Monday, 3 September 2012

August 2012 Net Worth - $255,000 (+2%)

Value % Change
Assets $609,000 +0.7%
Liabilities $354,000 0.1%
Net worth $255,000 +2%

While the absolute performance of August 2012 was not bad, it was very disappointing because until about the 25th of August, the share market returns were so good that the result was significantly better than what actually turned out to be the case.  In fact it was the first month since the onset of the GFC that my share portfolio was in significantly positive territory.

Even with the pull back in the share market over the last few days of the month I still had a relatively good month.  This is even though I had several large expenses fall due during the month including:
  • My investment property insurance bill for the year (I posted about the large increases I faced)
  • My car registration was due
  • Several utilities bills associated with my investment property
For those who have been reading my net worth updates from previous months they know that certain things tend to move my result pretty consistently from month to month.  These include
  • My personal expenditure: This month was a lot better than expected which surprised me to be honest - it was not nearly as high as I would have expected. 
    • My credit card debt increased marginally (but not to the levels seen earlier in the year when I never thought I would get it down to my target level)
  • Continued contribution to my employee shareholder plan is a forced investment in the share market from month to month and this supports the absolute level of my net worth increases
    • In August the first round of my employee share plan contributions vested and I got a nice gain from this (~25%)
    • In a previous post I mentioned that I would be selling this straight away.  The high currency though has tempted me to stay in it a little bit longer so I have not sold yet but am still showing the gain in my share account.
  • My home loan offset account actually decreased significantly at the end of the month.  A great investment opportunity came up (I will post about it soon) and I am allocating almost all my free cash to it.  It may turn out not to work out but the downside is limited and there is a great upside to it. 
    • Most of my liquid cash is in my home loan offset account so this decreased significantly over the month. 
If you have a look at the chart below you can see the relative shifts in my investment profile over the month (note that this excludes my superannuation investments and that the property contribution is on a net basis).  The major shift as mentioned above was in the allocation away from my home loan offset account (treated as a fixed interest security) into my share account.

In my July 2012 net worth post I was hoping for a $5,000 increase in my net worth.  I actually ended up getting a $4,000 increase and would have been well above the $5,000 if the share market had not ended the month so badly.

In September 2012, if all goes to plan it should be a pretty good month for several reasons including:
  • The investment opportunity I mentioned above should see a gain almost immediately during the month (although I will not be able to realise this for a few months - i.e. I am locked in for a period of time)
  • I should get around to doing my taxes in September which should result in a nice cash return
  • I have no major expenditure committments forecast for the month (although as I have seen before a lot of the big expenses tend to come out of the blue)

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