2020 Financial Retrospective

As it was expected, with the year’s end, we see an increase of the retrospective, planning, progress articles and so on. And of course our FiinRomania blog has it’s own.

We will first pass on the financial goals we set in the beginning of the year, see what we can check out from there, then we will see how our portfolio handles the end of the year and maybe add one conclusion or two.

People always understand everything in retrospect

Agnes Denes

Now back the checklist of our Financial Goals Article (for 2020).

Financial Goals Check

We will start with the ones that are NOT DONE:

P2P GOAL: We already have a 1000EUR account (1.120USD), not taking the accumulated profit into consideration. But it will be nice to have another platform with a 500USD investment to start. In terms of profit I target a 10% return on the account.

This one didn’t happen. We had some other priorities and the P2P market was also a bit affected by the coronavirus. To be honest, we avoided a 500USD deposit in a new platform and even withdrew some money. We put them back close to the year’s end and finished with a total of 1.459USD. But we checked the 10% return.

FOREX GOAL: Respecting last year’s plan, should make a contribution of 600USD (annual contribution) and we will see a total value of the account of 2740USD (that is around 900USD in profit).

We can check the contribution of 600USD, in fact we contributed @900USD but we definitely lack the money to reach the 2740USD mark. This is due to mistakes made in February and March (due to COVID) and just struggling to wrap up the situation. We were down –750USD in floating minus and we reduced it to –260USD and reached an account of 1421USD.

State Bonds Goal: I still consider them a good, low-risk investment. Currently there are no interesting offers in Romania, maybe except last year’s program (‘Tezaurul’). I will take a look at external markets. I have no real target here, but the 400-500USD investment is possible.

This year lacked attractive State Bonds. The ones I was eying last year weren’t profitable anymore this year. I think another program was launched close to November/December, but we had other priorities to invest in.

Mortgage Goal: Except all listed investments, we consider paying in advance the mortgage, and as a sum two months should be enough.

We had the money raised in the emergency fund, which we could use to do that. But some other plans came up (already stated in the portfolio updates topics, but we will come with a recap soon).

Economy Goal: And for the last goal, put back in the economy buffer 2000USD (this is an addition to what we already contribute).

I would like to say that this is done. In my opinion is done considering what expenses we had, we still manage to complete 43% of the goal. I am happy with the progress.

DONE goals:

STOCKS Goal: This is the biggest goal of the year. And I am interested in BVB (‘Romanian Stock Market’) stocks. My end target is an investment of around 1100USD.

Finally a goal we can affirm it’s done. We have exposure to both the Intern market and Extern Market, with two accounts totaling 1110USD.

ETFs Goal: are our priority 3 on our investment list. In fact, if we are going with the BVB stock market, there is also an internal EFT listed there. So….maybe we can hit two birds with the same stone (ETF+STOCKS on the same account). Of course, the target for ETFs is 500USD invested.

The second goal which is done (even if we are a bit shy on the sum), is the investments in the ETF. We have selected Internal and External ETFs, with an account of 292USD. But because of the exposure we have and the autoinvest settings, for me this goal is completed.

Portfolio Development 2020

December 2019 – Asset Distribution
December 2020 – Risk Distribution
December 2019 – Risk Distribution
December 2020 – Risk Distribution

We can see a big difference in the first picture, consisting in addition of new assets (ETFs and the two Stock categories) and the proportion allocated to already existing categories.

AssetDecember 2019DepositEnd PeriodGainGain %Increase %
Forex1294.381032.181451.03-875.53-68%13%
Crypto622.7-269.23789.83436.3671%27%
Mutual Funds1131.71615.381869.74122.6511%66%
P2P1257.12-42.181483.08268.1422%18%
Stocks I.01009.761135.9126.1413%113%
Stocks E.0185.72211.5825.8614%114%
ETF0273.55291.117.557%107%
Total4305.912805.187232.24121.173%68%
Asset Increase: Asset, Deposits, Realized Profit, Increase versus December 2019
AssetDecember 2019DepositEnd PeriodIncrease %
Economy Fund693.17-211.31471.86-31%
Emergency Fund1673.972367.764041.75142%
Total2357.142156.454513.5992%
Asset Increase: Asset, Deposits, Realized Profit, Increase versus December 2019

Look at that, if my calculation is correct and if I entered all the numbers in the right places, with a reference rate of 3.9 USDRON, we have a total gain of 121.17 for our portfolio (actual gain). Taking into consideration the deposits, we increased our portfolio with 68%. Guys…I am happy!!!

Taking a look at last year article (Financial Retrospective 2019), we definitely nailed the conclusion.

The budget and plans for this year were set a bit on the side track because: the big loss in FOREX due to bad risk management (and COVID), had to invest in the old car and the dental interventions for both me and my wife (almost 5000USD). But I think that the most important aspect is that we are healthy, happy and our portfolio grew with almost 4% (the original F.I.R.E. target).

Wrap-up

To wrap everything with a nice ending (as this is the last article for 2020), I will come back to a mail I received from my subscription to David Bach (a financial guru I really enjoy reading). The mail title is Finish 2020 strong by asking yourself these questions!.

I will not put all the questions here, but will respond to some:

  • What went well for you in 2020?
  • Definitely the fact that I worked from home and was closer to my family. Financially, the fact that I finally got to get a better foothold in ETFs and Stocks.
  • Looking back at 2020, what are you most grateful for?
  • That we are in good health.
  • As you think about your career and business in 2021, what do you really want to see happen? And why is that so important to you?
  • I would really enjoy a salary increase (but then, who doesn’t). But I think what I want the most is to get back to what I was doing before this year, I think I enjoyed it more as I was in a particular niche.
  • What do you need to remove from your life this year? What is no longer serving you or allowing you to live your best life now?
  • My hairline receded a lot because of this year’s stress. Guess I can live without also. I grew my beard longer.
  • Are your finances as strong as you want them to be? What are you going to do to improve your financial situation in 2021?
  • My wife is going through a career change at the moment. That will have an impact in the first half of 2021, but I really hope we will get back on track in the second half and our finances will improve.

That is all for this year. See you in the first article of 2021, our Financial Goals! Thank you for being our friends.

Disclaimer: I am not a financial consultant, all the information you find here are my decisions, I taken at that moment, on my own analysis. I am open to any type of discussion about money. If you want to replicate my portfolio take into consideration that it is your money.

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