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I’d been setting aside an “opportunity fund” ever since I started working at IBM. Last February, I embarked on the experiment for which that opportunity fund was earmarked: a 5-year adventure in learning how to build businesses, create value, and have fun. What can you do if you have a good foundation? What can you do with a long runway?
Periodically checking the status of this runway helps me make sure I have the space I think I do. I don’t want to have to cut my plans short. I’d rather adjust early and plan ahead. I’m treating business money as separate for now. I haven’t drawn any income from it, because I want to use that money to fund further growth within the business and build up its own opportunity fund.
It’s tough watching my savings account go down without putting anything back into it to top it up. Well, technically, the GIC ladder I set up replenishes my savings account on a regular basis, so I’m actually watching my GIC total go down. This is according to plan, but it’s still hard to think about, especially with major expenses such as travel on the horizon. Here the numbers are reassuring; plan the work, and work the plan.
I check how I’m doing every month. I’ve usually been near my projected monthly expenses, but November was higher because I started going to the krav maga gym that W- frequents as well. Even with the additional monthly expense and with travel budgeted for, I still have about 4.3 years of runway (pretty much right on track). I can dig into my long-term savings if necessary, so I have a bit of buffer.
It’s great to have eight years of financial data. I’ve been tracking my expenses in Ledger since 2005, when I moved to Canada for my master’s degree. I’m happy to see that I’ve been able to slash my net expenses to less than half of what they were the year before. Here’s a sparkline that shows how my expenses have changed over the past eight years: My top expense categories this year were household contributions, miscellaneous cash expenses, pet care, eating out, and gifts. I wonder if I can get friends to shift towards dinner parties instead?
Psychologically, it might be a good idea to draw a small amount from my business in 2013 so that I can top up my savings and make a small investment in index funds. I want to make sure that I do this properly, so I may need to find an accountant who can help me figure out the dividends versus salary question for small amounts. (Probably dividends, based on my research…)
I might also manage the risk as I head into greater uncertainty and more learning. I can take on short writing, drawing, web development, or consulting projects, especially during gaps between conferences and events I’m interested in.
Still, so far so good, and it’s good to have the numbers to back it up!