Friday, 1 November 2013

October 2013 Net Worth: $414,000 (+5.0%)

Value% Change
Net worth$414,000+5.0%

My target this month was for a significant net worth increase from the previous month and I wanted to get over $400,000 (which I thought may be a bit of a stretch).  As you can see above I smashed through this because of a really strong share market performance which I will discuss below.  The volatility in my net worth in recent months has almost entirely been driven by my share market performance.

An interesting thing I noticed was that, because I have been concentrating on the small factors - i.e. controlling my expenditure and saving and investing where I can and ignoring to a large extent my overall portfolio (other than this update every month) the growth in my share portfolio and the impact this has on my net worth continues to surprise me.  It is now a significant portion of my net worth (whereas before much of my wealth was tied up in my investment property).

Below I have outlined some of the factors (both positive and negative) which have impacted my performance this month

Positive factors
  1. A continued positive performance in the stock market
    • After the US government stopped it's shut down the market responded quite positively and this impacted a lot of my investments (as I tend to have a risk on portfolio)
    • One of my shares, FKP had a very strong run and I partially sold out some of them, taking a nice profit along the way
      • Because I had different entry prices I wasn't burned by a CGT liability at all (which I include in my tracking).  Any further sales in this stock will incur capital gains tax however I have held a significant number of them for longer than 12 months so will be entitled to a discount
  2. Strong savings into my offset account
    • I did not manage to save a great deal from my wage this month into my offset account - my personal expenditure is still not under control (although is much better than in previous months) however some of my restricted cash bonus from last year vested which allowed me to save more than I had originally expected
Negative factors
  1. Low levels of cash
    • Although I have improved my cash position compared to where I was at a month ago, it is still much lower than I like it to be.  I try to always have a minimum amount in my transaction account ($500) and when I budget I have to top this up if I have dipped below it - this month I went really far below it and am having to incrementally catch up while saving more
    • This month I had some significant personal expenditures including a weekend trip as well as booking flights and accommodation for an overseas trip I'm taking in a few weeks
  2. Continued high credit card balance
    • I sat down yesterday and went through my credit card statement line by line and it is incredible how a lot of small purchases can result in a persistently high credit card bill - at least my cash smoothing plan is helping dull this pain somewhat
Given the rather scary run the share market has had I have no doubt it will pull back at some point.  If I'm going to be perfectly honest I would be really happy if my net worth reached $440,000 by the end of the year (remembering that I still have my 2013 bonus and tax return to be paid).  Given that November is the month that all this big stuff usually happens, I am hoping to get to a net worth of $435,000 for the month...although this may be significantly lower if the share market decides to take a slide.

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