Tuesday, 2 April 2013

March 2013 Net Worth: $357,000 (+0.6%)

Value% Change
Net worth$357,000+0.6%

In my February 2013 net worth post I had forecast March 2013 to be the first month in which my net worth actually decreased.  This was due to several factors which negatively affected my net worth which I will discuss below.  However, as can be seen above my net worth actually increased which I am particularly pleased about.  That being said this was my worst performance both in absolute and relative terms since I started tracking my net worth in June 2011.

An outline of the major factors which affected my performance this month are listed below and as you can see most of the points are liability driven.

  • A significant paydown of my credit card debt which used most of my free cash
    • I have often heard people complain about the amount of money they spend on their credit card.   I have not often had this problem however in March 2013 I had to use practically all of my wage to pay back my credit card debt
    • I obviously had to live somehow and even though I was much more careful about my expenditure in March, most of this by necessity had to go on the credit card
    • However my balance at the end of March is less than half what it was at the end of February
  • The inclusion of CGT liabilities in my net worth
    • I have been selling significant parcels of shares in the last few months (especially my employee share plan shares which I have outlined before).  This have been creating a liability which I've been aware of though not tracking 
    • This month I included this liability in my calculation and it will be included going forward 
    • Without the inclusion of this step up my net worth would have increased by 1.1% (not 0.6%)
  • A reasonably significant decrease in my 'cash on hand'
    • I normally keep a reasonable amount of cash in transaction accounts for every day use.  As outlined above the fact that most of my wage went to credit card repayment meant that I had to use most of this for my day to day expenditure
  • My only savings and investment for the month came from my automatic employee share plan investments and automatic superannuation contributions
    • I have said it before but the fact that it gets taken out of my wage before I even have to allocate it is really a great psychological saving tool
  • My share performance was reasonably flat (to slightly down) over the month
    • I was thankful that there wasn't a correction in the market as it would have made my performance look terrible
In my expenditure tracker for March 2013 I will outline in more detail what caused my personal expenditure and credit card debt to blow out so much as well as where all my cash went!  Overall compared with where I was expecting this performance to come out at, I was reasonably happy however I will be looking to significantly improve my savings and investing over the coming months.

For April 2013 I have a significantly lower credit card repayment obligation and so will have much more free cash to save and invest.  Part of the problem I am having now is finding appropriate investments in the share market.  My target for April 2013 is a net worth of $361,000.

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