April 2020: Journey to Financial Freedom update

Welcome to Passive Income NZ, my Journey to Financial Independence. Every month I share how I am tracking towards financial freedom by providing you with an update of where my portfolio is at and how far I am from financial freedom, and how my spending is tracking. My definition of financial freedom is not really the same as everyone definition. It’s not to just stop working, it is much more than that. It’s about living a more intentional life.

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Focus on the positives

With everything going on around the world, I’d like to focus on some positives. I’m not trying to downplay the situation. I know the situation is quite negative, with people losing their lives and jobs. But sometimes, to get through, it pays to look at what you should be grateful for.

I’ve decided to try and use this once in a lifetime pandemic as an opportunity. There’s only so much negative news that I can consume- and for the most part- I can’t doing anything but stay home to improve the situation.

I know that I was one of these people fixate on the daily reports and tracking the numbers at first. Heck, I even downloaded the data and calculated the doubling time. (Which was about 9 days at the time, but thankfully- the spread has slowed down somewhat). What good was that doing?

So instead, here are some positives things I’ve experienced during a month of lock-down.

More Me time

Obviously- we have more time on our hands. More time to peruse hobbies and other activities- More Me time as I like to call it. The extra time has allowed me to finish woodworking projects that have been tucked away in the garage for years- and to read several books that I downloaded months ago- to finish plastering the ceiling. Not to mention that the garden looks better than ever.

At first, having so much free time made me anxious- what am I going to do all day- am I just going to sit around and surf the internet? At first, I had to write a list of task that I can tick off one by one to keep me busy. But now, I have settled into a good routine, and I’m quite happy letting myself read for the entire afternoon.

Before all this, I had a sense that I had to be busy all the time. I wouldn’t allow myself time to just be idle. Being idle is really good for your mental clarity- although that will change next week when I resume work full time.

More (virtual) Family Time

Last month, I said I would ring at least one friend or family member every day for the duration of the lockdown. and so far it’s been going great. I’ve had more real conversations than ever before- not just updates on the weather.

I’m going to try keep up my daily phone calls for as long as I can-or at least until I can go visit family and friends.

Slower pace of live

As I mentioned before- I had a few days of being anxious with all the free time and not having anything to do. But then we starting to get used to this new normal.  Once we accept these conditions are going to be with us for a while, it allows us to relax a bit.

We started to give ourselves permission to start living life at a slower pace. Not that we spent extra time watching TV in the evenings, and waking up later. Rather- time to have a relaxed breakfast with my partner not having to worry about leaving at a certain time to beat the traffic. basically just stop the rat race culture.

And that’s been a big win for our happiness and mental health. 

More Time to Exercise

Maybe it’s an excuse to get out of the house. Maybe its the start of a new routine.

The lockdown has given me time for daily exercise. And I don’t think I’m the only one. Our local park, which has many bush trails, has been busier than ever. And for the most part, there are many new faces that I don’t recognise.

Before the lockdown, we would go for a run or walk at least several times a week as long as we got home before dark. Now- its become a non-negotiable daily exercise routine. And it’s not just exerciser, we have been getting better sleep, and plenty of decent home-cooked meals.

Time to Learn

I’m a lifelong learner. If I don’t understand something I tend to do a lot of research. I also like to learn as a source of entertainment. I like learning about new concepts and ideas. The lockdown has given me more time to learn.

Along with reading and listening to podcasts, I’ve been watching The Citizens Handbook hosted by Robbie Nicol. It’s a comedy Video and Podcast civics series that tackles NZ history & issues. History, politics, law, economics, and international relations, all wrapped up in an entertaining format.

Below is Episode 9 is about managing the economy– It’s quite a refreshingly simple look at how the market works, the reserve bank, inflation, and taxes. But if you think you’re interested in the entire series, I’d suggest starting from the beginning.

Personal Finance

If the lockdown and everything else hasn’t convinced you that you need an emergency fund, then I don’t think anything will. I was convinced that I need a more robust emergency fund in the future– And I think that is positive.

The second is that the entire experience has really clarified what our wants are, and what our needs are. In fact- apart from our groceries we’ve discovered that we don’t really need anything at all. If anything- we’ve realised we have too much stuff.

Thirdly, it was easy to keep our money in order since we didn’t spend much at all. It’s actually quite hard to even spend money right now. And my bank balance has noticed. However, I do think I will be spending a bit at local cafes and stores to do my bit in helping them out once lockdown has ended.

There are definitely more positives too, the environment is winning with fewer cars on the road, the sense of community has increased, people are more grateful, and the world is coming together to fight a common enemy. Oh, and share prices are down… does that count as a positive???


Investment Update

I’m running out of ideas on how to keep these investment updates interesting. See, when you subscribe to a long term investing strategy using dollar-cost averaging, investing become quite boring and routine. And I love it that way- I can get on with my life and let my money do it’s thing without me intervening.

I continue to use dollar-cost averaging automatically after every pay cycle. And I continue to invest in the same funds. The funds that I am currently invested in remain the same;

  • Vanguard International Shares Select Exclusions Index Fund
  • Vanguard Intl Shares Select Exclusions Index Fund – NZD Hedged
  • AMP Capital NZ Shares Index Fund
  • AMP Capital Australasian Property Index Fund
  • AMP Capital All Country Global Shares Index Fund
  • Smartshares – US 500 Fund (NS) (USF)

Asset allocation

  • Australasian Shares: 21% (+1%)
  • International Shares: 39% (+2%)
  • US shares: 4%
  • Total Shares: 64%
  • Kiwisaver: 12%
  • Peer to Peer Lending: 7% (-3%)
  • Listed Property: 15% (+1%)
  • Bonds: 0% (-1%)
  • Cash: 2% (-2%)
New Zealand Personal Finance and Investing blog, all about Money budgeting debt credit cards and insurance for Kiwis NZ

Performance

The big drops in returns that I saw in March have decreased somewhat in April- with many of my investment returns back in the green. Although I expect to see some more turbulence in the coming months.

  • InvestNow: -2.68% (+6.61)
  • Genesis Energy: -3.41% (+7.56)
  • Kiwisaver: -10.94% (+8.27)
  • Lending Crowd: 11.47% (-0.01)
  • Harmoney: 10.31% (+0.01)

InvestNow: Returns from assets I hold are after fees and before tax for the last 12 months. Genesis Energy: Returns from capital gain and dividends in the last year. Calculated using Sharesight. Kiwisaver: Performance for the last year after fees and after-tax and membership fees. Lending Crowd: Net average return (NAR) is a calculated annualised return for your investment portfolio that’s calculated monthly on the 1st day of each month. Harmoney: Realised Annual Return (RAR) is a measure of the actual rate of return on funds invested in the Harmoney platform.

Goals

Road to 100K by December 2019

It’s been a wild ride over the last few months. February was a record loss month, then March topped that loss and then some. And now in April, I had a record gain, which saw my investments hit 100k again. I guess that is why you shouldn’t monitor your investments this often.

New Zealand Personal Finance and Investing blog, all about Money budgeting debt credit cards and insurance for Kiwis NZ

That’s it for April. What do you think? Has anything about this lock-down been positive for you?


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