I realise that March is an odd time to do a review of my FIRE 2023 progress but it marks roughly one year since I started to set things out on this blog, it ties in with my birthday, the chancellors budget and the tax year end. So it kinda makes sense to me.
Maybe next year, I’ll go for the more traditional approach of doing it in January.
FIRE Portfolio Performance
Overall I’m up 14.66% over the last 12 months, which is a good performance.
Over the course of the last year I have been drip feeding a combination of cash & funds released from rationalising my portfolio into my chosen FIRE portfolio investments. Given how the markets have gone up so strongly, I would have made better returns if I’d have just put it all in in one go but looking at it over a 30 year time horizon I’m not going to cry about the difference.
I’m now fully invested in the markets, so if 2024 also goes well markets wise (and so far so good), then I’ll get the full benefit of any rise.
| % Gains by Wrapper | |
|---|---|
| My ISA | 15.18% |
| My SIPP | 7.41% |
| MAFF ISA | 14.03% |
| MAFF SIPP | 13.24% |
| Weighted Average | 12.20% |
| Stock | Ticker | % Gain/Loss |
| Vanguard S&P 500 UCITS ETF USD Acc | VUAG | 14.26% |
| Invesco EQQQ NASDAQ-100 UCITS ETF Dist | EQQQ | 19.32% |
| SPDR MSCI USA Small Cap Value Weighted UCITS ETF | USSC | 10.77% |
| Vanguard FTSE All-World UCITS ETF USD Acc | VWRP | 11.08% |
| iShares Global Clean Energy UCITS ETF USD (Dist) | INRG | -18.92% |
| Invesco MSCI World UCITS ETF Acc | MXWS | 16.61% |
| iShares MSCI World Small Cap UCITS ETF USD (Acc) | LON:WLDS | 10.20% |
| iShares Core MSCI EM IMI UCITS ETF USD Acc | EMIM | 6.15% |
| Vanguard S&P 500 UCITS ETF USD Dist | VUSA | 14.20% |
| Vanguard FTSE Developed World UCITS ETF USD Acc | VHVG | 15.23% |
| Vanguard FTSE Emerging Mkts UCITS ETF USD Acc | VFEG | 4.63% |
| Total Portfolio Gain | 14.66% |
Not much in the way of fancy charts or anything this year I’m afraid, but I have now added some to my spreadsheet, which will get automatically updated every month (thanks to various bits of Apps Script code). So next year the above will look prettier I promise.
Markets in General
- Nikkei +47.5%
- NASDAQ +43%
- S&P 500 +30%
- STOXX Europe 600 +14%
- FTSE-100 +4.4%
- CSI 300 Index -8.5%
2023 saw significant rises in many major markets, mainly driven by a huge surge in big-tech companies. The markets have gone wild for anything AI-related, with Nvidia shares rising an incredible 242% over the last 12 months (making it the 3rd largest company, by market cap, in the world).
The magnificent 7 (Amazon, Apple, Nvidia, Meta Platforms, Microsoft, Alphabet, and Tesla) now comprise 1/3 of the market cap of the S&P500.
Whilst all of the press focus has been on the performance of the US market, I think Japan has been an even more interesting story this year.
The Nikkei has outperformed even the NASDAQ. Again, this is partly driven by technology stocks, but other things are going on here (improved corporate earnings, moving away from negative interest rates etc.)
It’s the first time the Nikkei has exceeded its 1989 high, that’s an incredible 35 years for a market recovery! Which knocks the S&P500’s ‘lost decade’ into a cocked hat and even beats the time it took markets to recover from the US Great Depression.
The FTSE 100 has yet again had a lacklustre year, with the lack of any technology companies in the index holding it back.
Economy
The UK economy continues to struggle and technically went into recession at the end of last year. The economy is forecast to grow going forward but at a pretty anaemic rate (between 0.5-1% per year out to 2026).
Inflation continued to be high (as per 2022) at an annualised rate of 7.4% but is now falling and is predicted to come down to 2.2% this year. I particularly felt food price inflation, which hit close to 20% in 2023, the increased prices in supermarkets and eating out is very noticeable.
The Eurozone isn’t fairing much better than the UK. It narrowly avoided recession in 2023 and growth forecasts also look poor.
The US economy is the standout performer. GDP grew 3.2%, added 2.7m jobs, inflation dropped to 3.4% etc. All things look positive on the US front for 2024, but the election at the end of the year could be interesting with Biden vs Trump looking fairly neck and neck.
2023 Goals
This time last year I set out some 2023 FIRE Goals. It’s safe to say I failed on almost all the personal ones e.g. start running, go on holiday etc. but I did achieve the financial FIRE-related ones:
- Work out my detailed expenditure and come up with an easy way to track it
- Sort my financial plan out and track it annually
Expenditure
I moved our bank accounts to Starling Bank and with this comes automatic categorisation of all our spend. I can view spend by category, spend by merchant etc. over any time frame I choose. So job done, I now have a much better handle on what we spend and where. You can see what we spend per annum in my Expenditure 2023 article.
As part of the detailed expenditure piece, I’ve cut out quite a few areas of regular spend. I’ve got rid out all TV subscriptions, Microsoft 365, lowered mobile phone bill and various other tweaks. Just that damned food bill that really bugs me now as it refuses to come down (not helped by the horrendous food price inflation I mentioned earlier).
Financial Plan
I finally have one, woo-hoo!. For the first time in 50 years (OK, I probably didn’t need one for the first decade or two of my life, so let’s call it 30 years).
I have all of our investments, pensions etc. in one big spreadsheet. The investments automatically update themselves (thanks Googlefinance) and I’ll update things like our defined benefit pension values every couple of years.
The spreadsheet also has various Safe Withdrawal Rate scenarios worked out, so I know what sort of money I can spend per year. It has state pension forecasts and pretty much anything else I can think of.
I just need to stop checking it every week now to see my latest net worth figure, which is irresistible when markets are on such an upward swing and I can be £10k richer at the end of the week than the start. I’m sure the novelty will wear off when markets are falling.
On a different type of financial planning, I have also sorted our portfolios out. Over the course of the last 12 months, I have sold 33 different shares, funds, investment trusts etc. (I know, what a mess).
I have moved everything into a handful of ETFs as I set out when I worked out our FIRE portfolio. The portfolio has changed slightly since I wrote it down, so I need to update that page. I needed to sell the Global All Cap Fund when I changed our SIPP & ISA provider, you can read why I did this in transferring our accounts to Hargreaves Lansdown (TLDR, they paid me £5k to move).
Annual Spending
2023 was a horrible year for our spending & budget. Our general expenses were in line with our normal outgoings but I still need to get better at monitoring them. The big, somewhat unexpected issues, were building work on our flat and a £2.5k bill to fix the gearbox on the car.
What started out as needing a new kitchen turned into a £50k project!, and that’s with me buying and fitting the kitchen myself. The kitchen itself ‘only’ cost about £12k including new appliances, it was everything else that caused the problem.
MAFF wanted a larger kitchen (so I’m blaming her 🙂 ) and this involved structural work, removing supporting walls etc. Add to that new wooden flooring throughout the flat, changing a door to a different place, a partial rewire, new radiators and having to redo some of the work incorrectly done by the first builder etc.etc. Nightmare.
Looking Forward
The building work is all done now and money has stopped flowing out of our bank account like water, and we have no foreseeable major expenses coming up. So 2024 should be a much better year financially, so long as the markets don’t tank and no more significant unforeseeable expenses raise their ugly head.
I’m still planning on hitting some of those personal 2023 goals, particularly the start running one and now the weather is getting better I have no excuses.
I’m hoping to pick up some part-time work/contracts to bring some cash in and reduce investment withdrawals.