Financial review of 2021

Sharing the key highlights from our financial review of 2021 

• Expenses increased by 23.4% YoY: As we became 3 from 2, there were new expense categories introduced in our budget. Apart from these, we spent more on travel, home improvement , entertainment and commute.

• Savings rate at 83.62% was almost similar to 2020. Even though the expenses increased, we were also earning more in 2021 which helped to maintain our savings rate.  

• Equity profits increased significantly, as our investments in stocks and mutual funds saw healthy growth due to market rallies. Our portfolio's unrealized profit at the end of 2021 was 36.68% compared to 9% at the end of 2020. 

• We updated our FI target after a review in mid-2021. We also changed it from an absolute number to a multiple of X(our yearly expense). The increase in expenses was a key factor to raise the target as we allocated more corpus to cover our post-retirement expenses. A motivating factor for us is reaching our initial absolute target in later half of 2020. This boosts our confidence for the future. 

• Portfolio income was 18.83% more than our expenses. This includes all realized gains/returns from equity(stocks, MFs) or debt instruments(FDs, PPF, EPF). Another way to say that we were financially free in 2021. 

• Current net assets at 39X at the end of 2021. 

Financial Goals for 2022

• Maintain or reduce our expenses.
• Maintain or increase our savings rate to ~85%.
• Increase investments in equities. 
• Increase our net assets by 8-10X. 
• Regular review and adjustment if needed

Thanks for reading!

Cheers to a better year, and a better blog!