I started freelancing in 2021, and 2022 was a great year for me. Who knows what 2023 holds. 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.
This is a disappointing savings rate to me as I want to be at 50% or higher. However 2023 will shape up better as I have moved to Italy and will experience a significant tax savings as a result (down from around 40% effective tax rate down to maybe 15%). Yet, I am still grateful for my high income and grateful that the actual dollars I was able to invest is the highest of any year so far.
I moved to Italy in 2022 so there were some extraneous expenses like buying double health care policies (long story) and buying some household items for the new place.
My target budget for expenses is $55,000 each year. I'm disappointed that my expenses skyrocketed however I knew this would happen with my move to Italy. I am also paying for an incredibly expensive apartment right now in Italy until my residence permit is finalized and then I can move to a smaller village and cut my housing in half.
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 2022 I made some big changes including selling my rental house and suffering through a bear market. The drop off in my net wealth is both a factor of the bear market but also that I had to pay capital gains tax on the disposal of the house.
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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Unfinished human, currently v.5.0. Expecting at least 10 more versions. Aspiring adult.