Monday, 2 June 2014

May 2014 Net Worth: 492,000 (+0.8%) and Expenditure Tracker

This monthly post of my net worth may look a little different to my regular readers.  I'm trialling having my net worth post and expenditure tracker post in one article.  If you like this (or dislike it and prefer to the two separate articles) let me know.

May 2014 Net Worth: $492,000 (+0.8%)

Value% Change
Net worth$492,000+0.8%

What drove my net worth performance this month?

I was actually reasonably pleased with my net worth performance this month.  I achieved exactly what I set out to achieve this month (as discussed in my April 2014 Net Worth post).  I did not save as much as I wanted to as I booked several things on my credit card (which I will discuss below) which increased my liabilities significantly.  However offsetting this was a strong share market performance.  The major movements in my performance are described below:
  • Positive factors
    • A strong performance in my share portfolio. 
      • This month one of my companies did an accelerated renounceable rights offering.  Unlike a non renounceable offering there is no opportunity to apply for an overallocation of rights which are not taken up.  However I could apply for my rights.  Theoretically this should make me value neutral however the value of these shares traded well above the Theoretical Ex-Rights Price and I made a good return from them
    • Continued Savings into my Employee Share Plan.  
      • I never really understood why 'pay yourself first' worked so well until I started investing in my employee share plan.  It is an amount that gets taken out of my wage before I even see it
    • Continued Savings towards my 'big goals'
      • As I've written about before I'm currently saving for a ring and for a wedding (I'm reasonably confident she'll say yes).  Although this bolsters my net worth in the short term I'm going to experience some seriously negative movements once I actually buy the ring and start booking venues. 
  • Negative factors
    • A huge increase in my credit card debt
      • My credit card balance tripled this month from a more 'normal' $2,000 to over $6,000 (for the first time ever).  This is because I was paying for an upcoming overseas trip which I will discuss below

What is my outlook for next month?

I am still hopeful that I can get to my (revised) goal of $500,000 by the end of the financial year next month.  Next month will be the third anniversary of tracking my net worth and I hope I will be able to reach this milestone by then.  I will be receiving my tax return then - I should have received it by now however my accountant made several mistakes so I am having to revise it - which will hopefully push me over the line.

May 2014 Expenditure Tracker

ItemMay 2014Monthly TargetPerf. vs Target
Accommodation / Living expenses $1,799$2,246-$447
Car expenses$488$692-$203
Health / Well being expenses$417$566-$149
Entertainment / Personal expenses $1.455$1,230+$238
Travel expenses$5,429$675+$4,754
Other 'big' expenses$2.700$3,508-$808
Savings / Investments-$1,476$1,051-$2,527

If we look at the major line items in my tracker above

  • Accommodation and living expenses
    • Expenses in this category were lower as I am no longer setting up my apartment.  I did have to pay some utilities bills during the month but they were within expectations.
    • I'm reasonably pleased with how I performed in this category.
  •  Car expenses
  • Health / well being expenses
    • This was also within expectations.  One of my hobbies has large lumpy payments and I didn't have to pay any tuition charges for this hobby this month.
  • Entertainment / personal expenses
    • I'm still running far too high on my entertainment expenses.  Within this category I have a sub category called "Dinners and Entertainment" - i.e. anything I go out to do at night.  I normally budget $650 per month for this...however this month I spent more than $1,100 in this category.  It is something I definitely need to get under control
  • Travel expenses
    • This is where the big blow out occurred this month.  I am going on one big overseas trip later this year.  I'm also travelling interstate for a wedding.  I booked both sets of airfares and a tour for my overseas trip this month.  
    • I also funded a fair share of my girlfriend's travel plans (although she will pay me back at a later date)
    • I'm not overly upset at the amount I had to spend on this trip.  I knew it was coming and it was completely budgeted for.  I need to make sure that my total expenses on these travels don't exceed what I had originally budgeted though.
  • Other 'big' expenses
    • I continued to save towards my 'big goals' including proposing, saving for a wedding and finally buying my sports car.  These remain on track and a fair amount will be funded from my bonus so I'm not concerned about the perceived under performance.
  • Savings / investments
    • As my budget needs to actually 'balance', most of the over-spend this month came out of my savings account however some was allocated to debt (i.e. my credit card).
    • I am looking to replenish this savings as fast as I can however it may be a couple of months due to the impact of my large credit card bill on next months performance.
In the coming month I had expected to be allocating money to my first home saver account however the government has cancelled this program so I will be looking for a new way of saving for the home that I want to move into.  I haven't yet worked out my strategy for this yet and I will post about it when I do.

Let me know what you think of the new post format.  Is it too long?  Too much going on?  Should I revert to doing separate posts like I have in the past?

You May Also Be Interested In
April 2014 Net Worth: $489,000 (+0.3%)
April 2014 Expenditure Tracker
Profiting from your employee share plan
Saving for marriage: My plan


  1. I think it is great together as one post, there is not too much happening and it is not too long.. Consolidates it all nicely, only my thoughts though :)..

    Congrats on the 500k mark approaching as well, awesome effort and I'm sure the momentum will really start to kick off nicely now.. Can not agree more with paying yourself first as well, one of the vital factors of gaining financial independence :)

    1. Thanks for the comments on the blog. I think I'll stick to this format for the near future (unless there is a lot to talk about).

      Automatic savings plans are amazing - the fact that you never see the money means that it never even forms part of your budgeting process (superannuation is great for the same reason)!

  2. When are we going to see a comprehensive breakdown of your assets and liabilities? I'm dying to know what you've got under the bonnet!

    1. Hi Streetikonz! Welcome back!

      I'm probably not going to do it every month but next month I'm going to do a bigger breakdown of what my assets and liabilities look like for my annual performance review. It should give you a peak at the structure of my portfolio.

      That being said - I do tend to keep it simple. I don't have as much structuring as you do and I view my investment property loan as a portfolio type loan. I.e. the cash I put into that loan can be pulled out later to invest in shares etc.

      Anyway you will get much more detail next month.

  3. What is your target price for a home purchase?

    1. Hi Rob. I'm thinking of buying a house in the 600 - 650k range. I'm thinking of buying it with only ~50% leverage though.

      I would normally lever it much more but I will be drawing all my available cash out of my investment property loan and I want to be able to service the total loan portfolio in the absence of rental income from the investment property (I'm quite conservative in this sense)

    2. What are mortgage interest rates in Australia? I am from the states (Wisconsin) and mortgage rates are only 4%. Therefore, my strategy is to lever my personal residence and invest the funds in my share account to gain a higher yield....

    3. Mortgage rates in Australia are around 5% however the difference is that we are unable to fix our rates for an extended period of time (2 - 3 years max). If I could fix these rates for an extended period of time I would think about doing it.

    4. Thought you could lock in for up to 5 years at least that's what it was when I worked @ Westpac..

      While the rates for fixed are generally higher I see them going up (not by a lot) over the next few years.. Then again banks aren't going to rip themselves off and probably know a lot more about rates then what the average Jill or Joe would know

    5. I didn't know Westpac offered rates that long - will definitely check them out when I have to refinance my loan next year. Thanks for the heads up!

    6. You're welcome, this may have been a staff offer but thought that all banks offered 5 year fixed loans.. I could be wrong here..