Monday, 2 September 2013

August 2013 Net Worth: $385,000 (+0.0%)

Value% Change
Net worth$385,000+0.0%

My Net Worth performance has become a lot more volatile of late in line with the share market.  My share portfolio now comprises a significant portion of my assets and as such, swings in this portfolio often more than outweigh all the savings and investing effort that I put in.  August 2013 represented my second worst performance ever although it was (thankfully) still in positive territory.  I round the figures but my actual increase in net worth over the month was a whole $102!

This month was affected (in both a positive and negative sense) by more than just the share market and I will outline the major effects in more detail below.  My target for the month was a net worth of $390,000 which I obviously missed by a significant amount.  Some of the factors which affected my performance this month included

Positive Factors

  1. The allocation of my employee shares to my account
    • When my ESP shares are allocated to my account I typically get the 15% step up associated with this (the discount that I get the shares at)
    • However, at the same time I also account for the tax that I need to pay on this step up so the recorded gain is more like 8%
    • This month I got allocated the shares and the share market started tanking almost straight away.  I have held onto them in the hope that I can make more than the 15% like I have tried to do in previous months so the recorded gain is actually somewhat less than the 8% that I would expect
  2. I managed to save some cash into my home loan offset account
    • When my investment property when positively geared I stopped savings as much into my offset account and started investing this money in shares instead
    • In the last month I contributed more into my offset account for 2 reasons
      • I am starting to think about buying my own house in the near term (next 1 - 2 years) so want to be more liquid
      • On a net basis I haven't really paid down any of this loan since the start of the year
  3. I have saved more in a high interest savings account to 'smooth' my credit card bill
    • Every second or third month I moan about how high my credit card bill is and how it has blown up my savings plans for the month.  I have a new method to combat this
    • When I actually spend on my credit card (not necessarily when it's due) I transfer some of this from my transaction account so that I have a block of funds to pay this amount back when it falls due
    • This means that in months where I have a low credit card bill I typically have lower savings in this high interest account and in months where I have a high bill I have higher savings
Negative factors
  1. A rather bad performance in my share portfolio
    • After the stellar month I had in my share portfolio last month I was not surprised to see it pull back somewhat however the instability in the Middle East and other factors have combined to see the value of my portfolio drop by ~4 - 5%
    • After adding in the benefit of my employee share plan (outlined above) as well as my regular contributions to this plan the value of my share portfolio fell 1.5% over the month
  2. A higher credit card bill driven by large annual expenses
    • My home loan insurance bill and my car registration fell due this month.  The combined value of these was $1,500 - both were placed on my credit card which has caused my bill to nearly double when compared to last month
    • Further the repayment of last month's rather large bill meant that I had less money to save
    • For a more in depth look at this see my expenditure tracker for the month
As mentioned above, I did not hit my net worth target for the month.  Given my overall net worth did not move significantly over the month I am going to have the same target for the coming month - i.e. my Net Worth target for September 2013 is $390,000.  I know it is just a number but psychologically I really want to cross the $400,000 mark before the end of the year.

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