August NetWorth and Savings Rate Update

As part of the army of increasing personal finance bloggers, I update my NetWorth and savings rate each month and compare my progress to goals set at the start of the year.
Goals that aim to push me to keep my finances in order and to carry on saving hard, consistency in the long term is key after all.
Tracking you NetWorth is a useful tool to understand where, i aggregate, your finances are and setting a challenging goal can help you increasing this as fast as possible.  The problem with a NetWorth goal is that it, to some extent, is out of your control.  The larger you allocation is towards the more volatile asset classes the less control you are going to have over your NetWorth in the short term.  The savings rate is a different beast, one that you can capture, electrocute a few times and keep under your control.  Trying to control your NetWorth, worrying about it decreasing, is only going to result in sleepness nights and a nervous twitch whenever looking at the market.  It is with this in mind, and the recent volatility in the markets, that I trepidly update my numbers.
Goal 1 – Increase Net Worth – Target of 40% across the year
The target
To be on target I need to aim for an increase of approximately 2.8436156% a month –> ([1.4 ^ (1/12)] – 1) x 100 or a trifling amount over 25% for the year to date.  I won’t include the equity in my house in this amount given it’s illiquidity and uncertainty around valuation.  It is the ISA, Pension and cash assets only.

The main event
Net worth decreased by 3% in the month and that brings me to a 24.9% increase since the start of the year.  Never nice to see a decrease in your funds even after your monthly contributions, but that’s all part of the game.
Even with China trying to derail my NetWorth goal for the year, I’m still just about on target.  Nice try China, but this Zombie is still just plodding on.
Still up since the start of the year, but slowing
I imagine all around the world those interested in their finances have been prepared for a bit of a battering this month.  A decrease of 3%, after contributions, in only a month is a significant decline.  But perspective is a funny thing, in the long term this may just turn out to be a tiny blip or the start of something more serious.  Who knows, my crystal ball is broken, it’s not the time to start questioning my strategy or asset allocation so I will carry on with my regular contributions.
NW for the year to date is here.

Although I’m 0.1% behind my goal, I’ll take it as a sneaky PASS

Savings rate – Target average of 60%
The target
I set a target of 60% at the start of the year, to challenge myself to get my savings rate up towards the lofty heights seem by some other bloggers and it’s being going pretty well.  I’m not a fool though, I know that this is buoyed up by a lower mortgage payment than plenty of people.  It’s still some pretty sweet progress from over a year ago when savings for the long term were the company pension only.

The real deal
Savings rate for August has gone up from prior months, to 66.4%.  I had been building up a bit of cash in my current account, so why not put a bit more of it to work :).  How the mindset has changed over the last year or so, this would have been a prime chance to buy some new cycling gear but not it is a chance to boost the savings for a month.  Rock on.

This has helped the average for the year creep up a notch up to 58.3%, up from 57.1%  last month.
Looks like I’ve gotten into the groove the last few months, keeping the savings rate above 60%.  I’d be lying if I didn’t say that I’m chuffed with this.

With the in month rate being above target I’ll take that as a pass for the month.

PASS

Spend less, keep on saving and Escape the Horde
Mr Z  

9 thoughts on “August NetWorth and Savings Rate Update

  1. Retirement Investing Today

    Hi Mr Z

    We all know that savings rate is one of the key defining factors on how quickly we can FIRE as by spending less we not only save more but the FIRE Number also comes towards us as we now spend less. As we've discussed previously just how big an effect it's had on my FIRE journey has been surprising. It's therefore great to see that savings rate trend line heading upwards. Congrats!

    Cheers
    RIT

    Reply
  2. Anonymous

    Hi Mr Z,

    Congratulations on another good months saving rate! I also saw a decrease in my overall "pot", however when compared to the FTSE, S&P and Dow drops, it wasn't as bad as those so its a little comfort – but just keep watching the dividends tick in! I am sure you will hit the networth increase, so keep up the good work!
    London Rob

    Reply
  3. M from There's Value

    Fantastic progress, even though one of the goals was only a sneaky pass. Really well done on the savings rate especially. We only manage 28-31% per month and there's not much room for a higher rate right now, even with our 'cut your grocery bill in half challenge'. So you are doing super well! Keep up the good work

    Cheers

    Reply
  4. Tawcan

    Pretty fantastic savings rate you're having. Having a huge difference between income and expenses will allow you to use this difference to invest. That will go a long way down the road. Keep it up.

    Reply
  5. Mr Zombie

    Hi LR,

    Yep, that's true. We keep on contributing and accumulating through the good and the bad! Like Newton said what goes down must come up…. or something like that

    MrZ

    Reply
  6. weenie

    Fantastic savings rate this month and excellent average, well done!

    I had a good month but things will go a bit downhill for me from September, although the good news is that I will still be saving, just not as much as I was.

    Reply

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