November 2022 Update: Electricity, Net Worth, Portfolio

We got a refund on our electricity. Hallelujah.

In 2016, I got it into my head to track our electricity in a spreadsheet. Weirdly, we're required to do our own meter readings and report them to the power company, and since the meter was right there in the apartment, I figured I'd track it. Every Sunday and first of the month, I dutifully snap a photo of the meter. Each photo's numbers gets plugged into a weekly or monthly spreadsheet, which tells me the change week over week or month over month. Add in some spreadsheet functions, and I can see how we're doing in a given year and how our usage has changed over time.

Image: Chart of average weekly electricity usage over time. Does not include heat, which is a separate bill.

Until recently, our average had steadily been moving upwards. This felt inexorable until we made some drastic changes. The main one has been reducing the shower's heat. As I've written before, this means lukewarm rather than luxurious. I also only run the shower when rinsing; while lathering up, the water is off. Both of us are in and our pretty quickly.

Long story short, we managed to save enough electricity to warrant a small refund from the power company. This was a nice boost to November and a pleasant surprise in a sea of horror stories about electricity prices.

All in all, I recommend this practice of proactive electricity usage tracking. Obviously, if I had a smart meter, this might be easier, but this current process forces me to stare at results and ponder why one week was higher or lower, which has prompted changes.

Net Worth

Image: Chart of our net worth in USD since 2013

Our net worth rose 5.33% in USD and .52% in EUR to $128,316 and €123,857 respectively. Liquid net worth stands at $99,626 and €96,164.

Euro Strength

The main driver of the discrepancy between USD and EUR returns was the strengthening euro. Last month, the euro could buy $0.98871, while now it can buy $1.036. That blunts the upward movement of gains in a USD portfolio.

It's fine by me though. One small benefit is that credit card purchases made on US credit cards are cheaper to pay off since the value of the debt has shrunk over time thanks to the currency movement. Yes, I track this.

Portfolio Performance

Image: November portfolio performance as a percentage. Green line = Wiseguy portfolio, yellow = individual US-listed stocks, red = S&P 500, blue = IRA

My portfolios, with the exception of my IRA, outperformed in November. The Wiseguy Portfolio did especially well, rising just under 8%. This was led by the strong performance of the Avantis International Small Cap Value ETF at 12.82%(!), the Vanguard Long Term Bond ETF at 8.55% and the abrdn Physical Gold Shares ETF at 8.45%.

Image: Breakdown of returns within the Wiseguy Portfolio in October and November vs. Vanguard's S&P 500 fund.

Portfolio Changes

Image: My IRAs in blue vs. the S&P 500 in red in 2022

After the last day of November, the trend following rules were hit, and I bought Vanguard's Total World Admiral Shares in my IRA. It is entirely possible that I'll get whip lashed out of that position if the market resumes a downward trajectory. Them's the breaks with trend following.

Near the end of November, I sold Exxon Mobile for a small profit. The proceeds were sent to the Wiseguy Portfolio at the start of December. I'm not good at holding oil extraction companies and should probably avoid them. Berkshire and the small cap ETFs have significant exposure to energy commodities as is.

Other Factors and December Outlook

We received the yearly family subsidy for my wife's piano lessons. That will be stored in our high yield savings account.

December is shaping up to be a mixed bag, savings wise. Christmas is generally expensive, but I also receive my holiday bonus. However, some of my wife's customers were laggards paying their invoices in November, which meant fewer euros being carried over to December. Some of our expenses were also unexpectedly high in November.

We expect visitors from the US for Christmas, which is worth some spending and fun. It's such a pleasure to have anyone visit us over here, and we may do some small scale Europe travel. We will certainly get some kind of Christmas tree.

We also plan to make a donation to our local food bank, whose services we personally witness since they're in our neighborhood. More than food, they provide other nourishment for those who are having bad luck in their lives.

Until next time, count your blessings and help others where you can.

July and August 2022 Updates: Travel, Inflation, Rent

In most of July and early August, I was taking advantage of my summer vacation to travel through Europe and the United States. Meanwhile, Europe's bad news kept piling up.

With power prices rising and the rivers drying up and a war and the currency falling in value, it's a worrying moment here. To put it mildly. I've been captivated by the potential for major disruptions to our lives and for the lives of millions of Europeans whose livelihoods rely on industries, which themselves rely on inputs such as natural gas and electricity, both of which have exploded in price.

What does Germany do if its major industries shut down? I don't know.

That said, even while vacationing within Europe, it all felt far away. Shops were open and happy to sell over-priced chocolates or locally made clothing. The wine and cheese in France were still excellent. Paris is still beautiful. The museums remain treasures. People were generally pleasant and happy to see us. My family who visited France loved it and some said they wanted to move there.

To be fair, when I visited the US, all of its problems felt far away too. American food is great. Everyone is nice in a way that feels increasingly foreign and yet increasingly welcome. I think "Maybe I should move back!" after I've touristed in the US, but when I speak to my younger family members about their jobs, the prospect seems less appealing.

All of them are in the rat race. All of them are working their butts off. All of them don't get enough vacation time. I didn't ask about health care, but I know what that's like. All of them are likely earning more than I do, but the price for that is enormous uncertainty and very little freedom with their time. Whenever I spoke about my job, I couldn't help but feel like I was bragging, even though I'm somewhat unhappy with my career and am considering other prospects.

But as soon as the words leave my lips, "Six weeks summer vacation.... yes, it's paid," I know I have something valuable that my working-age American family doesn't have. It's a tricky social minefield, and it's an inevitable topic of conversation because I just have so much free time in the summer. Meanwhile, my American loved ones balance seeing me with their work schedules.

We'll see though. If Germany can't manage its current troubles, it's possible that the system that supports me and my colleagues falls apart. That's unlikely, but it can't be ruled out.

Net Worth: Inflation and Stocks

Our net worth increased 7.46% in July ($123,947) and fell 2.01% in August ($121,453) in USD. In euros, it rose 9.45% in July (€121,160) and rose .44% in August (€121,697). Liquid net worth at the end of August stood at $89,890 and €90,070.

Image: Chart of our USD net worth over time. Notice the value of euro debt decreasing quickly.

The falling euro is scary. On the one hand, my euro wealth continues to rise because of my overwhelming reliance on dollar assets for my savings. On the other, I have received a large pay cut relative to the US, which I felt acutely whenever I paid for a restaurant bill in the US. Inflation in the US plus a falling euro equals pain for euro jobbers like me.

The upsides are that if there's an emergency over here, my USD cash has become more valuable in euros. Likewise, the value of my European debt has decreased significantly in dollar terms.

Stock Market

The stock market since June has been volatile. The S&P 500 rose in price in July to touch the 200 day moving average and has since fallen. My assumption is that it's in a downtrend, and so my IRA remains in a money market account. Ironically, my lack of action since February in the IRA has been the best trade of my life. The interest I earn in it has gone up over time even as the overall market continues trending downwards.

So far, despite the new downward price action, I don't feel any urge to make major portfolio changes.

My Evolving Rent Thoughts

I have to admit: I've been triggered by the rent increase we got in June. Until then, I'd never had a landlord increase their rent on me. And for him to do it then, just as all our economic realities were getting more precarious, felt especially grating.

I admit that this is irrational. He's also an investor, and investors want rising cash flows from their investments. I get it. But I don't like being a landlord's cash flow¹, and so we've been looking at buying properties again. I still hate the upfront cost of buying something here, but man, I hate having my rent raised. So I'll keep looking.

For a few weeks there, I felt like I was in a rush to buy something. But that has subsided. I've calmed down. I'm still worried about a potential rent increase next year too, but I see that our requirements for a property are specific enough that I can't and shouldn't just buy any old thing.

Other Notes: Computer, Refund, €9 ticket

In July, we bought a new computer for my wife. Her's starting crashing, and since she relies on a stable computer for her work, we bought a new MacBook Air for her. We were going to pay for this from occupational cash flow, but amazingly we finally got the second federal stimulus payment in the form of our 2020 tax return refund. Plus interest! That more or less covered the cost, and it came at a perfect time.

That said, we're going to be financially tight for awhile here. She's making a major change in her business, and the short term effects are likely to be reduced cash flow in the short term with increased cash flow later since she'll be in greater control of her time and pricing. She's being bold, and I'm happy for her.

Finally, we will both miss Germany's €9 ticket, which allowed us both to travel throughout Germany for €18 total per month in June, July, and August. It's back to the old complicated expensive system here, and we'll mourn grievously.

That's all I have for this time around. Take care of yourselves and your families. Until next time.

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1. Especially for this landlord. I like our apartment and its location, but his management of this building leaves a lot to be desired, and we're currently fighting with him about our Nebenkosten. ↩︎

Update: January 2021

This one is very late. There was a lot of real life that happened in the first week and a half of February that threw off my normal schedules. With that out of the way...

Our net worth shrank in January by 3.02% in USD and 1.72% in EUR to $121,177 and €107,809 respectively.

The main drivers were the stock market and some personal spending. Anyone who's exposed to the tech sector has experienced a good amount of pain recently. January had a sharp decline and a reversal at the end of the month that eased the pain a little, otherwise our numbers would have been worse.

On the spending side, I'm re-jiggering my cameras (I like photography and, increasingly, video). That means, I'm buying cameras and trying to sell my older cameras. That will impact the January and February numbers.

On the upside, our incomes are improving as normal working life resumes post-pandemic, and we received our German tax refund. Score.

That's it for this month. February so far has also been a rough stock month, so I expect losses. Thankfully that will be mitigated by our incomes somewhat, but it won't be enough, I expect, to totally offset this volatility.

Stay healthy. Until next time.

Update: November 2021

As of November 26, our net worth had appreciated the prior month by 2.86% in USD and 5.4% in EUR to $117,153 and €103,492 respectively.

Our performance in November was aided by strong performance from some of our stocks. We also received several large refunds due to the lowered income in my wife's business resulting from the coronavirus disruptions.

New Date of Record in December

This is the first month where I felt like I should wait until the final day of the month to record the totals. I chose November 26 years ago because it was around when the Deutsche Rentenversicherung made its withdrawal from our German checking account, and it was guaranteed to be before my job paid me. My concept with this timing was wanting to record whatever remains after making all the monthly expenses. Wealth is, after all, that which remains.

The day I recorded our net worth, the market started moving a lot. October 26 through November 25 was a very strong stock market month. From 26 onwards, things started moving downwards, and they moved down a lot. It feels weird to say that we were "up" in November, when the final days of the month were so consequential.

So I'll likely change to recording our net worth on the final day of the month, with my salary subtracted.

Liquid Net Worth

In my spreadsheet, I've also added a "Liquid Net Worth" section. This is basically what I could access if I were to need a bunch of cash. Now, we don't own a home, and I've never included our physical assets in our net worth calculation, so this number isn't drastically different.

I would like to be able to glance at a number that gives me an idea of the number of years we could live off our assets. That means, that retirement accounts and rewards programs don't get counted. Were I to add physical assets and my pensions into the full calculation, they would also be omitted.

At the end of November, this number was $97,131/€85,805. Since we spend about €25,000 a year, it means we could quit our jobs and live about 3.5 years. Were we to cut expenses, we could lengthen that out.

December Outlook

My December Christmas bonus and extra money will be offset by some expenses having to do with some trips, one of which we've already made and another we might make if Omicron doesn't ruin it for us. Obviously, not doing the trip is better for our finances, but, man, we have to live our lives.

Until next time. Stay healthy/Bleib gesund.

June 2021 Update

On June 26, when I took the monthly measurement, our net worth had risen in the prior month by 1.74% in USD and 3.87% in EUR to $102,269 and €85,653 respectively. Year over year, that's a 50.4% and 41.33% rise in USD and EUR respectively.

We've essentially returned to where we were in May with slight changes to the overall relationships between various accounts. As I wrote in earlier updates, we haven't been able to actually save much in the past few months, so the gyrations of our stock portfolios have been entirely of their own volition.

Stock Shenanigans

Now, I enabled this volatility a bit by selling and buying some things, but there wasn't really much of a period where any of the proceeds of those sales sat in cash.

May provided one of those confounding periods that I wish I were better at predicting. After I sold some stocks, I purchased different shares. When the first stocks fell, I felt vindicated. When the newly purchased shares also fell, I felt like a fool. My instinct to sell had been right, but my rush to buy was not, and much of the frustration I felt in the past two months could have been reduced had I sat on my hands a bit longer and allowed volatility to help me out and make me feel like a genius trader.

That said, in the long run, it won't matter. I can barely remember the various agonies I've experienced since buying my first shares. Eventually this small irritation in May and June will fade like those others I've forgotten in the past. It's all the more reason to avoid making large blunders that make these periods unforgettable.

The one thing that might have been such a blunder was my sale of Cloudflare. This is not a stock tip. Following the sale, I experienced serious regret and a nagging sense that I had made a long-term blunder. I even dreamed about it. After analyzing the company to a greater extent than I did when I first bought the shares in 2019 on a whim, I've decided to average back into it. Make of that what you will. My other sales haven't distressed me, so this will be a good gauge of my instincts as the years play out.

Taxes

We had to move some money out of savings and into the hands of the German federal government by paying our estimated taxes. If we're overpaying, we probably won't see that money again until the end of 2021 with the lag times between receiving the necessary paperwork, the tax preparer's time, and the pace of the German Finanzamt.

In America, I found doing taxes to be kind of fun and easy. I studiously learned the rules as best I could and filed on time every year. When I moved abroad, I knew I needed to file a US return as well, which I've always done.

But taxes have become a drag and a source of dread. Almost none of that feeling has come from paying taxes, but instead it's the vast quantities of paperwork and organization we're required to maintain along with the conflicting rules of two countries that drive me to anxiety and occasional despair.

It appears I've missed something in all my US filings, and now we're going through the IRS' Streamlined Procedure because the risks posed by the outlandish penalties are too high to ignore. Namely, I misunderstood the FBAR (IRS Report of Foreign Bank and Financial Accounts) and how some of my arrangements in Germany might, repeat, might have been reportable. No one can say with certainty whether they are or not, but because the potential penalties are so extreme, and because I'm already in the IRS system, I can't ignore them.

So now we're paying a firm to help us, and in the days before I fly to America to re-establish my relationships with my blood relatives, I'm reassembling three years of data to prove to the IRS country that we don't owe taxes and that we weren't trying to hide money from them. Along the way, I'm learning the other small ways in which U.S. expats are screwed by the US' tax system and it's hard not to feel like our country hates us. Charlie Munger exhorts people to never feel sorry for themselves ("I know self-pity is stupid"), and I try to keep that in mind to keep plunging forward in this task, but that sense of injustice and unfairness grates like sand in my shoes.

June Outlook

We will have to pay the aforementioned tax preparer in June, and I will likely have elevated spending while in the US. Otherwise, I'm hoping for not too many surprises. Because I received my summer bonus, I had some extra money to save, which I've done. Should we receive any of the various stimulus checks from the US or the mythical refund for our overpaid 2019 German taxes, we'll have a boost.

Happy Independence Day to any American readers, and I wish you health and happiness. Until next time.