It’s that time of year where we stop, take a breather and assess what was good and bad about the year. As I’m sure everyone on the planet is aware, 2020 was an exceptional year for many reasons.

2020 saw us have a pandemic, lockdown, Black Lives Matter, a new US President, another lockdown, a Brexit deal, and a vaccine.

The lows and highs

In my life, starting with the challenges, the lows were:

1. I lost my job in May;
2. I got COVID 19 in December;

If I’d lost my job any time prior to 2020, I’d have been screwed. However, thanks to my emergency fund, it was really not that stressful from a financial perspective. I was able to focus on getting a new job, rather than facing financial ruin.

My Covid experience was really a kick in the teeth. Just as I wanted to be winding down and enjoying the festive period, I instead spent it feeling rotten. With the new strain running rampant through London, contracting Covid ended up costing me 2 weeks of time feeling like shit. Thankfully, I’m better now.

But 2020 was actually an insanely positive year for me in more ways than one.

1. I got engaged;
2. I changed my career;
3. I increased my networth by £75k, which is 24%.

Firstly, my lovely partner said yes on a beautiful scenic walk in the English countryside in August 2020. It seems like a lifetime ago now. We are both thrilled to move into the next stage in our relationship.

My new job was a combination of luck and years of trying to push my career in a new direction. Being made redundant is a huge blow to your confidence. I know the redundancy was due to COVID, but being singled out (along with 20% of the company!) for redundancy was a still blow. I believe it was due to my being new to the company, and being paid a higher salary than my colleagues. Upon reflection, the company had a toxic culture which I am glad to see the back of.

I used the experience to hold out for something better. I actually turned down opportunities in my previous field of project management as it was more of the same, and I’d been trying to leave it for ages. In fact, weirdly, I was almost relieved to be getting out.

I’m glad I did. I ended up on the same salary in a new field as an Expert Witness. I have a lot to learn but I’m loving it as it combines my construction and project management knowledge, with my legal studies. I’m at a firm which is recognised as being at the top globally and working for a super star in the industry. I’m hoping to go places in the new company.

My 2020 goals.

(I don’t believe I published these so here we go).

• Fail – Take up a sport like squash or cycling seriously.
• Fail – Apply for and obtain pupillage
• Pass – Keep savings rate above 50% for the whole year
• Pass – Refit bathroom
• Fail – Break through the £400k Net worth barrier
• Pass – FIRE fund of £170k

I’ve achieved 50% of my goals.

Cycling and squash – I didn’t play a single game of squash this year which is mainly due to Covid. I have no excuse for the cycling. I did a few long rides in the summer, but not cycling to work really disrupted my cycling habit. I need to take this failure on the chin and make up for it this year.

I came close to obtaining pupillage as a Barrister this year having a second-round interview which I did ok in. I really need to think seriously about continuing to pursue this as I think I might be better continuing in what I’m doing. It takes a lot of time and energy to apply and a lot of stress. I never know whether it’s flogging a dead horse, or one of these, ‘keep going’ because I’m so close and might make it things. It was a dream from 5 years ago. I studied hard for it, but is it what I want now? I feel like it might be time to move on with my life, and put it down to experience. I certainly got my new job because of the efforts I made in my Barrister studies, so it did have a positive impact. A case of aiming high and falling short, but still high, nonetheless.

The bathroom is awesome and I’m really glad we undertook that project.

Savings rate

My overall savings rate for the year was 62%. I’m really frigging pleased about that. Smashed it out the park. Last year I managed 41%. It does beg the question of how much I would have saved during a normal year, but let’s aim high again for next time. I’m at the point where this level of saving is maybe too high, and I should spend a bit more.

I missed my stretch target of hitting £400k networth, but aiming high and falling short at £383K is not bad.

My goal of hitting £170k in my FI fund which was a stretch goal, was also exceeded at £173.6K. Well done me! That was assisted by the £18k windfall from my redundancy pay out, but I think I would have been close even without it.  My FI fund in Jan 2020 was £129k, hit £110k (maybe lower) in March, and is now £173k. That is a success in my books.

Disappointments

As it was 2020, there were bound to be disappointments. We wanted to go to Australia to visit family there, that did not happen. We also had planned to get engaged and even get married this year. Though the engagement happened, it was delayed, and the wedding was not on the cards due to logistical impossibilities caused by Covid 19. However, we can put these behind us and be thankful everyone we know and love is safe.

I started a website, it didn’t take off (not this one although the same could be said here too!). But I learned a lot about websites.

I also started a limited company as a legal consultancy which did some work, but since I’ve my job, my focus has been on the job. I have mixed feelings about that, but I see the job as a better path for the future as I’m working on some seriously big international cases, where as my own consultancy was working on really small cases which don’t interest me as much.

Goals for 2021

Here is my stab at goals for next year.

• FI Fund of £230k;
• Networth of 430K;
• Increase income by £20k;
• Maintain a savings rate of 62%;
• Purchase a car;
• Establish a growth fund for my investments;
• Get promotion at work;
• Cycling at least twice a week.

Review of the 2020 numbers

The rollercoaster of the stock market back in March was my first test of nerves. It was the first time I’d had skin in the game through a serious crash. I didn’t sell and held out.

Savings

The amount I saved last year and this year was as follows:

2019: £27,029 invested

2020: £52,549 invested (+94% on 2019).

Note that invested includes pension (employer, tax, employee), ISA, mortgage equity, cash savings.

I’m pleased with this as it increased a lot despite me being unemployed for a while. It does include the lump sum from my redundancy (£18,000).

Networth

2019: £309,077.

2020: £383,768.

An increase of £74,691 (+24%).

That includes a modest increase of value in my flat of £10k, plus the amount I paid off the mortgage.

I am very happy with this increase and although short of my goal of £400k, its still an increase nearly the same as my annual salary of £80k.

FI Fund

I measure my FI fund as my pensions, ISAs, savings, and cash together.

2019: £124,388.

2020: £173,635.

An increase of £49,247 (+39%).

However, that is not the whole story as something odd happened with the investment returns…

Returns

My pure investment returns (as opposed to increases due to earned and saved money) are as follows (excuse the currency):

Trailing portfolio return (time-weighted return, comparable return)
Portfolio return as of	31/12/2020
1 month	0.3%
3 months	7.1%
6 months	8.1%
YTD	1.9%
1 year	1.9%

Although I managed to sock away an enormous amount of money (£52K), my returns have been fairly poor. Only 1.9% return for 2020 compared to 15.6% in 2019.

I must admit this was a shock as I had not been keeping the returns spreadsheet up to date and had assumed I had made more. But the numbers don’t lie, and it’s a lesson to keep on top of the tracking so you can take action. However, it ties in with what my broker was saying so I really should not have been surprised!

I use the bogleheads return tracker to calculate this.

Why was this?

It was primarily due to the FTSE 100 losing 15% of value this year. My portfolio was weighted toward UK and only gained the 1.9% thanks to the S&P500 climbing. Am I disappointed? Of course I am. I thought that as my Networth had climbed so much I’d made a killing, but it was only because I’d been putting so much away.

Positives, it means I have more in my account to compound next year. It also motivates me to really try to grow this next year. My overall strategy is to buy and hold so really this shouldn’t bother me much. I feel like it is a tightly stretched elastic band ready to start working for me.

Onwards into 2021 I go.