Since we do all of our accounting at the end of the financial year it only makes sense to see how we did in terms of savings in July.
You can check out last years review here, but to sum up 16/17, we achieved a savings rate of 63%.
So how did we do this year?
Let’s get into the numbers.
Savings Rate For 17/18 Financial Year
Our savings rate for last financial year was… 66%
We earned $141,497 (after tax)
And spent $47,999
Sooooo happy with 66%! At the end of 2017, I posted our financial goals for 2018 and one of those goals was to achieve a savings rate of 65% or above. We ended up coming in last year at 64% 😭 haha, so I’m very pleased for us to reach 66% at the end of this financial year. Hopefully, we can carry it through until the end of the calendar year 🙏.
Breakdown Of Spending
So what did our precious $$$’s go?
And in pie form
There are a few little issues with the tracking categories for this year because Pocketbook had a major revision of their categories and it resulted in a few double ups and what Pocketbook thought something should have been categorized as and my interpretation. For example ‘Car’ was a major category for me using this software, but Pocketbook replaced a lot of my ‘Car’ transactions as the new category ‘Transport’. There’s also ‘Holiday and Travel’ and ‘Holidays’. The overall numbers are correct just some of the categories might not make much sense.
A few interesting things to note about this year’s breakdown compared to last years.
Rent and groceries still dominate the top spots so no changes there.
Interestingly ‘Food and Drinks’ came in at number 3. This category includes alcohol and going out for breakfast and dinners. It’s really no surprise that it’s number 3 for the last 12 months. Since I changed jobs at the start of 2017, we made the move back to our hometown which has resulted in us being a lot more social. We go out for drinks on Friday nights (in Summer) and get to hang out with friends a lot more. This has resulted in a lot more money being spent on social things but I have to admit, it’s been absolutely fantastic and well worth the extra spending.
A positive from the move was that we are now driving on average, less than 400km a week compared to our old commute to work. This has resulted in us being home a lot earlier, generally feeling a lot better because we’re not stuck in our cars so much and $1,523 difference in fuel mainly from our shorter work commute.
Amazingly we spent nearly the exact amount on groceries which is very interesting.
The lack of weddings certainly helped our savings rate. But interestingly enough, we have booked a lot more holidays than the previous financial year. I have a feeling that’s because we went to so many weddings in 16/17, it scratched that holiday ich that usually starts pestering in the colder months.
We spent nearly $2k less on presents which makes sense due to the lack of weddings.
And all the other stuff is pretty much on par.
What About You?
It’s so important to track your spendings. It’s always my number tip for people to reach FIRE quicker. I’m stoked with a savings rate of 66%! But it can always be better.
How do you stack up? Maybe 66% is easy street for you or near impossible for others. Remeber, it’s not so much about killing yourself to achieve a higher savings rate, rather acknowledging where your dollars go each month and being at peace with that or changing it up if you’re not happy with the current status quo. But you’ll never know unless your start tracking 📈
So what’s your savings rate?
It’s that time of the year again.
Time to review where every single one of the precious dollars we earned last financial year went.
This is usually an eye opener, but we review our spendings monthly so it shouldn’t be too much of a shock.
It will be interesting though because this is the first full year Mrs. Firebug and I have spent together with our finances joined.
I posted my savings rate last FY in this POST. I’m under no illusions that a savings rate of 74% will not be repeated again this year. I have hope that we will be around the 60s though. We did spend a lot of money when we moved with new furniture and what not.
Enough rambling, let’s get into it!
Savings Rate For 16/17 Financial Year
Our savings rate for last financial year was… 63%
We earned $137,419 (after tax)
And spent $50,595
Pretty pleased with 63% tbh.
Anything above 60% was winning for us.
Being in a relationship is all about sacrifices. The last year by my standards was extremely luxurious with a heap of unscary spending. But Mrs. FB felt we were very frugal and tight. At the end of the day, it’s a sensible a sustainable budget that’s going to work and both parties need to be happy with it.
I felt we struck that balance this year gone. And as all the fellas out there know…
“Happy wife, happy life”
Even though I’m not married… These are words to live by ??
Breakdown Of Spending
Down to the nitty gritty.
How in the hell did we spend over $50K!?
and in pie form
Let’s start with our biggest expense…RENT!
$161 bucks a week is great. But that included 2 months house sitting my parents home before we moved into our new place. So it’s really about $195 bucks a week which sounds about right.
I’m sure some Metropolitan readers out there are shocked at how low that rent is, but that’s just one example of the cost of living differences between the city and the county.
Groceries is next up. Man, we eat a lot! But let’s break it down to how much we spend a day to fuel our bodies.
$7,451 on groceries + $1,918 on food + $2,176 on entertainment>food
Those three different categories account for everything we consume (except booze)
= $11,545 a year on food
=$222 a week
=$31 a day
=$16 a day per person
It’s actually more like $21 per day for me and $10 per day for Mrs.Firebug because I eat so much more than her.
I have to be honest. I’m actually shocked that we only spend $16 a day on food each. Considering that this figure includes every time we go out for dinner for like $70-80 bucks, breakfast Sundays, birthday dinners …everything. I eat 6-7 meals a day too. We could definitely improve this category by not going out so much but we live a great lifestyle and there’s always fat to be trimmed if we need to I guess.
It helps that we both make our lunches every day and hardly ever go out during the week.
The car expense is pretty standard. With the change of job this year, the fuel costs should go down though.
And then comes 3rd place…WEDDINGS!
That’s right, we spent $3,774 attending, participating, flying to and from weddings in 2016/17. CRAZY!
The only other two things that jump out at me are how much we spent on presents and utilities.
I know it’s hard because every household is different but is $150 a month a decent usage amount for gas/electricity? I’d be interested to know how much everyone else spends on utilities.
How Do You Compare?
We managed a 63% savings rate last FY. This included rent, food, car costs, holidays, a bunch of weddings…absolutely everything!
And it didn’t feel like we sacrificed at all! In fact, I still think we could cut out heaps of unnecessary spendings if we really needed to. But as mentioned earlier. Reaching FIRE with a partner is about sacrifice and compromise. And I felt like we struck a nice balance last FY.
But I will use this year’s numbers to set the target for next year.
70% here we come!
Lets talk savings rate for a second. It is in my opinion THE most important factor to FI (financial independence) and determines a lot of things like:
- Whether you actually reach FI
- How long it will take you to reach FI
- Gives you a clear indication as to what your FI number is
It’s really the foundation for the concept of financial independence retire early (FIRE) which is what this entire blog is about.
There are only three things you need to do in order to become extremely wealthy:
- Spend less than you earn
- Invest the rest
The very first step in becoming rich enough to retire early is to save your money. The second step is what gets most of the limelight and chatter.
But don’t get it twisted. You won’t EVER invest your way to FI if you don’t spend less than what you earn, because that’s… you know…impossible.
And finally the third step is the time you have to let compounding interest dominate for you.
There could be an argument made for the amount of time you have as the most important factor but it’s kinda out of your control as in you 1. don’t know how much time you have (could die tomorrow) and 2. Can’t change it even if you knew you had X amount of years left. You have a lot more control over whether you spend less than you earn.
Savings Rate For Last Financial Year
Let me cut to the chase.
My savings rate for last financial year was…
Last financial year I made $72,105.04 (after tax) and spent $18,468.42.
One of my top ten tips (LINK TO TIPS) I suggest to people trying to save money is always, always track your spending.
As the old saying goes ‘A goal without a plan is just a wish’.
You cannot set a plan of attack without knowing exactly how much you spend. You know roughly what your income is going to be, you then need to plan for the amount you want to spend each year to achieve your goal of whatever spending rate you choose.
Breakdown Of Spending
There are two ways you can track your spending:
- The hardcore way = manually inputting ever transaction into an Excel spreadsheet
- The easy way = Using an online service that feeds into you bank account (something like pocketbook)
I use the easy way but there is absolutely no problems using the hardcore method.
Let’s have a look at where my cash went last year
Below is the same data but represented in a pie chart.
One of my favorite features of Pocketbook is its ability to create sub categories. My biggest expense is my car for example. I spent a total of $3,385.61 dollars on it last FY. But that’s a little vague isn’t it. Luckily I recorded sub categories for it and can dig deeper into the overall ‘car’ category to see it.
Pretty cool huh.
The software lets you see where the costs came from and even what months you spent the most amount on. The above are screenshots only, but this graph is actually interactive which is pretty cool because you can un-select multiple sub categories from above and the pie will change and you will see the spending per month change on the fly. This sort of stuff really excites my inner finance geek (what a sad existence I live lol)
Before You Ask
There are a lot of things missing or not quite right with my above spending, so before anyone points it out let me set the record straight!
- I only moved out of home at the start of this year hence why my rent is quiet low and overall expenses
- Everything above is only my income and expenses. I do however pay for me and my partner some times (like for dinners and what not) but she also pays for things too so it’s hard to keep track of that. We have not yet joined finances
- My rent ($110 a week) covered gas, electricity , internet, and water. This was a room share deal in the county (cheap as chips)
- I don’t pay a phone bill…sorta. I pay the minimum which is around $20 bucks I think, every six months so I can keep my number from Telstra, this small expense falls under utilities. This means a don’t have credit and can’t call people when I’m out and about. It usually blows people minds when I tell them I don’t pay for credit and am not on a plan. But with the availability of open wifi’s increasing, it is my opinion that we will see less and less people buy cellular data/credit unless they’re in a remote area. Nearly all calls and messaging will be done through the internet in the future
- I have not included the costs (or incomes) of my investments
- I have not included my accounting fees because they are a deductible expenses associated with my investments. In the end I plan to transition completely to index funds and will be doing the accounting myself. Anything investment wise I keep off because I would then need to include the income generated by those investments to be fair and that would get tricky
- Costs associated with this blog are not included
- Going out to eat as an activity fall under ‘Entertainment’, food is where we had to eat somewhere but not as an activity (like at a petrol station) and groceries are anything bought at the supermarket
- I group ‘Holidays’ as one big expense and than create sub categories for each holiday. Anything that is spent on the holiday falls under that sub category holiday. If we buy groceries during a holiday, it will be categorizes as the holiday and not as groceries. Gives me a better indication about how much the holiday costs me
- ‘Presents’ covers gift to myself and others (Christmas, Fathers day, Valentines day etc.)
- ‘Personal’ covers health related things like physio, dentist, ambulance insurance etc.
- And no I don’t have any kids. The one expense for ‘Kids’ is because I recently became an Uncle
How Do You Compare?
I like to compare the savings rate to the nutrition for a professional bodybuilder. Some people say that Bodybuilding is 80% nutrition and only 20% the other stuff (training and sleep). You can’t out exercise a bad diet. Period.
You can train the house down 6 hours a day 7 days a week, but if you’re not fueling your body with the right amounts nutrients it needs to function and repair itself then you’re not going to see results.
This is the same for those striving for FIRE. A healthy savings rate enables you to invest capital. The better the savings rate, the better the results are going to be.
It’s a rookie mistake among first time gym goers. They concentrate so hard on their routine and make sure they put a solid 2 hours in, only to swing by McDonald’s on the way home from the gym thinking they have improved their health.
You would have been better off simply eating a healthy meal and NOT going to the gym!
Optimism your savings rate first, and then concentrate on the investing part.
A dollar saved is a dollar earned. Where as a dollar made isn’t really a dollar, it’s more like 0.70c because of tax. Think about that for a moment.
I would love to know what your savings rate looks like. Have you optimized your expenses so much that my measly 74% savings rate pales in comparison? Maybe this was an eye opener and now you have something to aim for?
Thoughts, feelings and emotions in the comment section below.
It’s a decision most homeowners know all too well. Fixed or variable Rate? Do I fix my interest rate? Or do I go variable? Will the rate go up and I’ll feel like a champ if I fixed? Or will it continue to drop and I’ll just not tell anyone how much more I’m paying every month?
To Fix, Or Not To Fix?
There are some pros and cons for both. The main arguments made for fixing often include:
– Stability with repayments
– Laughing at others when rates rise
While the downsides usually are:
– Can’t make extra repayments
– Have to pay fees to set it up
– No offset
– No redraw
– Big, expensive, want to make you burn down the bank break fees if you ever decide you need out
– Crying internally if rates drop
Variable is basically the opposite of above where you have a lot more freedom and flexibility with your loan. You do pay for this extra freedom however by exposing yourself to more risk.
What’s interesting is that at the moment of writing this article you can find plenty of fixed rates that are lower than variable. I had a quick look at some historic fixed or variable rate data and it seems that this is not so uncommon.
I was under the impression that fixing your rate usually meant that you pay a higher rate but upon further research, this wasn’t the case.
So if a fixed rate is lower than your variable AND provides the security of a fixed rate, there’s no reason I shouldn’t fix right?
Yes and no.
Make no mistake about it. The banks are ALWAYS aiming to make the MOST profit at ALL times. If you think you will pay less by fixing your loan for 1, 3 or 5 years after you have factored in all the extra fees and potential rate movements then, by all means, go for it. But just remember that the banks have an army of analysts that are betting against you. Just look at the above graph and try to find a couple of years where fixing your loan will come out ahead.
And remember that you have to factor in the fees associated with setting up the fixed loan and keeping it.
Here are the CBA’s fees for fixed loans. Scroll all the way to the bottom to see the fees. They include:
- $600 upfront establishment fee
- $8 monthly loan service fee
- $750 Rate Lock fee. Applies to each Rate Lock. Only available on 1-5 year periods
That’s $1,446 in fees straight off the bat. How much of an interest rate hike would be needed for you to recover those losses and come out ahead vs variable? It depends on your loan and rate but there needs to be a BIG rate hike. And that’s just for one year. If you decided to fix for 5 years, the fees are spread out that’s true. But again, take a look above and try to pick any date where a 5 year fixed rate would still be lower than variable during its whole lifetime and by how much?
Are you starting to see how hard it is for this to actually pay off? There have been certain periods of time where fixing has been better no doubt about it. But how good and confident are you that you can get the timing right? The banks have an army of people working full time on this stuff and STILL get it wrong.
I truly believe that you’re gambling if you’re trying to fix your rate to save money. And the ones that win 90% of the time are the banks.
If you’re fixing for stability or peace of mind then that’s different. But don’t think for a minute that the odds are in your favor by fixing. If you do actually come out ahead it will almost certainly be because of luck and not your amazing analytic skills that you predicted that the banks didn’t.
I’m not a fan of split loans because it’s sort of like taking the worst bits from each loan type and combining them into a shit sandwich.
Let me explain
Some of the main benefits from variable are:
– Loan flexibility
– Being able to refinance if needed
– Benefit from rate drops
– Offset and redraw
– Can pay off the loan at any rate you want
You get half of the offset, rate drop and redraw (assuming you split 50/50) which is Ok but none of the other benefits.
You still can’t refinance the entire loan, you still can’t pay off the entire loan.
Your flexibility is about as good as a pair of chalk hamstrings
You’re taking on all the risks associated with variable but not benefiting from all the advantages.
The main benefits of a fixed loan are:
– Stability with loan repayments
– Protection against rate rises
You lose both of those things with a split loan. Yes, you’re only going to have increased repayments from half the loan if rates do rise but then what was the purpose of fixing half the loan if your paying establishment fees for the fixed loan which will probably be more than the interest repayments from the rate rise???
And you’re stability is gone too because you still have the potential to pay more from the other half of the loan if you split.
But you still have to pay the setup fees plus you’re locked into the loan.
You’re getting nowhere near the benefit of either strategy but all the negatives from both. If you want stability and certainty then go with fixed. If you can handle rate rises, go with variable.
Maybe I’m wrong with my analysis of ‘fixed or variable rate’ and maybe I’m about to be blasted in the comment section about all the people who have ‘beat the banks’ by fixing their loan at a certain time. I’m a variable man, the flexibility, and freedom of a variable based loan is something that appeals to me. I think that fixed loans were invented by the banks to prey on the Ned Flanders of the world (the over cautious) and take more money from them by giving them peace of mind. That being said, if a rate rise means that you’re going to default on your loan, then you should definitely fix because you’re most likely overextending yourself financially. For the rest of us, riding up and down the variable roller coaster is financially better, for the majority of the time
SHOUT-OUT: This post was inspired by reddit user ‘CallMeSobriquet’ who wrote a great piece on /r/fiaustralia
If you have a home loan in Australia at the moment, odds are your interest rate is sitting anywhere between 4-6%.
As I’ve already mentioned before in how much does it really cost to buy a house, interest repayments for a loan over 25+ years can sometimes cost more than the actual house.
Ain’t that some shit?
There are a few ways you can lower the costs of interest repayments:
- Refinance to another bank at the lower interest rate
- Pay off the loan quicker
- Dump money into an offset account
What’s an offset account? Basically an account that reduces the principal that the banks calculate the interest repayments on.
Say you have a loan for $100K and the interest rate was 7%
You would have to pay $7K in interest every year.
If you had the same loan and interest rate but also had an offset account with $20K sitting in it, the banks would calculate your interest repayments in the following way:
Loan amount ($100K) minus offset ($20K) * 7% = $5,600
You essentially saved $1,400 bucks of interest repayments by just having your spare cash ($20K) sitting in the offset account.
Enter Credit Card Tarting/Stoozing
Some credit cards in Australia have the ability to transfer the balance (usually up to 80% of the credit limit) to another banking institution without a fee.
This is relatively unique to Australia and whilst I have read some other country being able to do it, it seems like most banks overseas won’t allow you to.
Credit card tarting/credit card stoozing is where you basically use a credit limit that has a 0% interest free period and dump that amount into your offset account to lower your interest repayments on your home loan.
Here’s a break down on how it works:
- Open a low or zero fee credit card with a financial institution different to the main bank where you hold your home mortgage loan and mortgage offset account. You also need an existing credit card with your main bank.
- When applying, ask for the largest credit limit they’ll give you.
- Immediately balance transfer the maximum amount to your CC in your main bank, and then internally transfer this to your mortgage offset account.
- Set up an automatic monthly payment from your mortgage offset account to the new credit card for the minimum repayment amount the card requires (usually 2% of the current balance).
- You’ve now effectively got yourself a fee-free one-year loan at 0% interest, which you are using to offset (tax free) your mortgage!!!
- One month before the interest-free period on the balance transfer expires, transfer the entire amount back from your mortgage offset account to the new credit card, and either (a) close the CC account, or (b) ring the bank and ask them to give you a new 0% balance transfer on the same card.
- Wash, rinse, repeat.
How Much Could This Actually Save You?
Imagine that you and your partner both applied for CC’s with a max credit limit of $50K on each.
Following the strategy you both transfer 80% of the combined balance ($80K) into the offset account that is offsetting your home loan of $400K that currently has an interest rate of 7%.
Without the offset you would be paying $28K in interest every year
With the extra $80K offsetting your loan you would now be paying $22.4K in interest!!!
That’s $5,400 dollars every year in interest repayments saved without paying a cent!
And who said there’s no such thing as a free lunch?
Things To Be Aware Of
- This strategy works best if you have a home loan. You could transfer the money into a high savings account and make money instead of saving it on interest repayments. But the interest rate on a HISA is lower than a home loan and you would have to pay tax on money earn’t so it’s not as effective.
- Need to be earning a high income and have good credit rating. The bigger the limit is on your CC the better. And to get a big limit you usually have to be a high income earner with little debt already.
- This may affect your credit rating! This is a big one. Applying for too many CC’s can negatively affect your credit rating which could affect your ability to get credit in the future such as home loans.
- MUST STAY ON TOP OF THE GAME! If you stuff something up like not reading the fine print on balance transfers or missing your interest only period this strategy can very quickly cost you more than it saves you. You must be on top of everything. Not that hard to do but the banks are aware of credit tarting and the only reason they allow it is because they have statistical data that says that even though this is possible, odds are that the majority of people won’t have the discipline to stick to the plan and will end up paying more in fees than they save.
Have you ever wondered why CC’s offer big sign up bonuses for free even if you cancel the card straight away? What’s the catch right? There is no catch, they just have the data that verifies that the majority of people are not financially savvy enough to stick to their budgets and they will most likely blow out their spending of their CC and incur CC interest fees which is where the banks clean up! They would much rather be charging you 22% (CC rate) interest than 7% (home loan rate) and are willing to give out freebies (CC sign up bonuses) in order to suck you into the trap.
Credit card tarting can be an easy way to ‘beat the system’ and knock thousands off your interest repayments, but to the undisciplined home owner who is not prepared to strictly stick by the plan it can end up costing you more than what it’s worth…
Photo credit: Sean MacEntee via Foter.com / CC BY
It doesn’t matter if you’re 16 or 60. You are never too young or old to start planning for retirement, and if you’re crazy like me then you would have wished you had started planning from your early teen years. But how do you know when you can transition to retirement? To answer the common question of ” How much do I need to retire ” there are basically two things that you need to measure before we can use the retirement calculator.
How much do you spend?
And I don’t want to hear rough estimates here. In order to accurately measure and plan for retirement you gotta know exactly how much money you spend each year in order to live at your current life style. This does two things. Firstly it will give you a quantifiable number (needed for the retirement calculator). You can now accurately say that I need $X.00 amount of dollars to live my life as it is right now during this time in history. Notice I mention this time in history because inflation matters, for example someone living in 1970 might have been able to live off $5,000 that year. But they might struggle to buy just coffee for a year with that sort of cash now days.
Secondly you will become aware of where every dollar that you earn goes. And this is going to really open up your eyes trust me on that! Even for someone who has been financially responsible their whole life. When you track your spending religiously you see just how many holes you have in your pocket and that money is constantly flowing in the outwards direction for heaps of shit that doesn’t really improve your life, I’m looking at you alcohol/smokes/designer clothes. Plugging these holes is another post altogether so lets just stick with tracking money for now.
So how does one exactly track their spending accurately? Well there are a few different methods depending on how trust worthy you are. The first is to simply keep an excel spread sheet/journal and fill it out as you go. Export your bank statements to a CSV file and add each transaction on your statements to your spreadsheet with a date, transaction detail, amount in $ and a category column so you can break down what you spent your money on. Something like this will work
|| $ 54.36
|| $ 26.10
||Revolvers PTY LTD
|| $ 281.52
|| $ 24.20
|| $ 35.10
|| $ 421.28
And with a bit of excel magic you can create a pie graph of your 3 day bender.
The other alternative (my preferred method) is to get browser based software to do this for you for free. There are a number of different Australian options you can choose from: Pocket Book, ANZ Money Manager and for any US readers I’m sure you have already heard of Mint. They all do basically the same thing when it comes to categorizing your transactions. You can log into your online banking and export data between two different dates and then upload it into the software. Once there the software will automatically try to categorize transactions based on common names in the transaction details. For example if the transaction detail has Woolworths in the description than odds are that this transaction should be categorized as groceries. You can always manually go through them to make sure that they are right, and the software is smart enough to remember your changes in case it gets it wrong first time. The only down side to this is that you have to export your data and upload it every time you want up to date info. To make this easier you can add you banking details to the software that enables it to have read only access to your data. This means that the software is always up to date with your transactions without you having to export/import all the time. If you are worries about security you can read up how it works here.
Once you have all your transactions in the software and categorised correctly you can really start to paint a picture on how much you spend and what you spend it on. Pocketbook has a great feature called ‘Analyse’ that creates a pie chart for you between two dates and splices it up based on categories. You can then deselect certain categorie and the pie chart will automatically re-size and show you what your spending would look like without that category for that week/month or whatever the time frame is that you’re measuring. It’s a really easy and quick way to sift through all the junk and find out how much you can actually live off without all the bells and whistles.
Now the last part to this question is all about that cash flow baby! How much does your investments make you? This can be a bit tricky because it depends on what you invest in and how volatile it is. Lets just assume that you are getting a solid return of 9% per annum forever with no fluctuations. Highly unlikely but for the purposes of this example lets just go with it. How much will you have to have invested before your portfolio generates your annual expenditure? Just plug in your figures to the following formula
E / R = FI
E = Yearly expenditure
R = Return rate as a percentage
FI = Financial Independence
Example: I spend $45,730.87 dollars and my rate of return from investments are 9%
$45,730.87 / 0.09 = $508,120.77
So based on the above I would need a portfolio valued at $508.120.77 that returns 9% per year and I would never have to work again!… Not quite. Inflation is the silent killer here. The Reserve Bank of Australia’s (RBA) inflation target is 2-3 percent, lets just use 2.5% for our calculations. We need to minus this percentage from our return rate of 9% and redo the formula.
$45,730.87 / 0.065 = $703,551.84
God dam inflation. Factoring inflation in has just increased our hypothetical FI number by nearly $200K 😐 … This is an evil necessarily though because it will enable your portfolio to grow along with inflation, enabling you to have the same purchasing power in 30 years time as you do today.
I have not covered everything* here but it should give you a basic idea of how to start calculating your FI number. Have a play with the retirement calculator below and see how drastic some simple changes can be such as lowering your living costs by as little as 5K or how much an impact your FI is affected by rate of return.
*All calculations have not factored in tax because it’s just too hard to cover all aspects. You should be calculating using after tax money