Savings Report #20 – You Knock me Down but I get up Again

This is a Saving Ninja savings report. Go to How To Track Your Savings to check out the Saving Ninja Super Spreadsheet. Please note that I split my expenses equally with my partner and the savings rate, house equity and house value represent my share only. The spreadsheet calculates my savings rate based off £12,000 worth of expenses per year, even though my expenses are actually Less Than 10k Per Year. This is to create a buffer; I’m aiming for at least 12k to reach financial independence.

Click here to see all of my past Savings Reports and view my interactive net worth chart

Woooow – the markets flipped out big time.

My portfolio dropped by £7,420 in value, this wiped out a lot of the interest I’ve ever earned since I began investing. My ‘total earned interest’ figure dropped from £10k to £2.5k in the space of a couple of days. Ouch.

Luckily, I’m still in my accumulation phase and with my continued hefty contribution of £5k into my pension and £2k into my ISA, I almost reversed the effect of this huge decline; but my total net worth still dropped by £204.

Actually, looking at all of my savings reports this month marks the first one ever where my net worth has actually decreased.

Sure, I’ve had some months where stocks have declined a lot (by over £2,500), but due to my massive contribution amount I’ve always ended up adding something onto my net worth anyway.

Maybe I should be rejoicing as this probably just means that I’ve finally got a decent amount invested? Enough to feel a hit like this.

Anyway, buy whilst they’re on sale! The markets will surely recover (they have since writing this!) I will be leaving things exactly as they are and depositing the same amount and at the same time no matter if what the markets decide to do. Simplicity is beautiful.

Remember, the worst thing you can possibly do is sell at the bottom, so don’t!

April is Approaching

One more month to go until the end of the tax year. I’ll be continuing with my big contributions next month, then I’ll have to review how much I want to lower it to after April.

What do you guys think is going to be announced in this years budget?

There are fears that the higher-rate pension tax relief is going to be scrapped. That would be a bit of a blow to my savings going forward – but I’d be glad I managed to max the £40k limit at least once. I’d just hate to see a lot more money disappearing in tax, but I suppose it’s got to happen at some point as I should ease off the pension sacrificing soon.

I’m considering going with a £1,666 per month ISA contribution amount per month after April – or do you think I should fill it up straight away then leave it for the year?

Or maybe I could put £9k in on the first month and then 11 months of £1k each? I don’t necessarily need such a big cash buffer (which is currently being held in a Marcus account,) but I do like having that cash there and deciding how much to transfer into my investments towards the end of the tax year, especially as I’m looking at switch jobs this year (or review contracting again).

But maybe it’s just silly to have over £20k held in cash when my expenses are only £10k per year? What do you guys think?

My ‘years to FI’ number has gone down to 1 year and 10 months. This is due to the first two months of the year having above normal monthly contributions so my savings rate average is being set to 87%. I should probably change how the average is calculated as the contributions will be going down by a lot in the coming months, but it will still take a while for my average savings rate to drop back down.

I was speaking with someone the other day and they were saying that my 6% estimated post-inflation figure for growth is a little unrealistic. It got me playing with different growth rates in my spreadsheet calculator and the new FICalc app

I was quite shocked when I found out that when you’re savings rate is so high, interest basically does absolutely nothing. In fact, I’d probably be better off just not investing at all.

If I up my predicted investment growth from 6% to 15% my ‘years to FI’ figure goes from 1 year and 10 months to 1 year and 7 months. That’s exceptional growth to save, what, 3 months?

If I lower my predicted investment growth from 6% to 0% my ‘years to FI’ goes up to…

2 years and 1 month.

Yeah, I’d have to work an extra 3 months. If I had no growth at all, I’d still ‘retire’ in around 2 years.

Maybe this is just cause for me going with a heavy bond portfolio instead of 100% equities?

Analysing this more closely I realised that for the ‘extreme’ FIRE pursuer seeking retirement in 5 years or less, compound interest is virtually useless.

If you truly did begin drawdown as soon as you hit your number then you’d never ever feel the effects of compound interest. The magic won’t happen. It only really starts if you’ve accumulated for more than 10 years.

This made me feel a little sad; if your able to save 75%+ of your salary and become FI in 5-7 years, you would be a very happy early retiree; BUT, if you’d instead continued to work, the compounding effect for that extreme saver would be ten-fold. You’d potentially have created generational wealth, but you’re ‘throwing it away’ for early retirement.

For example, instead of quitting work at 30 years old with £300k, I could continue saving the same amount until I’m 35 and I’d end up with a pot of around £780k. With no further contributions, that could turn into a hefty sum at 55…


That’s with no additional contributions after the age of 35.

Am I willing to throw away over £3m at the – still relatively young – age of 55 for a life of £12k per year leisure at 30?

Hmm, kinda!

But realistically, I’m probably going to meet halfway. I’ll definitely continue to work in some capacity after 30, but I’ll be focusing more on other things rather than solely my savings rate.

I really want to get SOME of the magic of compounding through-out my life. In order for this to happen, I’ll probably look to get to around a 2% withdrawal rate, that way I’d hope that the pot will continue to grow even in drawdown.

Maybe I’ll be lucky enough to have enough passive income to mean that I don’t have to drawdown my stash at all?

But yeah, something to consider: to extreme FI pursuers compound interest doesn’t mean shit!

Other News

I bought the cod liver oil capsules that Nick recommended, I’ve been taking them for a little over a week now. 

I think I feel happier.

I noticed that my eyes almost seemed to stay open wider after the first day. It’s extremely hard to know if this isn’t just a placebo effect though. I did feel a little sad for one day, but my mood generally seems to be up. It’s only been one week so I’m unsure what I’m really expecting! 

I’ll probably just continue to take them for now as they’re not too expensive when having one a day (sub £10 per month). Although I do think that mindfulness and consistent meditation may give me the same or a better effect; so I’d like to get back into that. I just need to find the time… I’ve still only read half of a book from Project Happiness 🙁


I’ve started to make a little bit of progress with my interview training. This is because I’ve begun to focus only on a singular subject rather than skitting around to a lot of different Computer Science problems. 

I’ve actually started a SCRUM board in my office and I’ve been adding each problem that I solve onto it via a sticky note with some hints on each. This has helped motivate me to try and solve at least 1 problem per day. 

My current area of study are Trees and Graphs. I’ve also been using a new note-taking tool called Roam Research to store all of my training notes; it’s been absolutely awesome – go and check it out!

Leetcode has also been invaluable as my one-stop-shop for Computer Science problems (especially as I can make a bookmark for a certain subject like this.) I’ll probably purchase their premium subscription soon so I can start doing mock interviews.


It seems like the world is going crazy over the Coronavirus. I’m just hoping that we can still go on our snowboarding holiday in April as we fly into Milan! 

The UK seemed to have finally got out of Brexit limbo and then this virus hit. Has the world always been one crazy thing after another and am I only now getting old enough to start observing the anarchy? Or do we not normally have this many life-altering events happen so close to one another?


This month has seen virtually no blog posts. I seem to have developed extreme writer’s block. Since I moved to my laid-back approach, I’ve been unable to begin anything new from my drafts list. I’m hoping this will pass soon.

Mrs SavingNinja has still got a half-finished introductory post that she begun writing last year, unsure when that will get finished, she’s really busy with work right now.

A lot of my effort is going into interview prep and app development. I still have two really cool app ideas that I want to get out there and I’m also in the middle of developing an app for my father-in-law. Life is busy right now.

These saving reports are, at least, easy to continue writing – so I’ll keep you guys in the loop!

How was your month?


22 thoughts on “Savings Report #20 – You Knock me Down but I get up Again

  1. Like pretty much everybody I took a painful hit in Feb / March but I’m continuing with my hold what I’ve got and keep investing. I’m currently using Salary Sacrifice and pension carryover to put 65k per annum into my work pension and drawing down on other savings to transfer into my ISA. All pension carryover will be used after the next tax year so I’ll then need to decide on what to do with the excess funding. I’m in a good position as I have a fully paid off rental property and a deferred DB pension scheme so I’ll have multiple income streams when I retire early. Depending on global meltdowns and the zombie apocalypse I think I;ll be fine.Of course I could remortgage my currently paid off properties and go bargain hunting in the stock market but I prefer the security of knowing my 2 properties are paid off.

    1. Good job David, keep calm and continue like normal 🙂

      That’s an insane amount to contribute to your pension, it puts my £40k to shame! Are you thinking about the lifetime allowance? Do you think you might breach it?

      1. Thanks for your response. The LTA is a concern and I suspect I’ll come close to breaching it. However it all depends on whether I keep working and If I transfer out my deferred DB scheme. If I keep my deferred DB scheme and then just take it as a pension at 55 I don’t think the LTA will be an issue. However, if I did transfer my DB scheme I’d be at about 90% of LTA aged 48. Lots of considerations. My pension saving rate is so high as my other income streams mostly meet my day to day needs so I’m pretty much FI already. If I didn’t make such high pension savings my household would lose Child Benefit and my rental income would be taxed at 40%. I’ve got one more financial year of pension carryover let and then I’ll be bound by the £40k annual allowance.

  2. If you can it’s better to invest lump sum rather than drip feed. The cash you hold loses the opportunity cost of it earning a potential return and, inflation-adjusted, is will just erode. If you feel over the medium to long term equities will deliver you a return, drip feeding in at ever increasing prices (as markets rise more often than they fall) is inferior to a lump sum today. Obviously with highly volatile markets we have right now that might feel like a tough decision but we are playing the long game. Good luck

    1. I do like seeing my investments incrementally improve. The worry is that I’ll end up going contracting, then I’ll need the money – although I will of course still have the money when it’s invested, I just wouldn’t want to take it out 🙂 Maybe I’ll put £10k in or so; £10k-£15k seems like a nice amount to have for an emergency fund – regardless of my expenses.

  3. It’s not nice seeing your net worth go backwards but it’s the nature of investing and you’ve many years of investing ahead of you.

    Regarding filling up your ISA in one go or investing monthly, as Dan says, I think studies show that if you have the option to invest the lump sum, do that. Most people (eg me) don’t have that option so only investing monthly.

    Whilst I have gotten to see some of the benefits of compounding in the growth of my investments these past years, I won’t see the true benefits because I didn’t start early enough. Someone like yourself though will see the real benefits but in like 20 years time, as per your example.

    So yeah, compounding and extreme FIRE don’t really go hand in hand, unless those retiring at 30 had their parents investing for them on the day they were born!

    I was due to fly to Hong Kong at the end of next week, now not going until later in the year. Hope all is sorted so you can go on your trip in April.

    I think the world has always had crazy things happening – if you didn’t read newspapers or watched the news on tv back then, you were largely oblivious to it. With everyone endlessly blasted with updates on their phones these days, it’s hard to ignore or not hear about it, hence it seems crazier!

    1. Yeah – I need to decide how much cash I want to hold and then just deposit the rest. A lot of that pot was in bookie accounts over the last year, if I ever got back into matched betting, I’d want it at hand. Maybe it’s worth it to have at least £10k ready to ‘invest’ if you wanted to try out a new business venture?

      That’s sad about Hong Kong 🙁 We’ve decided that if we can’t go into Milan for whatever reason, we’ll just drive to Switzerland. It sucks as we were meant to see my family for the first few days and if we drive we’ll not get to visit them.

      Good insight about the world always being crazy 🙂

  4. Well done in containing the market downturn in just a £200 loss! That’s the magic of being in (relatively early) accumulation phase. your savings contributions play a bigger role than your investments fluctuation. But still it hurts to see all your monthly savings being wiped out, doesn’t it?

    If it hurts at this size, you can imagine at 10x 🙂

    Good luck with your Algo training, I’m available for help once you’re closer to the goal 😉

    About Roam: I’m using it extensively but also worried that they might charge 30$/Month later this fall. What’s your take? I assume you’re not ok with 360$ per year for the next N years, even though the product is AWESOME.

    1. Thanks! 🙂 I think it hurt initially, but really it’s just my ‘Monkey Brain’ who is experiencing that emotion because when I really think about it – crashes like this should be amazing for me; better now than in a year or two. It’s kind of like an opportunity for me to catch up!

      Your help has been invaluable so far 🙂 I have started scheduling some interviews for ‘training’ 😉 Taking your advice, one is at an investment bank, which I’ll be scheduling after April half term.

      That SUCKS about Roam, I wouldn’t be able to bring myself to pay that much 🙁 I hope they will let us take our data out before they begin charging?

      1. I’m “Exporting All” almost each day (markdown documents, my database is something like 400kb) and saving in other clouds.
        Now the temptation to write my own “Roam-like” software is high 😀

        1. YES! That would be awesome! Reduced subscription for FIRE-friends? 😉

          It would be some awesome practice for my Graph training to help you build some algorithms 😀

  5. Yea Jacob mentioned on more than one occasion about extreme savers not seeing the benefit of compound interest on their way to being FI. However as you will continue to earn in some capacity (just like Jacob has done) and if you keep low expenses then you will definitely see the benefits of it in 20 odd years time. Just think even if you FIREd with 300k pot, kept expenses as they are but did a few bits on the side to cover them, your pot would continue to grow. Chuck in a few big contracts or random bonuses along the way and who knows you might one day be in the baller 15k/year spending bracket 😉

    Well done for not losing your sh*t about the market drop. I never experienced one at the beginning of my investing so never really felt what it was like that early on.

    Oh also you mentioned mediation etc… I think last month you mentioned that headspace was so expensive otherwise you’d try it… I checked and it’s only £40ish/year… Surely that’s worth it if you think it might help your mental health?

    All the best as always mate

    1. That’s the dream, £15k per year!! 😛

      Everyone always says that you don’t know how you will react until you experience a big correction, but honestly, I think I’m just too lazy to care too much. Obviously, yeah, if I were on the brink of retiring I might be a little more worried; but right now I don’t see the point… Besides, I’m too much of a worrier in general, I can’t afford to take on more worry!

      Expenses being so low is definitely the crux here though, and maybe the fact that I don’t have a family to support either.

      Ahh, I just can’t with Headspace. Even though they are clearly the best app on the market, there are too many free meditation apps to warrant spending double what I spend on Netflix just for meditation. This all goes back to the struggle I have with value again.

      One area I am improving with spending is my interview prep, I’m strongly considering buying LeetCode premium which is £20 odd per month which is insane for me. I reckon I’m justifying this by saying that it will get me a better job/higher pay.

  6. Yikes. Since the markets have kinda stabilized a bit (for now at least), I reckon you’ve already recovered some of your “losses” 😉

    Glad to hear the capsules appear to make a little difference – even if it’s just placebo! 😉 I think the arrival of spring/summer is also going to help lighten your mood (I know it typically helps mine at least!).

    I guess it’s months like these that should have you focus on the bigger picture. When I first started reading your blog, your net worth was at like £75,000 or something like that. Now it’s almost double that! I know it’s your savings rate that’s “working the magic”, but once you’ve reached your FI number, you’re still going to benefit from compounding in the long run (maybe you won’t even have to ever touch your principal?).

    Do you think you’re going to be able to maintain your motivation for working, once you’ve reached FI? I’d be worried (remember I also work in IT) that I would just lose my shit one day, and quit on the spot over some argument about office politics with my boss 😛

    1. It can be tricky maintaining work motivation once you hit your FI figure. I also work in IT and there are some days when I just feel like rage quitting which I could feasibly do as I’ve hit my FI figure and should have sufficient income streams to never have to work again. Hitting your FI figure at least gives you the choice as to whether you have to keep coming to work in a potentially toxic environment. However, the current market turmoils are motivating me to stick with work and see what happens to the economic situation … at least for a few months longer.

    2. You jinxed it dude! They’ve dropped again 😀

      Yeah, it’s strange how towards the end of winter, your mood starts to look up again as you begin to ‘get into’ the new year. Looking at the bigger picture is actually the one best thing that I’ve experienced with blogging. The amount you forget is insane, having a journal where you can literally look back at what you wrote about (and where your finances stood) a year ago is invaluable. It’s enough to make you appreciate things and be happy all on it’s own 🙂 Cheers for the reminder – I think I have actually increased my investments by £75k in about a year and a half (3 quarters of my total amount!)

      Haha, maybe I will lose my shit. I generally lose my shit and job hop after a year and a bit anyways though, so I guess I’ll just continue to job hop. There are too many cool opportunities in London.

      I do hope I’ll begin to focus more on happiness rather than earning after I’m lean FI though!

  7. Considering any money put into your pension is effectively locked in till you are in your late 50s, you will have plenty of time to see the money in there compound. Definitely keep that stuff in equities!

    As for the stuff in ISAs/general savings… that is the stuff that needs to keep you going for until you can access it. That is the stuff you will want to ensure is there when you need it (but also has a chance to work for you).

    Good luck working out which algorithm works best…

    1. This is actually really true. I’m probably putting far too much into my pension… I need to revisit my plan next year 🙂

  8. I also had a very rare “backwards” net worth month, but, really, long term it means nothing, as you said. In regards to the large amount you “give up” by quitting early, surely that’s the benefit of not worrying about working any more. You could always go back, if you really wanted, but why the hell would you? Long as you have your bridging strategy ready… 😉

  9. Well done on avoiding not too big a drop – I recall you saying you were in 100% equities? I’d shifted quite a large chunk of my savings/pensions into bonds back in December based on one of Monevator’s articles on risk tolerance and it seems to be paying off okay! Though that move was complete and utter luck on timing, no doubt. My equities have dropped a good 5 figures but the bonds have cut that loss to a low 4 figure sum – but I’m strangely not panicking yet 🙂 Next problem is when to switch some bonds to more equities… ah the joys of being young!

    Keep buying in if possible!

  10. “I’m considering going with a £1,666 per month ISA contribution amount per month after April – or do you think I should fill it up straight away then leave it for the year?”

    I thought about this last year and decided to, once the new tax year is upon us, to divert most of my savings into my ISA to fill it up as soon as possible.

    Nice work with the planning / interviewing training / algorithm based work! Got anymore ideas on which company you’re thinking of working towards / going to? (PS – If it’s Valve / Blizzard, I’ll be insanely jealous! :P) (PS – If it is Valve, I’m putting in a request to obtain a copy of Half Life Alyx early :P)

    Hoping we can all get through this none the less with the investing / saving side of things!

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