Hey Ho!

Hope you all are well and safe, in these unprecedented times.


Introduction

Yesterday, I realized that it’s been exactly five years since I started walking the road of Financial Independence (FI). So, I figured it would be a good idea to reflect on how things have turned out. To that end, I am planning to write a couple of “five-year” based theme posts. On the first of these, I wanted to share some numbers of where I am at and what the returns of my portfolio have been like. This will be a short post with lots of numbers.


How is my portfolio faring?

First, I will cut to the chase and directly will give you the numbers.

  • The cumulative performance of my portfolio over the past five years has been 48,4%.
  • The average compound annual rate of return per year has been 8,21%.
  • The real rate of return (subtracting inflation of about ~1% in my current country Germany/Austria ) is 7,21%.
  • These numbers are pretty much in line with the original expectation.

I am attaching the performance charts below from my portfolio account to back this data up.

Cumlative performance of my portfolio over the five years.
Cumulative performance of my portfolio over the five years.

Annual performance per year.
Annual performance per year.

I have employed the same strategy for the last five years. It’s plain, simple, and some may even say boring. But, passive investing if done right for folks like you and me, should be boring. I have spent approximately 60 minutes per annum on “maintaining” my portfolio. Not more than that.

The sticky man that I drew 5 years ago about my FI journey needs an update. So, here it is :

An updated FI journey.
An updated FI journey.

Why am I sharing this?

I did not put these numbers up for any bragging rights. The reason for me sharing this is two-fold.

Reason 1: It works

The first reason is to show that the original ideas as described here actually do work. This is not rocket science. When boiled down the ideas are really simple. You just need patience and discipline to follow this through. What I have done almost diligently is to follow that idea. To be moderately frugal, save money, and invest that.

Rinse and repeat!

Reason 2: Inspire those “two” people

Right from the start, the reason for starting this blog series has been to share the information that could potentially help others. My hope is that these posts inspire at least two people to get started on their FI journey, or at the very least let them know that such a path exists.


What do you think?

I am curious to hear from you, the readers, on what think about the numbers. Especially about the 7,21% normalized rate of return. Are you investing in something and what has been your returns like (example: real-estate, stock-picking)? It would be cool to trade notes. Let me know in the comment section below.


If you like this,

you might also enjoy these other series of related posts.


Subscribe

I am planning to write out more of these “five-year” based theme posts. I am also planning to reveal the exact numbers of my portfolio. Please SUBSCRIBE if you would like to be notified when such posts come out. Also, if you find this helpful, please share it with your friends and family. I am mainly doing this to encourage people to start considering investing. As of now, there is no monetary angle to this blog. More audience encourages me to keep writing. Thanks, folks.
Until the next time, Ciao!

5 year of FI journey – An update in numbers

2 thoughts on “5 year of FI journey – An update in numbers

  • December 13, 2020 at 18:24
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    Good one Aditya! Investing early is key..

    Reply
    • December 13, 2020 at 22:25
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      Yup. Totally agreed. They itโ€™s time in the market and not timing the market ๐Ÿ™‚

      Reply

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