Thursday, 1 August 2013

July 2013 Net Worth: $385,000 (+4.6%)

Value% Change
Net worth$385,000+4.6%

After a very disappointing month in June 2013, which was the first month where I recorded a negative net worth performance, I rebounded strongly and recorded a very strong increase in my net worth in July 2013.  Not only was this a very strong performance in a relative sense however after looking through all the data, I discovered that, other than months where I had received a bonus this was my best monthly performance ever.

The share market was once again the primary contributor to my performance.  My share portfolio returned more than 10% over them month and even if I hadn't saved a single dollar from other sources my net worth would have still increased by 2.7% (excluding the very strong performance from my superannuation funds).  However this month was also good from a general saving point of view and I managed to save money into my home loan as well as into an emergency fund and forecast expenditure fund that I have set up.

I had targeted a net worth of $373,000 for July and so as you can see I really shot the lights out compared with what I was targeting.  Some of the factors which affected my performance included

Positive factors

  1. As discussed above the share market returns were a strong driver of my results this month
    • Of the ~$16,000 increase in my net worth this month, ~$12,000 of this came from share market related factors (if you include my superannuation performance)
    • There wasn't any one stock that performed particularly well however as I have a rather high beta portfolio, my stock performance was a multiple of the general market performance (note that this also applies on the downside)
    • I now face a dilemma of whether I sell out of some of the very strong stocks that I own, but I am left with the problem of what to do with my dogs and I really don't want to be owning only the non performing stocks
  2. I managed to save into my home loan offset account
    • As flagged last month, my credit card bill for this month was much lower than it has been in previous months which allowed me to save some more money into my home loan offset account
  3. I set up an emergency / future expenditure fund
    • I have mentioned in many previous posts that my ability to save money is constantly affected by my credit card bill and how much spare cash this leaves over
    • The problem with credit cards is that you can spend now without really tracking how much you are spending
    • What I have started doing for big ticket items (especially ones where I get the benefit in the future), I have started putting away the equivalent amount of cash into a high interest account so that I can see that I have a lower cash balance.  I then use this cash to help pay the credit card when it falls due
Negative factors
  1. Unfortunately my credit card bill was higher this month than it was last month
    • This is due to several things, but a lot of it is around entertainment expenses - my girlfriend and I go out quite a lot (much more than with previous girlfriends I have had) and this comes with a cost.  I am obviously hoping this normalises somewhat
    • I have also had some big gift related expenditure - with close family and for weddings you really do just have to suck it up and pay for it
This month's performance highlights what I was saying in last month's net worth post.  My performance in the future is going to be much more volatile due to the nature of share market returns.  I am coming to terms with this although obviously I hope to keep my performance positive each month.  I have a reasonably high credit card bill to pay in the coming month as well as a short overseas holiday so I don't know how much I'll be able to save this month.  Assuming no extreme share market volatility I am targeting a net worth of $390,000 for August 2013.

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