Finance Friday: Data – Part 2

Finance Friday: Data – Part 2

Happy Friday FIRE-ers! As promised, today we’ll be taking a look into the second half of the Data sheet. As mentioned in the previous part: the Data sheet essentially is just a single large sheet that acts as a sort of database for my other sheets! It’s not the prettiest, but it gets its job done, storing a lot of monthly information. The screenshots given will only span a few columns. This is because the entire sheet is more or less just a collection of columns which represent a single month. No need to see any more than a few.

You can download the sheet here if you haven’t already! I’ve made a couple of changes (mostly to formulas) since the last one so consider this an updated version!

Running Totals

We’re kicking this one off right where we left off at RUNNING TOTALS. Here we’re keeping track of running totals for Income, Expenses, and Cash Flow. Additionally, we keep a stat for our Lifetime Worth/Wealth Ratio. This is the ratio of your current Networth to the the total running income earned over your lifetime. This metric can be good for taking a quick check up on how your savings and investing has progressed over time. Ideally you should be looking to be in the 50+% range when shooting for FI. Admittedly, it can take some time to build this if you’ve started later in your working career.

Passive Income Stats

In PASSIVE INCOME STATS, we’ve got some tracking from another sheet which will come up in a future post. This is another one of my favorites as we are keeping track of how our passive income streams are growing over time. Aside from the tracking of the number of months, the top 5 rows are the running totals of our passive income up to that month for a given category. Along with that we get a running total of all categories split into True vs Total. Similarly to other sheets, the True section ignores one or more categories that I wouldn’t consider real passive income. In this case I’m only ignoring the 401k Match as this won’t be a valid metric to use when retiring. Finally, we keep track of a few averages for True Passive Income. 1 Month, 4 Months, and Annual averages. We use these in conjunction with the next section as well which is..

Estimate Future Expenses

Here we’re making some casual estimates about potential expenses in our future. Each category shown is static and is added to the previous category. Kind of like how we did that in the ASSETS section from Part 1. Right now for me, this isn’t extremely useful as my current spending will very likely not be anywhere near what my actual spending will be like. I’m currently still lucky enough to be living with my parents and as such I am able to avoid a lot of expenses. Once I move out, I’ll be able to use the tracking sections to get a more accurate depiction of what all these expenses will really be like. From there I can make adjustments to this as necessary. In the end, the purpose of this is to combine with the PASSIVE INCOME STATS to create a neat chart. This showcases how much of my monthly expenses can be covered purely from my average monthly passive income levels. This is a chart from a different sheet, so you’ll be seeing it in another Finance Friday.

In-Depth Expenses

IN-DEPTH EXPENSES is once again a near perfect copy of the tracking from the Cashflow – Monthly sheet. We’re just keeping it here to have all our data in one place. The additions come a little lower in the section where we begin to track category level spending as well as 12 month averages.

Variables

Finally. The VARIABLES section. This was used a whole bunch in Part 1, but now you finally get to see it. It’s not much, but it’s a consolidation of a lot of our assumptions about expectations for the future. Going a little in depth with the percentages in the bottom half, these are all used in figuring out our different Networth projections. We have things like Market Growth per Year/Month, Inflation expectations, Expected Savings Rates and Expected Raises. Each one changes based on the type of projection we’re looking for. Pessimistic will obviously have much lower market movement and a higher inflation. Optimistic will show an inverse relationship to all of those. Best Guess is probably the best metric which uses standard growth and inflation values. It’s nice to see though, how one might need to plan if things take a turn for the worse or if things go a LOT better than planned!

Current Year Stats

CURRENT YEAR STATS is a consolidation of 12 Month Averages for several expense related items. We also include things like taxes and investments. We use this for some charts down the line as well.

Asset Data Matrix

This one is quite the monster. On the sheet it’s all in one section in a line, but here I’m showing it as two separate sections for better formatting. ASSET DATA MATRIX is a collection of the different investments in my portfolio and the Asset Class distribution they provide. The reason for this is because some funds may reach a bit into other Asset Classes. For the purposes of my calculator from the Investment Portfolio, I want to be as accurate as possible with each investment.

The way it works is that I show the Asset Mix Percentage for each investment in the “Mix” section. From Large Cap to Bonds to Crypto, I give the total percent of what the investment is out of 100%.

In the next 3 Sections I pull from the table in Investment Portfolio and multiply the (*) Actual, Invested, and True Invested values for each investment. I then multiply each one by the percentages in Mix.

For example: Let’s say my Investment 1 is a mix of 20% Mid Cap and 80% Small Cap and it has a Actual Value of $2,000. I will multiply the Actual Value by 20% and 80% and place them in the respective slots. $400 for Mid Cap and $1,600 for Small Cap. I’ll do the same for the other sections based on their total value.

(*) To Reiterate: Actual Value = Market Value, Invested Value = Cost Basis, True Invested = My Contributions. Doesn’t count dividends.

Networth Milestones

Everyone’s path to FI is different and it’s great to see how your path is looking. One of the key things that makes FIRE a reality is leveraging your assets to increase your wealth further. This creates an awesome snowball effect and starting earlier will always help you get there faster. This section is used for you to keep track of different checkpoints in your Networth. Set a milestone level for yourself. I chose $50k increments, you might choose $25k or $100k!. Every time your Networth crosses one of those checkpoints, mark the date here! We’ll use this in another chart down the line.

Networth Projections

Our final section in the Data sheet, NETWORTH PROJECTIONS. Here we’re keeping track of our Best Guess projections each and every year. This is awesome to look at because you get to see how your projections change. As your income/savings rate/expenses change over time, so does your Networth projection! We’ll be putting this into a chart as well which I love to look at.

Closing Thoughts

And that’s it! This wraps up the Data sheet, which as I mentioned really ties together a lot of the different sheets shown. Hopefully you’ll take a couple of things from here that you’d like to use in your financial sheets! Next week we’ll start taking a look at Passive Income tracking. Happy Friday again!

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