February 2017 Cheesy Index

it’s time for cheese again, it is time for The Cheesy Index!

February 2017 Cheesy Index

This month we are very pleased to report another increase (starting to get “boring” eh?). We are up to 59.5%, that’s 1.3% for the month, an insane MOM increase! In this pace we will hit our target for 2017 already somewhere halfway the year. This cannot be right? Funny thing is, we even saw a bit of a drop at the end of February, which kind of recovered in early march again. Our month-end wealth was therefore actually a bit lower than during the surrounding days. Interesting thing is that this happened at the end of January too (and if I recall correctly, I’ve seen this happy a few times in 2016 as well). Not sure why? Any ideas as to month end market/currency fluctuations? Have not done an in depth analysis, but I’m starting to notice a trend. Perhaps I’m just tired from Miss CF being ill last week and I’m now seeing/remembering things that do not exist. It happened before 😉

February 2017 Cheesy Index

Echanges Rates – Part two

As to the exchange rates comment from last month, it looks like we have hit a new “bottom” for now. Based on our month-end numbers we have seen a slow and steady Euro weakening since early 2016. But exchange rates seem to have stabilized somewhat (i.e. exchange rates of the last two months were very similar), which also means less paper gains for February. This means that growth in the Cheesy Index for February is more “organic” (actual investment gains). Which is good, don’t really want to see “artificial” wealth gains, that would disappear during the next currency fluctuations.

This actually brings us to an interesting topic, hedging. At this stage we don’t hedge our investments, simply because we are in the accumulation phase. But when we will reach the withdrawal stage, steady cash-flow is a lot more critical. Perhaps we have to start looking at hedging or making bond reserves to withdraw from during large exchange rate fluctuations?

How did you do February? Another record high for you too, let us know!


    1. Hey Francesca,
      on one word: everything. But so does the target value for our net worth. we did a post not too long ago about our asset allocation. This provides some insights into where our money is allocated. As it stands now, we have about 80% of our assets producing income (real estate, stock, ETF’s and crowdfunding), about 17% are non-income assets (i.e. our home, some “higher” valued belongings like our Jukebox/art, cash, etc.) and about 3% is an depreciating asset (i.e. our car).
      Hope this helps!

  1. Those are some great results! You still have the rest of the year… maybe you should adjust your yearly target 😉

    As for the hedging, we are still far from withdrawing funds for FI. But our plan is to go for the sweet spot that ATL mentioned and live fully or partial of (passive) income. Currency fluctuations might hit the dividend income more then expected, but they will cover most (if not all) our expenses by then. When it gets really bad. we just keep working for a few hours per week.

    1. Ha, I’m not going to aim that high 🙂
      Fair point in the part-time work. Would not mind doing something for a day or two per week. Otherwise, project basis work (few months per year) might also be a nice idea. Great way to start sooner, and still easily manage the financial part of life.

    1. As for portfolio value/wealth, I would agree not to worry about hedging, but when you want a steady cash-flow to life from. Hedging could be a nice tool to have.

    1. That would be amazing, but I’m kind of waiting for life’s curveball. Has been going really well for a long time, there has got to be a hiccup at some point!

  2. Nice results for team cheesy finance!

    The hedging question is a good one. When the CAD goes against you, you end up with less monthly income.

    No idea myself on how to hedge against that. Bonds could help, yet, it means selling and your CAD income would keep coming in. That means the waiting for CAD to become strong again and convert to EUR bonds at that time? You then create a dependency on EUR interest rates… Just my thoughts…

    1. This hedging really is a difficult one. Need to think about it a bit more albeit we are considering what you are proposing. On the other hand, we would do a partial FI, the problem kind of disappears. Plus, we can withdraw less from the pension accounts than is generated by dividends. This way we would always ensure that we are able to withdraw the same value in euros.

    2. With a partial FI, you could maybe organise it in such a way that the partial income pays for all. Then, no withdrawal is needed. That idea has a big potential to be my sweet spot.

  3. What a great savings rate. I can’t really imagine our savings rate in our current situation to reach that high. We still have a lot of improvements to do.

    Keep up the good work!

    1. Hey,
      Not actually our savings rate for this month (which actually was even higher!). The cheesy index provides the ratio of our current net worth over our target net worth we think we need for FI.

  4. That is an awesome monthly increase. Well done to you. As far as the fluctuations go, is it to do with the oil prices going up and down? Or has that been more so for March? All the best for March.

    1. I think it is both the EU quantitative easing and oil/commodity prices. The Canadian economy is easily resource based, so oil prices and commodity prices have a bit impact on the currency rates. The EU is printing money like crazy…. It can go either way.

  5. I’m not sure how to handle currencies under FI conditions. Until now, it’s been possible to shuffle funds around to take advantage of strong currencies. I guess I’m continking to do that by investing savings in EUR assets right now, because letshe face it, we’re getting negative purchasing power bang-for-buck abroad at the moment.

    1. I would agree with your last statement. Our problem is that hedging within the Canadian pension account is rather difficult. So we got to come up with a different approach to this challenge.

  6. Nice job Cheesys! That is a huge monthly increase. We don’t mind currency fluctuations, it would only really change our buying choices, nothing to do with the income I suppose. What helps one month will be bad another..it all goes around 🙂


    1. We also don’t mind the fluctuations for now. But when it is cash-flow time during FI, it would be nice to have more stable income. Currency fluctuations don’t help!

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