I’m updating my visual aid for the month of April 2014. Here is where I stood at the end of March 2014.
March 2014 still using the “old” method
I’m usually pretty good at tracking my spending, but since settling in Australia, I have become a bit sloppy and I notice the sloppiness in the charts.
I have to transfer money over from the US every so often to pay for rent and such and the past few months I’ve considered money “spent” once it left my US bank account. This approach meant I did not worry about exchange rates, but it did not prove to be an accurate representation of my net worth. My Australian bank account was never empty, but was not accounted for at all in my charts. As a result, money built up in my Australian bank account and soon enough came a month where I did not need to transfer any money from the US account. April 2014! This is what the chart looks like under the current method.
Does this mean I can….retire now?
Here is what I projected my charts to look like if I stuck with this method.*
Ugly, meaningless, hard to read, probably cheats at board games chart
That chart’s hideousness makes me want to disavow all the data in it and is not exciting to update.
So, I dug through my bank statements for the last few months to re-calculate my numbers, this time including the money in the Oz account. I took the balance on the last day of the month, looked up the official conversion rate, and added it back to my net worth. Even though the money was in Oz, it was still my money and should not be treated, mentally and in my charts, as spent. I then looked at all my expenses on the Australian debit card and added that to my expenses, using the conversation rate at the end of that month. It’s not a perfect system, but it’s a big improvement.
Here is the chart with the new system.
Definitely smoother
The chart is much prettier, but my expenses are just too high right now. My net worth increased more than $14,000 in March thanks to a tax return and a happy market at the end of the month, but you would never guess that by looking at the red line.
Here’s the updated chart with my income line thrown in to make me feel better.
Spending less than I earn
Better, but financial independence (the crossing of the blue line and the red line) *feels* insufferably far away. I actually managed to hit a big milestone this month – my current projected passive income would have actually covered several months in this chart.
(I did buy some coconut water to celebrate.)
To read how I arrive at these figures, please click this.
*The dip around February 2015 is when I imagine the aliens coming and the market panicking. By the time March 2015 rolls around, we realize they just wanted directions.
