Q1 2023 F.I.R.E. update

[gracer]

I posted a yearly update at the end of 2022 on our journey to F.I.R.E. in South Africa. I was going through some stuff today and thought I might as well do this quarterly for whoever enjoys reading these types of posts.

See orignal post for context but shortly:

Age 26

Nett worth start 2023: R2m

Aiming for nett worth end of 2023: R3.5m

So these last few months have been quite flat. Most of our investments are in ETFs and those are just stagnating. This was more or less expected.

We increased our exposure to the Peregrine Hedge fund and added most of our money to real estate loan payments. Instead of doing a lump sum into our TFSAs I opted to DCA this year because I'm still not convinced that the markets are going move up significantly.

On top of everything the Rand is absolute trash due to our Eskom worries and a strong dollar.

Big winners this quarter: Alibaba up around 40%,

Tungela up around 25% when profits were taken

We don't have a lot of money in individual stocks, exception being Alibaba bought at around $75/share.

Nett worth currently: R2.43m

Currently happy with our trajection despite the poor market returns.

Plan for Q2: Mostly focus on the loans are interest rates are quite steep.

Hope I gave some of you a pleasurable read and will probably do a Q2 update early July.

(Edit: fixed my previous post)

 

[vancouverguy]

@gracer Good going on Tungela. Cyclic markets in resources are risky but you got out ahead.

I didn't have the guts for Alibaba after the Chinese regulation worries.

Your rate of accumulation is high, planning to add 1.5 bar to NW under 30 from income is a great position to be in. Keep it up and avoid the lifestyle creep as much as you can while still enjoying your life

 

[valerie2017]

@gracer Thank you for the post OP.

Just went through both of your posts and still craving more lol.
We actually do need a r/FIREza subreddit.

I've made a post regarding advice on my investment plan a few hours back as well.
Could you perhaps take a look and share some knowledge if you don't mind?

 

[gracer]

@valerie2017 Saw your post.

For TFSA I only recommend CoreShares Total World ETF. I do get that some people want to invest in Satrix 40 as dividends aren't taxed in the TFSA, and thats fine if you don't plan on having a RA.

But if your income tax bracket is above around 32% then the RA becomes your friend. BUT I'd max out my RA until I'm about 32 because if your income there becomes too high then your going to pay that 45% income tax on it anyways one day. Aim is to get some income from it, pay say 30% income tax and rest of your investments cover the rest of your expenses. That way you really score with RAs.

There is a very nice retirement annuity calculator on I think Simon Browns website, check that out. Recommend Sygnia Skeleton Fund.

Before maxing RA definitely do the Emergency fund. Intrest income is exempt from tax for the first R22k you get so definitely a nice addon.

Other investing funds just do broad market ETFs. If you have high risk money put some into a hedge fund, these can make you a lot of money bit also lose a lot on fees on downturns.

Otherwise just don't sell those broad market EFTs and keep on investing. It's not hard getting rich if your income is above R40k post tax and you gave a solid plan with some patience. I'd just recommend making a excel on your 10 year financial goals. It helps one focus more when setting those goals.

 

[valerie2017]

@gracer Good day OP, thank you for this detailed response.

It's going to be a fun journey