Author: Tristan & Jasmin.
We like to work out how well we’re doing each month with our monthly dividend updates and savings rates but without the context of the big picture progress it might be a little meaningless.
This is a little late, but hopefully it’s worth the wait! So, let’s have a look at how we did over 2016…
2016 Savings rate
This is calculating our income (after tax) minus our expenses for the entire year. It doesn’t include any superannuation guarantee payments in the below percentages and amounts.
Total income after tax: $49,632.81
Total expenses: $40,562.36
Total savings: $9,070.45
2016 Savings Rate: 18.3%
Here’s the graph:
For our first year of officially tracking our savings rates and also doing IVF during the year (twice), 18.2% is a decent start. There were a couple of really expensive months during the year which had a big effect on our total. These months will probably have the same expenses in 2017, but our income is just going to keep growing from here so the rate should get better.
We put a bit of our savings towards investing, but kept most of it as building up our emergency fund and IVF fund. Now that we’ve made a baby and got our emergency fund to five figures, we can really focus on investing. We have 4 posts upcoming to tell you what we’ve recently added to our portfolio.
Back to reviewing our 2016 result.. we only managed to break the 50% savings rate barrier once during 2016 in May. Hopefully we can break that a few more times this year.
We’ve found our groove with our expenses; we’re comfortable with the frugal, quality approach they’re we’re spending. We’ve found the house, car, food, clothes etc. that make us happy and feel good, yet at a very affordable price considering we live in one of the most expensive cities in the world.
We’re working hard on increasing our income, so hopefully our savings rate just goes upwards from here.
2016 Dividend income
Dividends are the key financial statistic that we want to build. Why? One day we want to be financially free, where our expenses are completely covered by our investment income. At that point, we could decide to retire and not work again. If our investment income grows faster than inflation, retirement could get better as the years go by.
We aren’t just buying shares with the highest dividend yield. We’re buying businesses we think offer very sustainable, growing dividends over the long term. We aren’t trying to be perfect investors, but investing in what suits us the most.
Our investment income in the first few years will be fairly small, but we have to start somewhere and grow it. Compounding is an unstoppable force when it gets going and we’re going to put it to work as much as we can.
So how did we do during 2016?
We received a total of $414.47 dividends during 2016, an average of $34.54 per month.
This translates into just less than three full days of work (which is nice), but when we add it all back into buying more shares that’s when it starts becoming a strong financial force.
We were very excited to see the big totals of September and October in 2016 and can’t wait to see how much our dividends will grow this year and beyond.
Our numbers are much smaller than a lot of bloggers out there, but we don’t mind. We’re not racing anyone else, we’re just trying to do the best for ourselves whilst enjoying our lives along the way.
We want to show that it’s possible to save and invest, even if we’re pretty young (mid 20s), who don’t earn that much, living in an expensive city. But we also want to show what’s possible when you work hard, try to do the best with your money and your financial lives. You’re reading about our financial journey right from the start, hopefully you’re enjoying it and maybe even inspired by it. So thank you for reading and following our financial journey.
First full year down, we’re excited to see what 2017 brings.
What was your 2016 savings percentage and your 2016 dividends?
Onwards and upwards!