Updating Thriftygal’s Charts – November 2015

By | December 19, 2015

I’m updating my financial independence charts, but this will likely be the second to the last time. I’m devising a new visual aid to track my expenses and hope to have a new system in place by the new year.

As a reminder, here is where I stood at the end of October 2015.

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October 2015 was a spectacular month for the total stock market index and my net worth increased an absolutely stunning$44k. This number is all the more amazing because that was my first official month unemployed.

Here is where I stood at the end of November 2015.

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My net worth (as measured by the green line) increased by about $5k, but that increase was mostly due to my Australian tax return. Australia’s calendar year ends June 30 and I just received my refund.

My expenses (red line) were reasonable as well.

This chart really isn’t much fun to update without my previous income. Ho hum.

As a reminder about the formula for these charts:

The red line is my expenses each month. I calculate the green line based on a method I found in the book, Your Money or Your Life. The formula in the book reads:

(capital x current long-term interest rate) / 12 = monthly investment income

In my head and for my charts, I’ve tweaked the formula for myself as:

(net worth x estimated yearly withdrawal rate) / 12 = monthly projected passive income

My estimated withdrawal rate for my own finances and the number used in the spreadsheets is 4%. I derived that number from the aptly titled “4% rule“. This method, necessarily, involves a bit of assumption. I expect my investments to return 7% a year and inflation to hover around 3% a year.

estimated yearly withdrawal = expected rate of return on investments - expected inflation.

Here’s how many months my current projected passive income would have covered over the last 5 years.

November 2015 chart

Want to build your own financial independence chart? See my generic spreadsheet here.

27 thoughts on “Updating Thriftygal’s Charts – November 2015

  1. Helen Wallace

    That’s a brilliant set of charts thriftygal. What an amazing achievement.
    Also your mother must be an amazing cook if these recipes are an example!
    Are you planning to do some travelling or chilling at home for a while enjoying your financial independence?

    1. Thriftygal Post author

      Thank you for your comment! I’m visiting my parents for the holidays and then I’m wandering around South America for the new year. 🙂

  2. GMT

    Long time reader. Congrats on the success.

    Thank you for sharing your journey and the example spreadsheet.

  3. Anon Lawyer

    Hi! Glad I found your blog. I am very similarly situated to you. Have been practicing in Big Law for a bunch of years and wanted to get out. Saved enough for 3% withdrawal rate. Giving notice soon and will start traveling with my wife next month.

  4. pib

    Your worksheets are awesome! I am starting to see how I perform under your worksheets! I have a noob question though. Whats PPI?

    1. Thriftygal Post author

      Projected Passive Income. What I expect to earn, on average, from my investments each month. 🙂

  5. Warren Moore

    Ha! I didn’t think a woman like you could exist. This kind of stuff is still too rare and guys like me can’t find women like you.

  6. EL @ MoneyWatch101

    I’m sure you were elated to have a big bump in Net worth of 44K. Reaching FI is fun and you did it so early in life, congrats. IF your writing back you do exist, unless you are actually a site troll? Good luck taking all those sweet days off and staying Financially free.

  7. Keith

    Are you going to be in Rio for carnaval? Highly recommend it.

  8. Mark

    3% inflation is wildly optimistic and would be something every central banker would salivate for these days, so I think you’re pretty safe at your 4% withdrawal assumption. MMM has a nice piece on it testing it historically.

  9. Marci

    would like to know how the 44% increase happened-that’s unbelievalble-was that in VTSAX?

  10. Grant

    I’m sure this wont mean much from a stranger, but CONGRATS on the early retirement. I just lost my job (been a hungry saver for years so were ok) and being home with he kids the last couple weeks has been a dream. i HAVE to figure this early retirement thing out fast. Great job, Thriftygal.

  11. A Reader

    in the Raw Numbers (Example) sheet, cell A4 should be Sept 2015 (not 2016).

  12. Jonny

    I’m really enjoying your site (I’m another referral from MMM). Your charts/posts have inspired me to start logging my various incomes and outgoings in a better way, so I can visually see them over time.

    I’m starting with income, expenses and net worth (or maybe projected passive income).

    How should I treat the money I regularly put away each month, to pay for things in the future.

    E.g. Say I put $100 aside a month for my next car, and $150 a month towards holidays. Should I class them as expenses (e.g. the same -$100/-$150 each month), and not log the amounts when I actually spend them (e.g. paying for a holiday or car), or do I treat the monthly payment as savings/net worth (and then have a huge rise in expenses on the months I pay for holidays, or buy a new car (the latter being much less frequent than the former!).

    I suppose the the thoughts of a permanent car sized spike on my charts may make me think more carefully about my next car purchase!

    1. Thriftygal Post author

      I think either way would work. Personally, I would take the latter approach and chart them as expenses when I actually spend it, mostly for the reason you mentioned – a large spike would cause me to rethink a large purchase or hold off for as long as possible. 🙂

  13. TJ

    Thank you so much for posting the spreadsheet here. This will make it so much easier to track journey to FIRE.

    I’m curious where you were adding income that isn’t regular work income. (Say, Credit Card Rewards, Dividends etc). Do you just ignore this form of income, for January, I just added those numbers to my work income column. I think ignoring them might make me think I have a larger savings rate than actual. 😉

    1. Thriftygal Post author

      I just ignore that type of income and add it to my net worth. I like simple and it was too much trouble (and usually too minimal) to worry about too much.

  14. Jing

    I just discovered your site from MMM. I am an accountant in my late 20s. Your blog has inspired me to start my own passive income fund and track my progress towards early retirement.

    I have a question though. I am currently maxing out my 401(k) and IRA contributions. Would you include these as a part of your passive income calculations? I am currently not including these in my passive income charts since I won’t be able to withdraw from them until the typical retirement age.

    Thank you so much for the wonderful posts! I am in the process of learning how to cook like my mom as well. Your blog is very inspiring.

    1. Thriftygal Post author

      Jing – I include my retirement accounts as part of my net worth (and thus for my charts). There are workarounds for getting that money out. I’m a long way from touching those moneys though, so it’s not a pressing concern.

  15. zeejaythorne

    I love this visualization for numbers that are a little big to wrap your head around.

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