This is the first update on my finances since switching to english. So let’s take a break from the introduction series and look into my personal finances instead. Read on to find out how I’m doing.
This post is intended as an overview of my personal finances. For me, personally undressing myself in financial terms means being held accountable for my actions and keeps me focused on what I want and how to achieve it. I invite the readers of this blog, and thereby anyone, inside and provide a view of how I’m doing financially. I am well aware that this is by no means standard in this day and age, especially in Denmark where I’m from, but I hope to inspire more everyday conversatin about personal finance, and the best way to do that is by initiating the conversation. The month of August went well both financially and personally and included a trip to Berlin with my lovely girlfriend among other things. In terms of the financial side I invested as per usual, and despite a trip to Berlin managed a respectable savings rate. August was also the month that I switched the language of the blog from danish to english, so this aspect was perhaps the biggest change for me in terms of my frinansial endeavours.
Posts written this month
Frinans – from danish to english
Frinans introduction series – part 1: Who is behind frinans
Frinans introduction series – part 2: What is financial independence
But without further ado let’s dive into the various components of my personal finances.
Stock and bond portfolio
Stocks and bonds is by far the biggest asset class in what could be considered my overall portfolio of wealth. I invest as much as possible in this category every month. During the month of August I went on vacation to Berlin with my lovely girlfriend so the amount invested this month was a little less than usual. For the month of August I intended to buy stocks for 5.000 DKK and transferred 3.000 DKK for buying bonds at a later date, since bonds aren’t part of my monthly savings feature with my broker Nordnet. This changed however when I decided to simplify my portfolio even further.
The actual portfolio has looked much the same for quite a while:
This changed during the week as I sold all of my danish stock funds and bought global funds and danish bonds instead. It is a move I have been pondering for quite a while since it simplifies the portfolio. This means that my portfolio now looks like this:
The actual weight of the different components as of August 30th. are listed here:
Global stock fund: 78,3%
Danish bonds: 18,2%
Thin Film Electronics: 3,2%
Hugo Games: 0,2%
You can view my portfolio of bonds and stocks at all times at Shareville, my username is simply Frinans.
Ideally I want the allocation of bonds to be 20% so I am still looking to increase my holdings of that asset. This is due to me wanting to control the overall risk of the portfolio and a 20% bond allocation suits my risk profile, and let’s me sleep better at night. I sold the danish funds because I can’t really find a good reason for them to be part of my portfolio other than they have risen quite a lot in value this year. This of course should seem like the perfect reason for keeping them, but ideally I want this portfolio to be as simple as possible, and I am actually exposed to danish equities through the global fund. Ideally I want the portfolio to be 80% global stocks and 20% bonds, but I just can’t get myself to sell Thin Film Electronics, maybe I’ll convince myself at a later date. Hugo Games has the rest of 2017 to gain traction or I will sell it for tax gain purposes.
I will consider adding danish equities to the newly proposed stockportfolio option from the government, but more on that at a later date if the actual proposal sees the light of day.
As many of you know, my portfolio has taken a bit of a hit these last couple of months, since the valuation of the dollar has fallen compared to Euro and thereby DKK. This still remains the case, so the portfolio hasn’t performed wonders this past month. This can be seen below where my portfolio is shown alongside the development of the leading danish index C20CAP:
Depending on the point of view this can be seen as a positive since it means the global stock fund is on sale. I did sell my danish stock fund which had risen a good amount so far this year and bought more global stocks. If I’m lucky I got them on sale. I don’t spend too much time thinking about the losses, it’s just a part of the proces. A little increase though would put my portfolio at 250.000 DKK which is a milestone I want to reach this year.
Total worth: 244.000 DKK
I have a very small, the absolute minimum possible, amount invested in Danske Banks relatively new investment type called June. The amount is so small it probably shouldn’t count in an update, but I will include it none the less, simply so that you can see how that investment type evolves. I started out with the minimum investment of 100 DKK back in January of 2017.
Total worth: 102,17 DKK
I buy Bitcoin every month, and this month I have switched to buying twice, so every two weeks, although the amount remains the same. I think this is how I will be doing it from now on since once a month is a very long time in the world of crypto, the reason being markets are open 24/7 as opposed to stock markets. Buying at fixed dates means applying dollar cost averaging as a method for acquiring Bitcoin. I don’t really consider Bitcoin an investment, but more a means of buying for the future. This means that I don’t intend to sell my Bitcoin when or if the valuation reaches a set amount. I simply intend to acquire and at some point start spending Bitcoin.
If you are interested in getting started with Bitcoin, Coinbase (referral link) is a good to place to begin. You can access Coinbase both through web and app, and their interfaces are very user friendly. If you sign up for Coinbase through my affiliate link, and buy Bitcoin for a minimum of 100$, we both get a 10$ bonus.
Every month I transfer an amount of 1.000 DKK to a savings account. I don’t know what the money are for exactly. The savings account could be considered an emergency fund, something a lot of people pursuing FI have. It could be a way of saving for a big expense such as a new computer. It could also be savings for a future home or for getting married some time down the road.
Total savings: 20.040 DKK
I don’t have a lot of debt, so this part doesn’t take a lot of my time. I have bit of student debt from my time at University from a time when I didn’t have a job alongside being a student. I pay instalments of about 830 DKK every two months. The interest on student loans in Denmark is very low at the moment. I haven’t been able to find the actual percentage but it is about 1% or so. I am considering paying the debt as a lump sum simply because I find it annoying being in debt.
Total debt: 30.415 DKK
Overall I’m quite pleased with how things are going. Bitcoin has grown to be more than just pennies and I am continually increasing the amount of bonds to better reflect my personal risk tolerance.
My overall portfolio of wealth looks like this:
Since I also have some debt, the overall value of my wealth is: Stocks + bonds + value of bitcoin + savings – debt = 254.000 DKK
Not included in the calculation above: Deposit for the apartment I live in and my pension. The latter I will write a post about at a later stage, as this might differ from many other places in the world.
Since the month of August included a vacation my savings rate is a little lower than usual, though not much. It is difficult for me to obtain a really high savings rate since I don’t have a high salary and it is getting increasingly difficult to cut costs. Overall though I should be, and am, rather pleased about it.
Savings rate for this month: 55%
As always comments are most welcome and I will do my best to answer all questions. You can follow or like the facebook page or follow frinans on twitter to get notified of new posts as well as interesting links and stories I stumble across. If you are interested in getting into Bitcoin you can sign up for Coinbase through my affiliate link, if you buy Bitcoin for a minimum of 100$, we both get a 10$ bonus. If you are interested in diversifying your investments further, then how about signing up for crowdlending through my Mintos affiliate link and gain an exclusive % on your investment.