2023 in Numbers

I keep a lot of spreadsheets to track my income, expenses, savings, investments, wealth, and more. Here is my breakdown of how 2023 went for me on my journey towards financial independence. I will also share some backwards looking charts to show where I've come from.

Summary

I started freelancing in 2021, 2022 was a great year for me, and 2023 was steady. I have a very niche speciality in my field. I am compensated well for my time since there could be many months in between projects which is a huge risk for me.

• Net Profit - Freelancing: $170,500 (after deducting all of my business expenses)
• Taxes: ($35,000)
• Living Expenses: ($76,300)
• Investments in index ETFs: ($24,300)
• Repayment of mortgage principal: ($12,700)
• Cash Retained: ($22,200)

Savings rate: 21%

Reflection
This is a disappointing savings rate to me as I want to be at 50% or higher. In 2022 I wrote that 2023 would shape up better as I moved to Italy and would experience a significant tax savings as a result (down from around 40% effective tax rate down to maybe 15%). While I did save a significant amount in taxes (40% down to 25%) my living costs were higher because I was staying in a very expensive apartment just to get my life off the ground. I also made $45,000 less money in 2023 than in 2022, that's the life of an entrepreneur. I also had some large medical bills from a surgery that was not covered by insurance. In 2024 I should see my expenses drop because I will be moving out of my expensive apartment (€1850 per month) into a cheaper one in a smaller city (aiming for €800 per month or less).

Expenses breakdown

• Housing (rent/mortgage): $21,762
• Condo fees: $973
• Property taxes: $892
• Utilities: $894
• Groceries: $2,549
  • I hate cooking
• Restaurants/Cafes/Alcohol: $7,711
• Household: $2,905 (unexpectedly needed a new washing machine)
• Self-care: $1,180
• Insurance: $3,971
• Internet: $691
• Phone: $776
• Hobbies: $1,885
• Pets: $1,486
• Local Transporation: $556
• Travel (excludes food): $15,417
• Other: $12,930 (unreimbursed medical bills from surgery)

Reflection
My target budget for expenses is $55,000 each year. Life happens, unexpected expenses come up. I'm starting to save money on my eating out but I only began that process around November 2023 so I should see much lower restaurants/cafes in 2024.

​The historical progress charts

They say that the first $100,000 is the hardest and this is absolutely true. It can take you 7-10 years to reach $100,000 and then only 7 more years to reach $1M. 

This first graphic represents my net wealth by asset class through time. You can see that in 2023 things were recovering from a bad 2022 and I'm coming closer to the $1M by the end of the year.

​This second graphic represents the detail of my wealth through accumulation. The lines that are dotted ("Gross Income" and "Taxes") are non-cumulative so that's why they stay relatively flat. The "Cum. Gross Income" is meant to show the vast difference in time between my lifetime earnings and what I've been able to save. "Cum. Employer Matches" and "Cum. Contributions" together show you my basis in my wealth as this is what I've put in through time. So everything above that in the vertical columns is compounding interest and market growth.

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