Thursday, 1 September 2016

August 2016 Net Worth: $800,000 (+1.5%)

When I last updated my net worth I listed the 4 major things I wanted to do during the month with my investment portfolio.  They included:

  1. Get my individual stock holdings down to 10 (from 11)
  2. Progressively transfer stock holdings into my wife's name for tax reasons
  3. Work out what I want to do with my managed funds
  4. Move cash and stock progressively out of my Interactive Brokers account
I managed to get exactly none of this done and actually did very little in August at all on the savings and investment front.  Why did I get so little done?  Frankly work was so busy for me during the month that I spent the whole month just trying to get enough sleep and not burn myself out.

I now have more time so will be working on doing some of that this month.  One thing that I am planning on doing this month (which ticks several of the boxes above) is selling index funds that I hold in my Interactive Brokers account and buying them in my wife's name:
  • Given the shares are held in the name of interactive brokers I don't get the benefit of the franking credits of Australian index funds (costs me 1% p.a.)
  • I have a capital loss on some of these funds so the transaction costs are far lower than would normally the case
  • I get the benefit of having the earnings taxed in my wife's name going forward.
It's a no brainer and I'm just putting things into place so I don't get burned too badly from market moves while I buy and sell in different accounts.

So if I did nothing this month how exactly did I manage to get an increase of $12,000 in my net worth?  There were a couple of bit things which really benefited me including:
  • The vesting of my employee share plan
  • Continued saving into my employee share plan and superannuation plan
  • A positive share market move which helped increase both my share portfolio and superannuation valuations
  • Small increases in my home loan savings account and a pay-down of my credit card bill

August was the first month where I got to a net worth of $800,000!

Monday, 1 August 2016

July 2016 Net Worth: $788,000 (+3.5%)

My net worth is up pretty significantly this month however other than saving a decent amount into our home loan offset account I didn't actually do all that much which is a little disappointing.

I still have plenty to do with respect to my personal finances before I'm in a position where I'm happy to just sit back and let my investments do their thing.  These are just some of the things that I'm looking to do:

  1. Get my individual stock holdings down to 10 individual stocks (currently at 11).  
    • I've been doing quite a lot of work on this and have managed to narrow what I hold
    • This does not mean that I only want to hold 10 securities. I'm willing to hold far more than that in broad based index funds but those are pretty much set and forget type investments that I don't need to think about all that much
    • I want to hold at maximum 10 individual stocks.  Any more than this and I honestly do not have enough time in the day to do them justice and I end up not knowing enough about the stocks I own
  2. Progressively transfer stock holdings into my wife's name
    • I currently hold most of my share investments in my name which is incredibly inefficient from a tax point of view (given that she is in a lower income tax bracket)
    • As I sell shares over time I want to move more and more into her name
  3. Work out what I want to do with my managed funds
    • Several years ago my parents gave me a portfolio of managed funds and they have slowly been growing over time
    • However they are quite high fee and they do tend to create tax issues for me each year so I need to work out what I am doing with these
  4. Move cash and stock progressively out of my interactive brokers account
    • Interactive Brokers is a great platform if you are looking to trade frequently
    • My investing methodology has been changing over time and I am far more a buy and hold forever type of person...interactive brokers isn't great for this especially given the inability to participate in DRPs or receive franking credits
I could keep going however these are just a few of the larger things I need to do to get my portfolio into shape over time.  Some of these I just need to sit down a do a bit of work and others I can only do opportunistically.

However that's enough about the future plan...let's see how I've actually performed this month.

July was a bit of catch up month after a dreadful June...

I've outlined below how I performed in different areas

Tuesday, 12 July 2016

June 2016 Annual Report

This post is one I really enjoy writing every year.  I love looking back on the year and assessing how I did and also looking at what I wanted to achieve.

In some ways the last year has been a little boring on the financial front.  I have been building cash so that my wife and I can look at buying our new home so I haven't been as active with my investments as I was in the first few years of this blog.  However this year I have been doing a lot on the personal front and in cleaning up my share portfolio which had grown incredibly unfocused.

I will look at most of these points in detail below and this post is going to be one of my longer ones so feel free to skip to whatever section interests you most (I've tried to signpost it as well as I can)

Annual Net Worth Performance: +$200,000

Over the year to June 2016 my net worth increased from $561,000 to $761,000 and although this is a spectacularly large increase there are a few reasons why this is a one off which I will discuss below.  However even excluding these one offs my wife and I managed to do really well this year especially given the amount we have been doing in our personal lives including:
  • Getting married
  • Going on two overseas holidays
  • Doing some expensive renovations on our home

Although the net worth performance over the year looks pretty amazing there are a few one offs I should probably call out here:
  1. In 2015 I had adjusted my net worth down to account for the fact that we would have to spend a significant amount on our wedding and honeymoon so these big expenses didn't actually impact our net worth
  2. At our wedding in July last year our guests were incredibly generous (especially our parents) and this boosted our net worth by ~$30,000
  3. We had our home revalued in August last year by the bank and this added another $40,000 to our net worth over the year
However even allowing for this we still managed to do very well over the year.  Before I go into the details of what we did over the year it may be worth looking at how I have done since I started writing this blog over 5 years ago.

The power of continuous saving really does work...

Wednesday, 6 July 2016

June 2016 Net Worth: 761,000 (-1.5%)

I thought I would start this post with a quick thank you to those who still read this blog 5 years after it first started.  I know that I am posting less than I used to and it has gone from being a blog which disseminated some (hopefully) useful financial knowledge to pretty much a pure personal financial blog.

I know I've explained it before but I thought it would be worth recapping why I decided to post less.  Most of us only have a finite amount of time in the day and I had to decide how to spend mine.  Instead of posting on this blog (and indeed on other blogs which I write) I decided to scale that back and spend time actually investing and trying to get ahead financially.  There were plenty of things which I had planned to do financially which, frankly, were never getting done and I was spending hours each week writing blog posts.

I decided that a better use of my time was to focus on my business of investing.  Unfortunately this has meant that I have far less time to post here.

With that being said I do still enjoy tracking my financial progress and it does allow me to take stock once a month of where I am at.  This month I will also do an annual review of how I have performed over the last year (I will upload that post in a few days time).

June 2016 was a tough month...

I don't think I'm the only one that had a tough month this month with markets going into a nose dive on the back of the unexpected Brexit vote.  My share investments tend to be higher risk and have a higher beta and my financial performance suffered significantly as a result.

Here is a summary of where I ended the month...

Now let's see where I took most of my pain this month...

Wednesday, 1 June 2016

May 2016 Net Worth: $773,300 (+2.5%)

I continue to honestly be surprised at how my net worth continues to rise month on month.  My wife and I have been talking about finances a lot this month.  As crazy as it sounds this is the first time in my life I have felt any anxiety about money at all.

Why am I feeling anxiety when I am doing pretty decently for my age (for those of you who don't know I just crossed the big 30 a few months ago)?  Housing is the reason.  My wife and I are saving for a new house and housing in the state I live in is incredibly expensive.  I keep going round and round in my head the different options:

  • Do I sell some investment assets to be able to afford a better home?
  • Do I compromise on where I live to buy something more affordable?
  • Do I buy something more expensive and keep the investment assets but leverage myself more?
  • Do we go for the area we want but perhaps not the house that we want?
  • Can I afford to take extra leverage if I'm the sole bread winner and we have kids?
Obviously in a world with limited resources where I am not a multi-millionaire these are all very real questions and questions that lots of people's just my time to ask and go through these issues.

Why do I raise all of these issues in a post about my net worth?  I haven't been tracking my net worth performance this month all that closely and given the stress I have been feeling with the above questions it was a relief and pleasant surprise to see things continue to go well.

So how did I actually do this month?

My net worth performance breaks down as follows (note that totals may not add exactly as there are formulas which round everything to the nearest $100)

Let's walk through some of the major movements this month...

Monday, 2 May 2016

April 2016 Net Worth: $754,400 (+2.0%)

I was surprised how well I performed this month.  I actually spent a fair amount of time this month working on our personal finances and sorting out some admin problems we had (including spending about 2 hours speaking to my superannuation fund to make sure that there weren't any admin errors).

This month we focused a lot on trading and not a lot on investing.  I'm hoping to get back into investing more aggressively over the next few months.

Let's have a look at the breakdown in performance this month:

Friday, 1 April 2016

March 2016 Net Worth: $739,900 (+2.7%)

This month was a pretty good month...I managed to get away for a 2 week break overseas and also to do pretty well in terms of my net worth performance.

Instead of a long rambling summary I thought I would get straight into the numbers.  Below I have included a detailed breakdown of my net worth performance.

In line with the new way I disclose my net worth and the extra detail provided I thought I would address each of the major categories in turn.

Direct Share Investments: +$7,800

I didn't invest anything new in the share market this month and the total gain was due to positive share market moves.  Given the real pain I have taken over the last few months this was a welcome relief.  

Most of these gains came from industrial type stocks.  I made quite a large move into resources and oil exposures while the price was falling and given the low oil price these bets haven't paid off for me yet.  I'm currently considering investing more in this space but am a little gun shy at the moment

Other Investment Assets: +$4,500