Friday, October 02, 2015

Retirement - second anniversary

As it has now been two years since my formal retirement at the end of September, 2013, here's a recap of how things have been going:

1. Financial (part 1): given the recent turmoil in the markets and the losses on my equity portfolio this year (compounded by adverse FX movements), I have obviously spent some time thinking about whether I should be worried about the sustainability of our finances. And while I have lost a bit of sleep over the issue, the short answer is "no". After adjusting for residual income received post-retirement and changes to accruals, the mark-to-market portfolio (the numbers I report monthly) have dropped by less than 1% after accounting for living expenses. Losses would have to get a lot worse before I would be at risk of outliving my resources. Also, my monthly net worth calculation does not reflect current property valuations - property is carried at historical cost. If I revalued the properties to current bank valuations, I would be comfortably ahead of where I was on retirement.

The consolidated balance sheet which includes Mrs Traineeinvestor's assets and takes into account current property values, is actually up from when I retired and does not yet reflect the most recent increase in HSBC on-line mortgage valuations.

2. Financial (part 2): the other aspect of our finances is cash flow. Cash balances have fallen due to a combination of new investments and spending exceeding income from investments. During the last two years, I have had to fully renovate two apartments in Hong Kong, paid a very large building renovation levy, had three months of vacancy on two properties while renovations where being done and paid for a master's degree. Assuming I don't get hit of any of these very large bills again, cash flow should be better going forward. Also, I can look forward to Q2 2018 when another mortgage will expire.

3. Work: I am still doing some very part time consulting. This has gone on for longer than I expected, but I'm enjoying it and am happy to continue as long as it doesn't interfere with anything else.

4. Health and Fitness: I encountered some unexpected health issues which were a cause of concern for a while but (hopefully) are no behind me. They did interfere with plans to improve my fitness but I am starting to get back into it again and plan to run a marathon at some point in the future.

5. Other activities: The highlight is completing a post-graduate degree and thoroughly enjoying the experience. I've also developed a few hobbies and habits which are keeping me occupied (mid-week hiking with another early retiree, a volunteer position with a non-profit and a few others), but need something to replace the formal study. I have finished the first draft of a novel and hope to finish editing by year end with a view to self-publishing early in 2016. One of the things I have learned about myself is that sitting around doing nothing is not something I enjoy.

6. Things I haven't done: I have a very long bucket list and while I am making reasonable progress, there are a lot of things which I haven't touched and sometimes I have a nagging feeling that I should be doing more. I'll review the list and pick a couple of items to bring to the front of the queue.

So far, I have no reason to regret the decision to take early retirement. It's been a great experience and I feel like I'm using my freedom well.


Troy said...

Phew. Glad you are back. Sure has been a rough ride this year. Its good to read your analysis on the actual effect to your portfolio. Sometimes its definitely tempting to go against the plan and panic sell. I have been guilty of this in the past.

Super Saver said...

I've learned early retirement wasn't as uneventful as I imagined it would be. Having a successful and sustainable retirement takes a lot of effort :-)

traineeinvestor said...

@ Troy - Well, I have certainly spent plenty of time wishing I had sold some more of the portfolio earlier in the year and, yes, I have learnt the hard way that if I am going to panic I need to do it early.

@ Super Saver - Yeah, this retirement thing is hard work. Maybe I should go and get a job just to help me unwind a bit? Or not. I think I can tough it out :-)