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How are my early retirement costs & targets holding up

A Rudyard Kipling poem begins: "If you can keep your head when all about you are losing theirs...". During these Covid-19 times, keeping my head means sticking to normal as much as possible and, as the end of the month ticks past, my normal is to do my costs and targets post.

But things aren't really normal, so this month I'm also going to see how my investments and income are holding up, which is where I'm going to start.

Investments & Income

Our early retirement investment portfolio

I'll start with a recap of what investments we hold. Compared to most people, we have a substantial bias towards rental properties at 61% of our portfolio - probably a bit much for my preference, but that's a different story. The next biggest slice of the pie is 33% of our money in low cost ETFs. The remainder is 5% in some more speculative (probably ill-conceived) investments and then we have just over 1% in cash.

If I could change one of the above for the current circumstances, I would have more cash. In theory, our cash should be enough for 10 months worth of costs, but I have a project in mind that will use a chunk of change. I'm hoping we have enough cash for both living and the project.

Our ETFs are down 15.7% from their high in mid February. Not great, but better than the FTSE 100 and S&P 500 which showed a decline of closer to 24% for the same dates. Our ETFs are 70% in stocks and 30% in bonds, so I guess it's the bond allocation that has helped. Since I retired early, we haven't drawn any income from our ETFs and I have my fingers crossed that will continue - we don't want to liquidate any ETFs while they are at reduced values. I think we should be OK, but it will depend on whether we go ahead and use some cash for the project that I mentioned and also whether our property rental income holds up.

The project (the subject of a future post) could be put on hold so that we don't spend that cash, but I'm not convinced it's the right thing to do. For sure we have to think of our finances, but we also have to live our life how we want to as well.

That brings us to the rental properties. These are more difficult to evaluate because they will lag the current circumstances. The properties may reduce in value but, in reality, their value doesn't matter as we're not intending to sell. What's more important is whether our tenants are able to continue paying the rent. So far, our rents are being paid, but that may change in the coming weeks or months. While we can't predict what will happen, I have tried to make some educated guesses. We have eleven, mostly small properties, of which:

  • 4 are very low cost properties with a rent guarantee. Last year these contributed 17% of our property rental income. I consider this income is fairly safe.

  • 1 is a student property near a university which also contributed 17% of our rental income. The students previously said they want to renew for the next academic year and I'm assuming they will want to complete their degree and therefore need accommodation.

  • 6 are smallish mid range properties (5 x 2 beds and 1 x 3 bed properties). Of these:

  • Two properties have tenants whose jobs seem quite safe, one's a teacher and the other is in the armed forces. These properties account for 24% of our rental income.

  • I don't know the occupations of the tenants in the final four properties that generate 42% of our rental income. I view these are being the rentals that have a higher risk of non payment. But statistically I would think the probability for all four to fail would be low. Maybe a more realistic worst case is that two of the four face difficulty with making their rent payments.

What might all that mean for our income? At a guess, but hopefully an relatively educated one, I feel that close to 80% of our property rental income should be OK which should allow us to cover our costs as well as doing our project. And if we had to liquidate a small amount of ETFs to make up the difference, we can do that. But my hope is that the rental income holds up, not just for us, but because it will also signify that our tenants are doing OK too.


It was a month of three parts: the first part was normal day to day living; the second was a nice type of different when we went on holiday to Dubai; and the third part was a nasty part of different when our world went weird, when we cut short our holiday to fly home before borders closed, ready to start our Covid-19 lockdown.

In terms of costs, we spent a normal amount during the normal part of the month, a bit more while on holiday as we rented a car and went out a bit more, and now we're hardly spending anything while in lockdown - just groceries and Sally's low cost/quality (her words) online shopping.

Early retirement costs - March 2020

I'm relieved that I haven't accidentally bought any expensive sports equipment this month, hopefully I'll manage to limit the big sports equipment purchases to the new touring ski gear that I bought in February and only go to use once before they closed the mountains. But if that's the biggest issue I have, then right now I'm feeling fortunate.

Overall, a fairly uneventful month for our costs. Groceries are a bit more than expected (we're not dawdling in the supermarket searching for best prices these days). We burned through a bunch of mobile phone credit trying to change our flights to beat the border closures, and Sally booked a flight to meet up with her sisters later this month which has since been cancelled and we'll have to chase the refund.


Every time I update my target tracker I think what a simple but good way it is to try to keep a focus on the things I want to get done. I tend not to worry that they aren't all green, so long as I'm heading in the right direction then I'm reasonably happy.

After struggling with a calf injury, I got in some good runs while on holiday in Dubai, including a 31km effort at a decent pace. The day after that run, I received an email saying that London marathon is postponed. Running is much curtailed during our lockdown so I've swapped some running for various exercise sessions on YouTube. If the weather's good, I do these on the terrace, which surely must amuse the neighbours.

Healthy eating is going OK. We all need a few treats, but I'm trying to limit them to sensible amounts. There have been a few occasions where I've eaten the complete bar of chocolate instead of the one or two squares that I meant to nibble on, but I reckon another alcohol free month more than balances that out.

And lastly on my targets, we got to catch up with loads of distant friends when we went to Dubai. Definitely the highlight of our trip.

I know there are other targets where progress only warrants an amber or red, but with so much negative news around this month, at least for my targets, I'm going to focus on the positives.

My early retirement target tracker


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