I must be getting older as this update seems to come round even quicker! It is one of my favourite updates though, even though some months are better than others. Each month, I can see us inching slowly towards our goal. There is nothing more transparent about aiming for something than documenting it. In fact, we’re nearly at the stage where we’ve got our first year saved! It’s taking longer than I’d like, but at least it’s going 🙂
The Ultimate Dream Fund is named because it is our dream to retire early, and we need the funds to make that happen! One day, this fund will provide us with the money to live on when we leave our 9-5 jobs and time will be all ours. That’s the biggest motivator for achieving our goal. Being able to spend our time with our family is what we’re doing this for; there’s nothing more meaningful to us than that. I keep reading about people who have managed to retire early already and it’s very interesting to read! I cannot wait until we get to share things like that too ? but, I do need to remind myself to enjoy the present too. Frugal Baby makes sure of that!
I continue to post updates on our fund for two reasons. One, so that I can show that living a frugal lifestyle means that we can retire earlier than we should do and still live a good life on the journey. Secondly, to keep me motivated for the long haul. This journey is going to take us a long time, but it’ll be worth it in the end. This plan also includes us being mortgage free, so that our monthly outgoings are reduced and manageable. Also, when I feel like I’m not doing enough, I look back at the posts and see how far we have come ?
July’s dividend income has already been reinvested so that they are working hard for us. A post will be up on Monday about what we were paid. Receiving dividends throughout the month means that I get multiple small pay checks each month. For doing nothing! I still love the dividend investing approach. Over time, the percentage reinvested will increase and so the amount needed to be saved from income will decrease, or we’ll be able to speed up the process! All of this is within my stocks and shares ISA which is with Hargreaves Lansdown. It is very easy to use and I’d definitely recommend them.
As of July 31st, our Ultimate Dream Fund looks like this:
So, better than last month! In fact, everything has been fairly steady this month in terms of investments, which is good. The fund has increased by £733.69 and I put in just over £700 throughout the month. Nothing wrong with months like this 🙂 And, as we’re aiming to have £18,000 a year in retirement, we’re almost at our first year saved! I think the first few years in terms of monetary savings will be the hardest.
Finally, here is the fund’s progress since I started it in June 2015:
How was July for your savings/investing targets?
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Nice work Nicola. I have removed some money from my S&S ISA this month to pay off a debt – a paper profit as the markets are so high – it felt good and I am building up the fund again now. Agree it’s great to have a goal and writing it down publically makes it easier to stick to it, or comeback to it when things slip!!! Glad you’re having a great summer
Paying off a debt is always a good idea. You’ll build your fund back up in no time 🙂
Love reading these monthly updates! Can I ask what the different colours on the bar represent?
The different colours are the years – blue is 2015, orange is 2016 and yellow is 2017 🙂
Hi Nicola, how did you get started? X
Hi Bernie,
I did lots of reading around investing and savings, researched about early retirement and took the plunge! 🙂
Hi Nicola, I’m really keen to try and increase my small nest egg which is currently sitting in a premiums bond account hoping for luck to work it’s magic. Obviously like a lot of people I haven’t a clue how to improve my savings. Do you have any suggestions where I can read up on starting off. I have been looking at property bonds but to be honest I’m so green I’m not sure which way to go. Any suggestions will be gratefully investigated. Good luck with your fund, brilliant achievement so far.
Belinda
Dear Belinda,
Good luck on your quest to improve your savings 🙂 I started off my reading a lot, about investing in general and how stock portfolios work. This is a good book to begin with: http://amzn.to/2ugwzBP 🙂
Why are you receiving dividend cheques rather than having dividends reinvested automatically? I can see it gives you a psychological lift getting the cheques, but it takes time to have them sent to you, time for you to pay them in and time for the bank to clear them, during which that money’s not earning anything. It’s probably costing about a week’s interest on each cheque, plus you might find you’re even been charged for them. If you set the account to invest automatically, it’ll save you both time and money (although do check the account’s T&Cs, as some charge more for automatic reinvestment).
In addition, dividend cheques imply that your account is set up for income rather than growth. At your age, you should be investing for growth, only switchint to income about 5 years before your projected retirement age.
Good luck with your fund, and well done on having such a strong goal to work towards.
When I say I receive dividend income, it is automatically kept within my s&s isa, so no cheque as such. Once the dividends have cleared, I can invest them straight away so no waiting around. My account is set up to provide an income, whereas growth is secondary (though it is happening at the same time which is good). Thanks for stopping by!
Ah, I see – that makes sense. I thought you were doing it old skool and getting cheques in the post. I would suggest that you have a look at your ISA and see if you can move more of it into growth funds, though; they should give you a higher rate.