December 2017 Cheesy Index

Well what better than to wrap up and summarize 2017 than with the Cheesy Index? In this December 2017 Cheesy Index post we will also look at the portfolio allocation and some random financial statistics, which also showed we were FI in 2017! Too bad that from a cash-flow perspective we still have a long way to go….

December 2017 Cheesy Index

Despite not having posted the December savings rate or dividend incomes yet, we could already see that 2017 was going to be a great year for the Cheesy Index (see also the post form last month). We closed out the year with a Cheesy Index with a total of 69%! Just look at all the cheese stacking up, it’s just pretty ;-). We also shot past our 65% target for the year, in largely thanks to the stock market and our Real Estate income.

Here are the stats:

December 2017 Cheesy Index

December 2017 Cheesy Index

Portfolio Allocations

As you might be aware, we have divided our assets into three classes:

  • Income generating assets (stocks, real estate, loans, etc.);
  • Non-income generating assets (cash, our house, art, jukebox, etc.); and,
  • Depreciating assets (i.e. our car).

If you look at these three assets classes, and their development in 2017, you get this:

2017 Asset Allocations

2017 Asset Allocations

It is hard to miss the shift from ETF’s and Dividend shares to a Real Estate loan in November/December. But we now have more than 85% of our available wealth invested, that is good! However, we now have to work at getting some more cash for 2018. Primarily to pay for maintenance on our real estate and a 9 week road trip holiday (partially unpaid) in Q2 2018.

Portfolio Allocations – Income Assets

When you now breakdown the income assets into the following categories:

  • Our real estate;
  • The dividend shares;
  • Our Index funds;
  • The various crowdfunding loans;
  • Some sustainable investments (solar/wind); and finally,
  • Crypto-currencies.

And you dump all that into a graph for 2017, it looks like this:

2017 Income Asset Allocations

2017 Income Asset Allocations

As you can see, we are now heavily invested into Real Estate, followed by dividend shares. We currently have virtually no ETF’s anymore, very little crowdfunding left and only small positions in sustainable investments and crypto currencies. It’s unlikely that there will be major changes in this final distribution (from December 2017) during 2018.

Random Statistics and why we were FI in 2017 (and why not)

Ok, now for the fun part, here are some random statistics and notes for the financial year 2017:

  • Overall expenses covered by total investment income (before taxes): 107.6% (the bank decided to shift some charges to 2018, so it went up since this surprisingly popular tweet)
  • Total core expenses (excludes daycare and holidays/leisure expenses) covered by total investment income (before taxes): 149.7% (holy heck!!)
  • Total core expenses (excludes daycare and holidays) covered by net cash-flow (including estimated taxes): 91.8%
  • Target FIRE expenses covered by current net cash-flow (including estimated taxes): 83.9%
  • Overall 2017 return on investment (on income assets): 8.2%
  • 2017 was our highest income year on record, just a but higher than our previous record high from 2012
  • Net Worth increase in 2017: 20.1%

As you can see both taxes and cash-flow limitations are “killing” us right now. That being said, due to higher than expected yields we are close to FIRE than the cheesy index makes us believe. This is also not influenced by market valuations, which is promising!

 

Slowly but surely getting there! How about you?

 

 

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26 comments

  1. Happy New Year of, Beste Wensen!

    Why do you say that from a cashflow perspective you have a long way to go, yet you reported that 91.8% of your total core expenses were covered by net cashflow?

    Isn’t that close??

    Is it the cashflow encumbered by the amortising mortgage repayments? In terms of FI, wouldn’t we wish for the good ole days of interest-only mortgages to come back?? 🙂

    1. Hey Cameron, taxation also takes a big bite out of the profits. Since taxes are unavoidable, we need to get this covered too (which also affects the cashflow). We also have a killer year on the RE side, next year won’t be this good, especially not from a cash-flow perspective. The mortgages are definitely a cash-flow killer here. Then there is some safety margin, so we have a few more years to go!
      As to your last points, heck yeah! 😉

  2. Nice job Team CF, you can technically retire really soon with how close your income is to 100%. Very jealous and pleased for you!

    You have a lot based on real estate now, I hope that’s the right call in the future as opposed to flipping that % with stocks.

    Mr DDU

    1. We plan to weather out the next recession/stock market crash with RE and then start reinvesting into stocks at more favorable prices. Time will tell if this was the right call.
      Thanks for the visit Mr DDU.

  3. I need to commission you to make graphs for MY posts. Nice work, Cheesy-cheese!
    Hopefully 2018 is just as rewarding for you. I’ll be interested to see what real estate adventures you have cooked up!

  4. Hi Team CF
    Your progress made in 2017 is inspiring and very inspiring. Just a few years and you’ll hit Financially Independence.
    You also have made a bolt move in 2017, out from ETFs and dividend stocks into real estate and now having 85 % invested. My wife and I are not yet there, besides the stock portfolio which grew nicely we also have accumulated a cash pile as we want to buy a house. We have not yet pulled the trigger and it might well be that we put that plan “on hold” as we have not yet found a real estate that would be suitable for as and priced attractively. But I guess there are worse things in life than “sitting” on cash as sooner or later nice investment opportunities will arise.
    Keept it up your great work!
    Cheers

    1. Hey FS, we are certainly closing in on our FIRE. Good luck with buying you new home! Hope you can deploy your cash into a good investment in the near future.

  5. Impressive!
    As a couple we are also around 60% of where we want to be.
    Personally i can not complain about the cash flow generation, above 30.000 USD with a non dividend portfolio, you have got to love option premiums …

      1. I meant the combines stash is around 60% of where we want it to be. Combined I also made more than 30.000 USD in cash as the returns in the girlfriends portfolio were healthy as well. I really should keep better accounts. Nah, to lazy 😉

    1. Still can’t find that bloody cat 😉 That said, the last one showing cash-flow including taxes is a pretty good indication of where we really are. It’s not exact, as we have not calculated taxes in detail, but the order of magnitude should be about right.

      1. Great post, thanks. To be FI or not to be, that’s an interesting question and process. (Hope no cats or atoms where harmed in the process 🙂 )

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