Financial independence – November 2019

Man looking at sunset

I am sharing my road to Financial Independence (FI) to help me get my shit together, or at least get you to think about where you are. The reality is that we all want to be financially independent. FI does not imply quitting your job and is not a synonym for retirement. It is the freedom to ignore finances when you make life decisions. It means choosing what makes you happy.

Savings rate

You can read more about saving rate in my article how savings rate influences your retirement. It will allow you to determine how long you need to save for your retirement based on how much you save. Our savings rate this month was 42.3%. Our expenses in November had very few exceptions, which allowed us to save a decent amount. Our savings rate can be seen below (3-month trailing average in orange).

Our average savings rate is 36.9% (36.8% for the three-month trailing average). We hope to keep hitting the 40% savings rate sweet spot. I must admit the running costs for little Alex is not too bad and is averaging about R4 200 per month.

Spending for the month

Your savings rate is completely dependent on your spending habits. Let’s look at what we spent our money on.

The transport, insurance, food, house, recurring and baby costs remained the same compared to last month. Health and medical came down to regular levels after paying all the latent medical expenses for Alex’s birth in October. The costs in the other category are up from 0.5% to 6,2%. We paid down the last outstanding amount for my sister’s education which increased this category significantly.

Financial independence

I also track our progress towards financial independence. For this, I set a target using the 4% rule, which I tested in the article back-testing the 4% rule. The methodology can be seen in the March financial update. Our progress towards financial freedom can be seen below.

We ended the month on a net worth of R1.767 million. This is a net-worth growth of R35 000 for the month. Internationally our shares were down about 1% for November while we lost about 4% on the local market. This impacted our savings significantly due to the exposure to shares.

I did a review of how we are advancing with our retirement plan. On average, we are saving R7 000 more than I planned on saving per month. However, we are still behind by about R100 000. This is entirely due to underperformance in the local shares and housing market. Hopefully, we will make up the shortfall once the economy strengthens again. At this stage, we are at 13.9% of our savings target.

Investment allocation

Our portfolio is weighted towards property. I am in the process of reducing our exposure to this asset class. You can read more about this in my articles why I’m selling my real estate and 9 reasons why I don’t want to retire with property. At this stage, we still have two properties left. Our allocation can be seen below.

Any new savings goes predominantly towards share investments, as Exchange Traded Funds (ETFs). This month I invested all our savings in ETFs. We’ve stopped contributing to property altogether. This will see the weighting systematically shift towards equities. Our portion allocated to share investments increased by just over 1% this month while property investments are down just over 6% since the start of the year.

I also do a breakdown of our equity investments. The majority of our money is in global shares. The three ETFs that we invest in are the Ashburton Global 1200 (53.5%), Satrix Top 40 (37.8%) and the Coreshares SA Property (changed its name last month) (8.7%). Come March, I will put most of our tax-free savings in local shares and property. For this reason, I will invest in international shares until then to keep the correct split between our investments.

My blog reads in November decreased from 19 631 to 17 955 (down 8.5%). I really appreciate the massive amount of support I’m receiving. Thanks for reading and if you have any specific topic requests please feel free to let me know. I also started a forum, which I hope will create a community of likeminded people that can discuss financial topics openly. This is my last post for the year, so enjoy the holiday season and I will continue creating content in the new year.

Be safe out there,


November articles

Role of the South African Reserve Bank

Embrace Black Friday in South Africa

Government Employee Pension Fund vs an RA

How to save money on monthly expenses

Quote of the week

"I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for ten years." – Warren Buffett Click To Tweet


Thank you for reading to the end. Apparently, the average person spends 8 seconds on a page, so you are special. If you have any suggestions, feel free to drop me a mail on the contact page. If I missed anything or you have questions, don’t hesitate to comment below. I might even notice it and respond. If you enjoyed this article and really want to throw me a bone, please share it.

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    1. Post
      Hendrik Brand

      Hey William it can. But doing the calc does not give our salaries as the total includes other streams of income as well.

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