in February-19 we’re now sitting at ?25,889.
This month, my expenses have been pretty significant in my eyes. For ease of ‘administration’ I have both cars MOT’d and Service’d in February of each year – it’s a bit of a kick in the balls to see so much go out during this month (amongst car insurance / other things I renew) but it helps me prepare / understand that ‘February’ isn’t the month to be expecting high saving rates! It means that after February (the expense month!) I know that it’s relatively plain sailing from here on in as I don’t have any significant renewals to consider. Even my Mortgage plan expires February 2020!
Anyway, in total my expenses were in total ?4,189 for February. Aye aye aye – it feels hard to write this given that 25% of this was on bloody cars! Over ?1,400 were spent on both cars getting them through the MOT’s and Service. I’m seriously considering the purchasing of a Hybrid (Mitsubishi Outlander – 2nd hand of course) or an old car and just running that into the ground. I currently drive a fuel guzzling 3.0 TDV6 Range Rover Sport – bought in the days that I actually cared about the car I drove, self appearance and all that. I’m so glad that the FIRE lifestyle has made me think twice about all of this. With two dogs as well which are transported around every-day and living in the country, I did have a valid excuse however! Now-a-days, wising up and not really giving a care about cars (realising that they are categorically a massive waste of money), I’m seriously considering of getting rid of this. However all the blogs I’ve read regarding the purchase of a new car always boils down to one answer – most of the time, buying a new car costs more than keeping your current car and running it into the ground. I shall report back later with what I do with the car but the costs have dented my FIRE journey!
I also had a bit of a credit card bill to fork out over ?1,000 which also ate away at those all important savings rate! Car Insurance also totaled up to ?800 of the year. The rest of the expenses were attributed to one-off costs such as travel / events and a few other bits and pieces. These really are one off costs and I don’t envisage them to re-appear at anytime soon. I’m certainly no whizz expert when it comes to financial tracking such as Andy over at theFIREStarter blog who has it down to a fine art of those all important outgoings! (The spreadsheet that I assume he’s built is very advanced and analytical!).
In my last financial update post, I had mentioned how I’ve been cost cutting / working on reducing unnecessary expenses. Well, these have of course transpired into February and my god what a difference it makes! Simply by making lunch at home and using the slow-cooker to death (100% 100% 100% rate that – I use the Sage by Heston Blumenthal the Fast Slow Cooker Pro?which is simply the best?’all-in-one’ slow cooker / pressure cooker out on the market), I’ve easily saved ?120 – ?150 per month on lunches alone! (Given the cost of the SAGE Fast Slow Pro it has paid more itself almost double in the last 2 months alone! A definite purchase in my eyes).
You can see that I’m starting to include Water / Council Tax on the expense tracking sheet (which is currently paid by the other half). I think going forward, what we’re going to do is run everything through my bank account and then my other half, cover the costs of this is the form of a bank transfer each month. This way at-least, I can account for these costs in my Financial Journey going forward. The Loan (Zopa) basically meets the payment of our council tax and water and I don’t anticipate to have that Loan forever, so this is why I’ve been a bit slack on this so far as in the grand scheme of things, the Zopa Loan covers the cost of council tax / water.
All in all though, a relatively straight forward month in regards to the other expenses (standard electricity / oil / mortgage payments etc).
Ooo! I almost forgot! Look at those insurance expenses! Oh yes, my original moan about how much I was spending on insurances led me to bring this to light in the form of going on Confused.com through TopCashBack and signing up for new policies. My god, there is definitely no such this as loyalty these days – churn and burn when it comes to insurances that’s for sure!
Special thanks to various members on the Pursue FIRE Slack Channel – Santiago, theFIREStarter, Red Turtle, Pursue FIRE (Dan), Weenie, Adam, David B to name a few for all the input on their experiences with MB. There’s some fantastic things to learn about EW and as a community, fantastic to speak with people who are so friendly / kind with their advice.
In total, my profit for MB this month is ?220 which I’m pretty proud of considering on the last day of February I lost ?228 in total with a bad days racing! (Bah!) – Anyway, I can’t complain – a profit is a profit at the end of the day and I’m looking forward to what March will bring going forward.
I’ve also got a few bank balances to swap / change around – some bookies that have won more than others have led to bigger bank balances (this will be a task that I’ll do in first week of March).
Amazon Affiliate Store
Hoorah! It is now live! (Albeit a few content changes and mobile optimisation tweaks that I need to make) – Welcome to the Cement Shop! (https://www.cementshop.co.uk) – Providing all of your necessary needs and requirements for Cement Mixing! Why have I chosen to do this? Well Cement Mixers specifically are a product category that is relatively low competition – there isn’t really any other shop / seller in the UK that provides these as a stand-alone product. You can hire / buy them from various places such as B&Q, but B&Q provide a whole range of other home / commercial based products.
This is where Google, should pay me dividends in this regard – My website is only relevant towards the term ‘Cement Mixers’ (and various other permutations). So really where do we go from here? Well it’s now time to get the blessed thing ranking highly on Google! Here’s the results so far… (unsurpising as the site has only just been indexed by Googlebot);
Hopefully the table above is self-explanatory. The first column (# of Searches) is the amount of people in the UK searching for the phrase listed in column 2 (keyword). The 3rd column is Google Rank. Funnily enough (at no surprise) we aren’t anywhere to be seen (yet!). Of course, if someone fully knew Google’s algorithm inside and out, they sure wouldn’t need to be working that’s for sure!
You can see that some of the phrases above have some relatively healthy search frequency – particularly ‘belle cement mixer‘ which is one of the products listed on the website for ?700+. A tasty ?53 Amazon commission earned of this product alone per sale and with 3,370 people searching for this phrase in the UK, the opportunity is sure available.
In-fact – let’s apply some basic search trend behaviour.
Achieving a ranking position of between 1 to 3 achieves an average click through rate (CTR) of 33%. Therefore, out of the 3,370 people searching this phrase, upon the website achieving good organic ranking, we would anticipate 1,112 visitors to visit that one page alone. Based on that, we can apply a conversion value taken from other construction based ecommerce websites. On average, the construction industry see’s an average conversion rate of 2% (which is a little higher than I was expecting). This means for every 100 visitors, 2 visitors are likely to buy something from you. Therefore, bringing together our estimation of 1,112 figures, upon achieving organic ranking for this phrase, we would anticipate 22 sales per month (using a 2% conversion value).
Not bad… (as long as we can secure high rankings for this phrase). In terms of monetary value, that’ll result in total Amazon commission, each month of ?1,166 (?53 Amazon commission x 22 sales)! Now we’re talking! Of course, this is the idea – now to prove principle! Also this only reflects just one search phrase – by combining all of the search frequencies for all of the phrases listed above, we could be talking some serious numbers here.
Anyway – not to get too carried away! I’ll be recording progress on the website, various updates / changes along with Amazon figures going forward! Onwards and upwards!