Year 2015 in review

As the year 2015 has just ended, let's take a look at how the year has treated me. 

Annual rings by Liga Eglite on Flickr

If and when I have time later, I'll elaborate some points further.

Portfolio valuation and savings

This year has been a really interesting one for me personally but on the savings front it has been rather boring actually. I've been making monthly contributions to my portfolio and that's mostly it.

Without further ado, here's my 2015 results. The blue line is the value of my portfolio and the red line is cost of the portfolio.

Portfolio valuation and savings. The blue line is the value of my portfolio and the red line is cost of the portfolio.

Let's look at the numbers in more detail in a table:

	30.12.2014	31.12.2015	change
cost	38291 euro	50458 euro	+12167 euro
value	47866 euro	63820 euro	+15954 euro

So, during 2015 I contributed 12 167 euros to my portfolio, which is a bit over 1 000 euros per month. My net income was about 36 600 euros so that's a saving rate of about 33.2%. I have to say that I'm quite pleased with my savings.

Portfolio valuation and market craziness

The value of the portfolio appreciated by +3786.31 euros, which was an OK performance but certainly nothing special. The below chart shows the TWR return calculation (in blue, left scale) and the EUR/USD (in red, right scale) currency rate.

TWR return calculation (in blue, left scale) and the EUR/USD (in red, right scale) currency rate.

The chart shows the beginning of the year rally that we experienced: went up almost 15% from the beginning of the year until mid April. The year closed with about an 8% gain. That's a good result but it sure was a bumpy ride.
Quite a few positions in my portfolio are denominated in dollars so the dollar/euro rate impacts heavily on my valuation, as you can see my TWR and EUR/USD rate are somewhat negatively correlated. New purchases I'm currently mostly making in euros to reduce my currency risk.

Mortgage payments

During 2015 I paid off 4736 euros of my mortgage. There's still plenty left. As the euribor rates are super low at the moment, I don't see any reason to contribute more than minimum to mortgage for the time being.
I can't tell yet if this will be considered an investment or not but if were an investment, my total contributions to my net worth would be 16 903 euros or about 46.1% of my net income.

Conclusion

2015, you have been a boring year for saving, a crazy year for investing and a very interesting year for my personal life. Let's hope your sister, 2016 will be less crazy although we could be headed off a cliff.

Beginnings

 

Tilley441 of Flickr: frog burns

Here goes nothing, right? :)

I'm Jukka, a 30-something guy living in Finland. I am starting this blog to document my journey in beating the involuntary pension ponzi scheme I am in. Other motives include wanting to learn more, document and clarify my ideas, get feedback; to think outloud basicly, and help me stay my course.

A couple of years back it occurred to me that even though the Finnish welfare state takes 25% of my salary as pension insurance payments, I'm not very likely to see much return on that investment. The main culprit here is the fact that most of those payments are going to finance the pensions of the elderly people who are pensioners now. Or in fact, actually the pension payments to current pensioners actually just crept above what is gathered from as pension insurance payments. That sounds like a ponzi to me! Let's check Wikipedia:

"A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator."

Yep, that's a ponzi right there! It's not getting any better either... The dependency ratio in Finland will go through the roof for the next half a century as the big generations (born after WW2) are taking their pensions. The pension insurance payments are projected to go up and the future pension payouts are projected to go down.

Also, there are political risks involved. The age when people get to take their pensions is frequently being increased. The target pension age for a currently 30-something is around 70 years already.

In short then, we're all screwed and it's about to get worse. But most people around me are doing nothing. Most Finnish people don't save for retirement. They think they're covered by the state. They are not. They are the frog in the water that is about to get boiled alive.

My plan to beat this ponzi is by means of saving and investing. Let's see how it goes. Wish me luck, I'm going to need it!