The final of the three sub-parts of my End of Campaign Year 2023 review.
Let’s look at how I invested my money.
What I said I’d do
This is where I really shone in my 2023 campaign, so I’m happy to share this bit!
- Double pay a mortgage – which I now don’t need to do
- Maximise my employer pension – DONE
- Automate my investments and aim for £10,000 invested – SMASHED IT
- Invest the surplus in Bitcoin and gold
I waaay overshot these and as a consequence didn’t invest into Bitcoin or gold as heavily as I could have done.
If I had, I’d be super overweight on both of these unproductive assets.
Ironically, with the Bitcoin rally, I’d have been a bit wealthier; but at the time I was expecting a year of depreciation and the risk of the asset suffering significant price drops was to my mind too big to commit more money to it.
I’m already a bit heavier than might be wise on crypto, having made gains on it during the pandemic. Ultimately, I thought it best to overweight my more traditional investment funds.
Double paying a mortgage and maximising employer pension contributions
Obviously I didn’t take out a mortgage so there’s no need to get out of mortgage debt. ‘nuff said really.
My employer pension scheme kicked in around May this year. I’ve simply met this, meaning that I added £5,250 to pensions.
Pensions in the Channel Islands don’t quite follow the same rules as in the UK and I’m wary of overcommitting to them, especially when the tax advantage is only 20% (versus a 40% or greater incentive in UK).
Automating £10k of investments
When it transpired that I wouldn’t need to contribute £1,500 for my share of a mortgage on a two-bed, suddenly I could be more aggressive with my non-pension investments.
Trading212 doesn’t work well with Channel Islands bank accounts for whatever reason, so I switched to the Wealthify robo-investing platform to build up my non-pension funds and started from scratch.
The management fee of 0.6% beat anything I could get out of a Channel Islands regulated platform – no Vanguard, Hargreaves Lansdown or similar here – so even though this might not be my first choice it was a pretty reasonable one.
At the time of writing I have around £29,500 in it.
I started this in slow time at the end of 2022, but I’ve contributed around £22,000 to my Wealthify this year.
Gold and Bitcoin
I started the year with quite a lot of crypto, having played with it during the last couple of years when I knew that I wasn’t able to add much to traditional assets as I was building up to qualification.
This has paid off, but it might not have done. There was no way to know at the time.
When it became obvious that I wasn’t going to carry a mortgage and therefore that I’d have more surplus to save after my cautious £10,000-a-year target, I decided to automate this to a simple £100 per month transfer to an exchange account and be done with it.
In two years, I have paid about £3,000 into crypto assets; I’ve paid about £1,000 in this year, and between my trading activities/ yield farming side hustles and the recent growth I have around £8,000 in total. It’s mainly Bitcoin, but I do also have some Tezos and Cosmos ecosystem tokens in there.
Gold is weirder.
I prefer physical gold, but though I have a secure storage facility it’s less cool now that I’m going to be on a boat. I’m also put off by the ridiculous prices on gold at the moment, and haven’t been buying much this year.
I only added £850 to gold, but to be fair I think my stack is valued at around £3,000. That’s roughly the allocation I was expecting to have when I said I was going to add in some surplus to it, so that’s OK.
Venture capital investments on Crowdcube
I used some of my slack funds to buy into companies on Crowdcube, which are purely speculative investments:
- Nutri-Genetix: they make a meal replacement shake and diet plan based on the user’s DNA sample
- Go Modular: prefab housing for the 21st century
- Pikl: an insurance tech business that aims to make insurance work for the gig economy and side hustles
- Cornish Lithium: using old clay and tin pit mines and sea water extraction to mine lithium in Cornwall
- Flexi-Hexi: if you order glassware or any item from a B Corp company at the moment, chances are your packaging will be cardboard and recycled paper from this company
I probably shouldn’t put so much money if any into venture capital investments – at least, not as part of the financial independence campaign. I’ve paid in around £780 this year, and have a total of around £3,300 in all the years I’ve been using Crowdcube across something like 21 companies.
Overall savings rate
If we include the employer contributions to my pension, I invested around £29,880 this year across all assets.
That works out to be an overall investment rate of around 42.7%.
This wasn’t uniform throughout the year. To start with, I did things like buy a car, put aside cash for what is now the emergency fund, and pay for boat repairs.
Later on, my investment rate cleared 50%.
It’s a pretty good result and I’m happy with it considering the changes in direction this year. I’d hope to beat this next year now that my emergency fund has a generous wedge of cash allocated to it that shouldn’t need topping up any time soon.
I haven’t included my partner in the above…
It’s fair to say that Lady SierraWhiskyMike has a similar – if not, better – savings rate than I do.
Of the two of us, she tends to hold more cash in her current account, moving bulk sums to her investments a few times per year.
I’m the opposite. I can’t trust myself not to get distracted, so my investments are automated and I keep as little cash as possible to hand.
Anyway, the point is that while I don’t plan on breaking down her investments in the same way, she has a pretty sizeable pot of her own. I’m not the only player in this team pushing forward, I’m just the guy who writes the blog.
We cleared £100,000 across our total assets
I quickly showed Lady SierraWhiskyMike the draft post and we worked out that we’re on something like £114,000 plus a £20,000 emergency fund if we include our pensions.
We’ve also got two partial public-sector pensions we haven’t factored in.
Even if we took out the rogue Bitcoin and Crowdcube investments, we’re definitely over the £100,000 mark.
That’s pretty awesome – I may have a cheeky whisky tonight to celebrate!
Final thoughts on my invesments for the year
The upside of the house purchase falling through and the boat plan taking so long is that I had a lot more income to contribute to investments this year than I was expecting.
We’ve also lived pretty comfortably. Some might even say extravagantly, given all the restaurant meals we’ve had this year.
With us now moving aboard the boat and being able to optimise our routine to make our budgets more efficient, I’m hoping to beat this investment rate in 2024 without pushing too hard.
We’re now firmly established to make some significant progress in 2024. With quite a bit of capital committed to various investments, we should hopefully start to see some meaningful returns starting to compound in our various investment pots over the next couple of years.
