Tuesday, January 24, 2017

Income and Expenses, Savings Rate for Q4 and full year 2016

A year has once again changed, and january is remain only a few days. Time goes really fast and I feel that I don't have time to do anything, what I had planned. In any case, now it is once again time to take a closer look how I managed I in 2016 and how my journey towards financial independence is developing. As I have already several times mentioned in previous articles, I don't reached my goal of 2016 dividend income and it also appears that my expenses have increased during the past year. Since this is the second year when I keep a stricter control of my spending, I  also made a comparison with last year's results. As I mentioned in my first income / expenditure report, I will make a summary on a quarterly basis, because my months in the case of income are very different. This will give me a better view of the overall situation and hopefully will inspire some of my blog readers. 

Here are my numbers for Q4:

All revenues are reported net of taxes.

In the fourth quarter of my salary income were very good, mainly because I did quite a lot of overtime. Unfortunately, the expenditure also increased, and much more than salary income. In addition, November and December contains some "extra" spending in the form of gifts and recreation trips, a total of about one thousand euros.

My goal is to save about half of my wage income and invest those wisely. In the fourth quarter I clearly missed my target,because of high expenses at the end of the year, my saving rate of wage income was only 33.72%. When I take into account also the dividend income, my savings rate rises to 46.87%.

One thing that I will follow with great interest is the dividend income and expenditure ratio, because it is the most important thing on my way towards to the financial independence.

The fourth quarter went bad, but a little bit better as third one. This time dividend income covered about 37% of my expenses. Poor achievement is of course due to higher expenditure and it is something that I need to change.

Let's see what the result was for the whole year:

My expenses were an average of 1771 Euros and my salary was an average 2875 Euros per month. As you can see, during the year I managed to save 38.38% of my wage income, so I clearly missed my goal, which is 50%. Of the total income my savings rate in 2016 was 52.44%.  

Last year, my dividend income covered 47.99 per cent of my expenses. 

Comparison between 2015 and 2016:

2016 my dividend income decreased about by 8.5 per cent, even though I made several acquisitions over the past year. The main reason for the reduction in dividend income are in the 2015 reported dividend cuts, (Summary of Dividend Cuts), as well as smaller extra dividends compared to the 2015 .Wage income compared to last year were a little bit higher, for the simple reason that I did more overtime work. Due to the high increase in spending, + about 23%, my savings to wage income went down 16.4%, it was only 38.38% for the 2016. Of my expenses, dividend income accounted for about 25 percent less than the year before, so the journey towards financial independence seems to be rather more distant than closer. 

Although the year 2016 was a little disappointing, I feel confident about the future. I try to keep my expenses at a reasonable level, to increase my portfolio with good share purchases and in this way to get closer to my goal.

Thanks for stopping by!


  1. Hi! What is the fee for currency exchange with US-stocks (or other foreign countries) when you buy/sell or get dividends, from your Finnish account?

    1. Hi Sensim.

      When I change the currency, the fee is 5 USD or CAD 5 and etc. The account I have different currencies, so the dividends received in dollars, remain dollars, unless I change them myself. Transaction costs are also 5 USD or 5 CAD. I mostly use LYNX Broker (https://www.lynxbroker.com/)