This will be our second monthly summary. If you want to check out the first one, you can find it here.
Things look good this month, in no small part due to Mrs. BPR introducing the frugal month challenge to the household. So let’s get started.
This chart shows the history of our monthly income, expenses and the corresponding savings rate:
81%. Boom. What does that mean? It means that in the 1 month of April, Mrs. BPR bought our family 4 months of retirement. That’s probably not a sustainable average (in fact I know that there is going to be a bit of a rebound effect next month), but it is clearly doable on a monthly basis. I’d like to see a lot more of those 80%+ spikes throughout the course of the year.
Next up, where is the money going if it’s not immediately going out the door? The chart below shows the relationship of our net worth to our target savings (calculated using monthly expenses multiplied by a factor of 28.6 derived from a SWR of 3.5%):
It’s smaller than 81%, but in some ways that 71% is much more encouraging. Being less than 30% away from a target actually makes it feel like efforts are paying off.
Finally, the chart below gives us a different perspective on how much further we have to go. The black dots represent estimates of how long (in years) it will take us to reach our target if we use the same assumption of a safe withdrawal rate of 3.5% and combine it with an estimated compound annual growth rate (CAGR) of 5%:
You know what that last dot on the right is? 1.5 years. Less than 2 years. You can do almost anything for less than 2 years.
Oh, and one more thing. In addition to the dollars and cents, I’ve also been tracking the number of transactions that take place. The average number of transactions that I have recorded on a monthly basis for the preceding year was 110. This month it was 62.