Niterainbow: My Journey to Financial Independence

October 2026 update ($1,503,599 -$27,555 or -1.8%)

2026-11-01T04:26:30.560-08:00

↑ Global Small Cap is up by $783 or +0.3%
↑ Additional investment savings $2,500
↑ GBP to USD is up by 0.8% or for my portfolio $1,738
Total gains: $ 5,021

↓ Emerging Markets Stock Index Fund is down by $14,919 or -6.3%
↓ Eurozone Stock Index Fund is down by $3,924 or -1.6 %
↓ Standard and Poor’s 500 Index Fund is down by $5,296 or -0.9%
↓ Growth fund is down by $3,466 or -2.9%
↓ CG Aegon High Yield Bond is down by $382 or -1.2%
↓ Schroder High Yield Opportunities Bond is down by $187 or -0.6%
↓ VanEck Global Fallen Angels High Yield Bond is down by $34 or -0.1%
↓ Vaneck Ucits Etfs Us Fallen Angel High Yield Bond is down by $344 or -1.3%
↓ EUR to USD is down by 0.9% or for my portfolio $4,129
Total losses: $32,680

Family Budget 2008-2026: 18 Years of Real Household Spending

2026-10-26T12:11:01.564-07:00

I have been openly sharing my family finances, and I now have 18 years of family budget data. It is hard to believe that I once thought the most financially difficult time would be when the kids were at nursery (day care). Over the longer term, education drives spending growth: it rose from 5% of our spending in 2011-2012 to 45% in 2025-2026.

Key takeaways:
-Total family spending in 2025-2026 was about $183K, down from about $196K in 2024-2025.
-Education grew from 5% of spending in 2011-2012 to 45% in 2025-2026. Including the kids’ food and clothes, the “Kids” category makes up 52.7% of last year’s spending.
-The house is now paid off, so the mortgage line drops to zero. We expect spending to fall by about $33K, partly offset -by inflation and more car and home maintenance, leaving it at roughly $160K.
- From 2031 onwards we expect spending to fall to about $60K a year in today’s money.

Raging inflation makes older data historically interesting but less relevant. According to official statistics (the US Consumer Price Index, CPI-U), cumulative US inflation over the last 15 years is about 50%. Alternative estimates that apply pre-1990 calculation methods put it above 200%. Critics argue that the government’s magicians have countless tricks up their sleeves:
- Substitution bias. The official CPI assumes that if the price of steak spikes, you will switch to buying cheaper ground beef. The index lowers the weight of the steak, which suppresses the reported inflation rate.
- Fictional adjustments. Government tracking filters price hikes by "quality improvements." For example, if a new computer costs $200 more than last year's model but has a faster processor, the official calculation treats it as a price decrease because you are getting more data power per dollar. This doesn't help you at the checkout counter, where you still must spend an extra $200 out of pocket.
- Owner’s Equivalent Rent (OER): Rather than tracking the direct, actual skyrocketing costs of real estate prices, property taxes, and mortgage rates, the official CPI uses a survey-based metric called "Owner's Equivalent Rent"—essentially asking homeowners what they think their house would rent for. Alternative tracking argues this completely distorts the true reality of the housing sector.

Here is our spending per category as a percentage of total spending. All figures in this post are nominal (not adjusted for inflation):

Year / category	Mortgage or rent	Bills	Car	Adults	Kids	Miscellaneous	Home	Alcohol	Joy
2011-2026	21.6	10.2	3.5	11.5	30.4	3.5	7.6	0.7	10.7
2025-2026	14.2	8.2	1.6	8.4	52.7	2.9	2.8	0.1	9.1

How the categories are grouped: Bills = home bills, mobile, medical and drugs. Adults = food and clothes. Kids = children’s food, clothes and education.

September 2026 update ($1,531,154 +$43,390 or +2.8%)

2026-10-05T11:27:00.000-07:00

↑ Emerging Markets Stock Index Fund is up by $4,203 or +1.8%
↑ Growth fund is up by $676 or +0.6%
↑ Additional investment savings $2,500
↑ Partial severance package investment $69,000
Total gains: $ 76,379

↓ Eurozone Stock Index Fund is down by $4,973 or -1.9 %
↓ Standard and Poor’s 500 Index Fund is down by $2,226 or -0.4%
↓ Global Small Cap is is down by $9,758 or -%4.2
↓ CG Aegon High Yield Bond is down by $654 or -1.9%
↓ Schroder High Yield Opportunities Bond is down by $561 or -1.7%
↓ VanEck Global Fallen Angels High Yield Bond is down by $483 or -1.8%
↓ Vaneck Ucits Etfs Us Fallen Angel High Yield Bond is down by $303 or -1.1%
↓ EUR to USD is down by 2.6% or for my portfolio $12,886
↓ GBP to USD is down by 1.5% or for my portfolio $1,761
Total losses: $33,604

Portfolio Balancing: High-Yield Bonds, Cash and Inflation

2026-09-30T12:13:00.000-07:00

With financial independence now roughly 15 years away, I have started shifting my portfolio towards a 60/40 allocation: 60% in equity index funds and 40% in bond index funds.

Cash vs high-yield bond funds. There is currently an interesting alternative to bond funds in the UK: fixed-term savings accounts with guaranteed interest rates approaching 5%. There are products sometimes referred to as “treasury deposits”, with no account charges or management fees.

I therefore decided to compare four bond funds in which I have invested with fixed-term savings accounts. One important consideration is that both investments can be hedged into different currencies.

I selected following bond index funds: