NB: to my American readers, to convert £ into $, simply multiply by 1.4.
I have added two metrics into the progress summary:
- WB40 ratio = Total Income / £60,000 (this is my WealthyBy40 financial goal which is to generate £60,00 of monthly income by 40)
- Saving rate = Total savings / Total income
Currently my total savings are comprised off:
- Mortgage capital repayment (which increases my equity in the property and adds to my net worth)
- Personal emergency account
- Family emergency contribution
- Self Invested Personal Pension (SIPP)
- SIPP tax rebate
- Brokerage account
- Dividend and interested income not paid out
1. Pay rise – SORT OF
This has happened and the outcome was somewhat different to what I expected. You can read about the story here but in essence, I got a much smaller-than-expected base pay rise but a much larger performance-related bonus. An added benefit of not completely realising my goal here is that I get to write about it throughout the year as/when my bonus gets paid, instead of just a dull line crossing it off my list.
Thanks to a change in my tax code as a result of the government increasing my personal tax-free allowance by £350 to £11,850 per year, my net pay has increased slightly to just over £3,400. It’s getting a step closer to my £3,500 per month goal however for entirely the wrong reason.
The key lesson here is that you need to be creating your own income stream and thus be able to live on your own terms.
2. Rent increase – COMPLETED
Done and dusted in January. Reached the £2,500 per month target. Want to know more? Find out here.
3. Increase dividend income by £100 per month – SORT OF
April has been an OK month for dividend as I received £162 from 3 different stocks.
- My average monthly dividend income was £228 in 2017;
- However my Q4 2017 dividend income was averaging at £317 per month because I invested in a few high-yield shares ;
- Looking at Q1 2018, it was averaging at £354 per month due to dividend hikes and favourable FX rate;
Depending on the definition of whether to take the full-year 2017 average monthly dividend or Q4 2017 monthly average, I had already achieved the goal of increasing it by £100 per month.
However I plan to set the Q4 2017 as my starting point therefore it I need to be averaging at the £420 mark per month to achieve the goal.
I am getting very close and I bought another high-yield share in April which I believe will push me over the mark.
4. Develop another source of income – COMPLETED
In Q1 this year, I developed a side hustle as a freelance management consultant on Upwork which netted me $3,307 in total.
I received a further $33 (£24) this month, which really belonged to a March invoice so I will recognise the revenue in Q1 but treat it as an April earning.
I love Upwork. I think it’s flexible, easy to start and convenient. The projects on there can be interesting as well. You can read about my experience here.
The downside of this was that I simply did not have sufficient time to take on additional projects. Realistically I only had around 6 hours during the weekday and 10 hours at weekends and that’s simply insufficient for bidding, interviewing as well as consulting. Furthermore with the coming of WB40 Junior, I want to devote time to him rather than sitting in front of my laptop bidding for projects. This is why I am leaving Upwork because
I simply want to stop trading my time for money.
5. Save £20,000 into ISA – COMPLETED
6. Save £800 into SIPP per month – COMPLETED
For those of you unfamiliar with SIPP (Self Invested Personal Pension), it’s a self saving retirement investment account in the U.K., similar to Roth IRA in the US. I will do a review of it shortly but the key benefit is that all incomes and capitals gains are tax exempt until withdrawal and each contribution will attract an automatic 20% tax credit in the form of account balance top up and depending on your tax situation, a further 20-25% tax refund at the end of each tax year that can be used with discretion.
I made my first £800 contribution in February and I am still on track. Furthermore I have decided to set up an additional £150 monthly saving to my brokerage account in order to increase my saving rate further.
7. Have a baby – YES
8. Blog twice a week on WB40 – YES
I managed to publish 10 blog posts in April, which as promised was a significant improvement compared to March.
Another exciting project which I completed in April was to migrate my entire (albeit relatively young) blog from Wix to WordPress, which means I can now customise and build a site that truly reflects the identity of WealthBy40.
Don’t expect to see magical change overnight though. I am still getting used to WP so nothing will be perfect. Such is life 🙂
9. Have a tropical holiday with my family – NO
10. Do 2 office-station runs per week – NO
A decent month. Good progress on getting to the bottom of the dividend mystery and the imminent completion of the secret side hustle project which will hopefully enhance the WB40 ratio.
How are your 2018 goals progressing? Please comment away.