2020 In Financial Numbers

You are probably tired by now about “how special 2020 was” or “what a different year 2020 was”. And so am I. But now that this “interesting” year is over, it’s not a bad idea to look back at it from a financial perspective. Therefore today a post about 2020 in financial numbers. For us personally that is.

What did we do in 2020?

In all fairness, not a whole lot. Mrs CF worked in January and February. I worked in February and March, and that was it. The two of us didn’t even work 3 months all together in 2020. This was obviously the result of a certain virus. I really wanted to work last year, but simply could not because I was not able to travel internationally. Furthermore, the work that I was supposed to do was also cancelled/delayed. Fortunately for us, because we have investments and an emergency fund, we didn’t break a sweat. I highly recommend it.

Other stuff we didn’t do was buy a house, we didn’t go on a vacation, we didn’t travel at all. Oh, and we didn’t spent a whole lot of money either. Go figure!

But what did we do? We renovated our house substantially, to be able to have it ready to rent it out in the future when we do find a new house for ourselves. We walked and cycled quit a bit. Furthermore, we enjoyed the great summer weather. Overall, it was not the most spectacular year, but it certainly was not an expensive year! It was a sad year though, as my dad past away in the spring.

Saving Rate

With so very little time earning money, how did we do on the saving side? Not bad actually! Because we didn’t get an income every month, the numbers are all over the place. Add in cancelled courses for Mrs CF, a tax exempt gift from my mom, other varying expenses and (tax) refunds and you get a very messy saving rate graph:

2020 In Financial Numbers: Saving Rate
2020 In Financial Numbers: Saving Rate

Realistically, there is no point looking at the the individual months. In a year as rocky as 2020, you should only look at the total saving rate for the year. Which was almost 39% to our delight. However, this is skewed upwards! This as I now work as in independent contractor and pay my income tax the next year. In the last few years, this didn’t make a big impact, for 2020 it does. If you take it into consideration, the saving rate would drop to around 25%, which is still amazing if you think about it.

What did our expense distribution look like for 2020? The pie chart below gives a nice breakdown. Normally the “other” category is not as big, but this year Mrs CF needed some courses done for her continued education. Since she didn’t have and employer, none of those expenses are covered and had to be paid out of pocket. Ah well, first world problems!

We did exceed our budget for food and groceries by about 10% compared to budgeted. But I blame the lockdowns for that ;-). Obviously, transportation and travel & leisure where considerably lower due to obvious restrictions. Overall, no real surprises. But we did end up spending about 20% less than budgeted for 2020 and ended up spending just about €26.400.

2020 In Financial Numbers: Expense Distribution
2020 In Financial Numbers: Expense Distribution

Cheesy Index

How is our Cheesy Index doing? The index that takes our wealth and the required wealth to be able to FIRE, and makes the ratio into a percentage. It didn’t change according to plan in 2020 (it was supposed to go up throughout the year). But al things considered, we are pretty happy!

2020 In Financial Numbers: Cheesy Index
2020 In Financial Numbers: Cheesy Index

It’s no surprise that it drops in March, due to market turmoil. But payment of earned income and recovery of the markets drop drove the ratio back up in April and May. Next we started spending about 80% of our €50.000 investment budget to complete the renovation of our house into two rental units (currently finishing up the works within budget). Add in some more market movements, and voila. There is 2020 for ya.

Yes, we “lost” some wealth on paper due to the investments into our property. But this will be corrected in January of 2021 when the property prices are adjusted for the investments and increase in prices (yes, I do this only once per year). Realistically, we actually increased our wealth within 2020, primarily driven by the insane continued increase in housing prices.

Financially, 2020 was a good year. Albeit a bit surprising, we didn’t expect the property value to be positively affected by the corona virus. But lots of free money does make a difference apparently!

2020 In Financial Numbers: Historical Cheesy Index + Forecast
2020 In Financial Numbers: Historical Cheesy Index + Forecast

The graph above is showing our historical Cheesy Index and forecast for the coming years. This is assuming we will have some income in 2021 thou. Which is still uncertain at time of writing, but looking better than last year.

The major jump in wealth in 2021 is primarily due to our real estate being evaluated more realistically. We have been underestimating the property values over the past 2 years (2019 and 2020) and the renovations will add a significant amount of value too (read: value and rental income).

It is not unlikely that we will “formally” be financially independent by the end of 2021 (or early 2022). Both in terms of wealth as well as in cash-flow terms. The latter is the most important for us to be honest!

Investments, Assets and More

How did our assets develop in 2020, what did we do investments wise? Here are a few graphs and explanations. I may write a different post about my experiences with dividend investing in 2020. It was not my greatest achievement to be honest. Yes, mistakes were made! You think I would have know better by now….

Anyhow, here is the distribution of our assets:

2020 In Financial Numbers: Asset Allocations
2020 In Financial Numbers: Asset Allocations

We started the year almost fully invested, we ended the year with a lot of cash sitting in the bank. The reason is simple, we had loaned money to fellow real estate investors. They used the money and repaid it all (with interest) by the end of 2020. Hence, a large amount of cash is now available.

We plan to use the funds to buy a property for us, invest some more in the existing properties to improve energy efficiency (and increase rental prices) and pay of the existing mortgages. Yes, we are deleveraging! We are getting to the point where cash-flow if more important than return on investment. We want to be in a position where we really don’t need a job and still are able to live comfortably (without added leverage risks). Let’s see how that goes in 2021.

2020 In Financial Numbers: Income Asset Allocations
2020 In Financial Numbers: Income Asset Allocations

Due to the large amount of cash, the distributions of income assets has shifted a bit. Come next year, assuming we can find a house for ourselves, it will go back to about 2-20-78% in terms of the split between index funds, dividend shares and real estate. The crowdfunding will come to an end in 2021, we have not bought into new projects for years now. It’s not our thing!

How did your Real Estate do?

To be honest, we had the best year ever. No tenant turnover, low maintenance costs, lowered insurance costs, had several short term (high interest) real estate loans make good money. The end result was this:

2020 In Financial Numbers: Real Estate Income

Pretty happy with where we are, how it’s going and the promise of the future. For next year we expect more tenant turnover, about the same in basic maintenance but lower income due to no investment loans and no fixed plans to rent out two more units. In short, we expect a year with less income and the same or slightly lower cash-flow. It should go up in 2022 when we hopefully have a new house for us and all 6 units rented.

We are still looking at our options to see if we will have a higher investment mortgage and a paid-off house for us. Or a very low investment mortgage and a high mortgage on our personal property. It will all depend on how our employment will develop in 2021. If we have work and can get a mortgage, we will finance our own property. If we do not have employment (or too little income), an investment mortgage it will be. Time will tell!

I saw Geldnerd doing pretty good too in 2020, check out his overview if you have not done so already.

How did you do in 2020?


  1. Hi Mr. and Mrs. CF

    My wife and I really enjoy reading your blog. We have learnt a lot from your writing.
    We are very new in this FIRE journey. Do you do consulting call? Is it possible to jump on a call with you when we have questions?

    We would like to learn more.

    1. Actually, that was passive indeed, it was a payout of Google Ads 🙂 About €85 or something like that. Minus infinity, now that would be funny!

  2. Love the blog Mr. and Mrs. CF! With so many obstacles in 2020, congrats on renovating the house and saving so much money! Keep up the great work!
    P.S. I’m an engineer too!

    1. It’s still uncertain on the job front. but there is a lot of work coming in the future. It’s just a matter of getting a part of it. My name and number are out there, it’s now just a waiting game!

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