Wednesday, 22 July 2015

June 2015 Annual Report

The last year saw so many changes in my life and as I look at the financial impact of these changes it really struck me once more that you can't look at your financial life without examining your whole life.

Your financial life and position is a direct reflection of the whole life that you choose to lead.  As a very simple example if I had not been preparing for a wedding this year I probably would have had significantly more saved towards my house.  That being said if I wasn't looking at getting married in the short term I probably wouldn't be looking at saving for a house.

This was a transition year for me.  It was a year where things other than finances took centre stage and I didn't mind that...the work I had done over the past 4 or 5 years had put me in a position that a bunch of life changes were not going to significantly impact my life.

For those of you who read my blog regularly you may have noticed that I plan my financial goals with a December year end but I do my annual review on a June year basis.  This is purely a matter of history.  I started this blog in June 2010 and the logical time to do an annual review seemed to be a year after that point.  I have thought about changing that several times however it always provided a useful midpoint review of both my goals and my progress.

Goals: Achievements and progress

As this review straddles two years I will be looking at 2 years worth of goals, achievements and challenges.

Amount Spent
Buy a Sports Car
Get Engaged
Get Married
Big Honeymoon
Save for new Home

As I mentioned in the introduction this year was a year where things other than finances took centre stage.  Last year was a year where I did all those things which I had been putting off for years so in this goal and progress tally you see less about building net worth and more about enjoying life.  I managed to buy my sports car, get engaged and get married all within the last 12 months.  Yes it set me back more than $70,000 but would I change anything...not a chance!

That doesn't mean that I wasn't saving and investing at the same's just that by comparison those were not taking center stage.  In case you were wondering I also managed to contribute $5,000 to my emergency fund and ~$20,000 to my share account in the last year.

Portfolio and Investment review

Over the last 12 months my net worth increased from $503,000 to $561,000 at the end of the financial year.  The less than spectacular performance this year was almost entirely driven by the fact that for the year before that I had been saving cash to pay for an engagement ring, a wedding and a sports car without ever having accounted for the fact that eventually I would have to pay this cash out to actually purchase the things I was looking to buy.

I started accounting for these future cash expenses (which I called "future liabilities) in January 2015 and you can see a dip in the green net worth line below at this time.  Going forward I will be accounting for big upcoming expenses when I plan them.

The chart below is one which I update every year and which tracks my progress from the beginning of my blog.  When I started the blog I think I would have hoped that my progress would have been faster and that I would be closer to the $1 million mark already.  That being said, so much has happened including a change of job and career (to one which pays less), getting married and moving out (which hurt my savings rate substantially) and starting to enjoy life a bit more all of which combine to make my life better...but my net worth not as high as it could have been.

I'm still incredibly happy with where I am and I'm excited to be able to put my head down and concentrate on building wealth now that a lot of big expenses are behind me.

I've intentionally been changing my asset portfolio split over time.  In 2012 I had 74% of my assets in property and 12 % in shares. In 2013 property made up 61% of my portfolio and shares made up 18% and you can see the progress of my asset classes in the charts below.

The shift away from property has been intentional and partly mechanical.  My heavy weighting to property because I had bought a single large asset (my investment property).  Some people want most of their assets to be in property and so intentionally skew their portfolios in this direction.  In my case it was purely a matter of having a lumpy asset come into my portfolio and then over time re-weighting the rest of my portfolio.

I account for the investment property at purchase cost (admittedly the price has not really moved over time so it's not like I'm sitting on a giant windfall that I should be accounting for) and as I have saved and invested into other asset classes the property has become less important within my portfolio (admittedly it is still nearly half of all my assets).

Over time I will continue to re-weight this portfolio.  For a description of what I want to do with it see my 'goals going forward' section below.

Blog review

90 million blog has also celebrated another anniversary and is now 4 years old which is a huge milestone for me!

A year ago I split the blog into two parts - this blog remained a personal finance and personal journey blog whilst the information I had uploaded about Investment Banking over the years was spun out into a new blog: Banker's Pitch

The original plan was to redesign and refocus this blog completely including a new home, a new name and a new look.  However starting Banker's Pitch took me far longer and was far more effort than I originally imagined.

Another year has passed and I'm still using the old design however my goal in the next few months is to completely overhaul the look and feel of this blog.  I still haven't settled on a new name for the blog (90 million hasn't really reflected my goals for a while now) so any ideas would be much appreciated.

In terms of readers the blog looks something like this:

2012 - 2013
2013 - 2014
2014 - 2015

As you can see the number of people reading the blog has decreased significantly.  A significant part of this was the moving of the investment banking traffic to Banker's Pitch but there was also a significant decrease in my native blog traffic.

There are a heap of reasons why but they are mostly my own fault.  I used to post up to twice a day (and this decreased to once a week in the last year).  Honestly I was burned out trying to do too much (which I wrote about at the start of the year) and this blog was the one thing that took a hit in order to keep me sane.

On the upside though I have really built some great friendships over the last year with people who read this blog.  I have had long email chats and even a couple of face to face meetings with people who read the blog which is something I never thought would come from the blog.  I'm going to be putting more effort into it in this coming year and hopefully soon you will be seeing a completely new and different look.

Goals going forward

In years gone past this was the point where I had my mea culpa moment and reset unrealistic goals that I was unlikely to achieve.  For once this is not the case.  I am currently tracking very well to my 2015 goals as you can see below:

Goal2015 Total2015 TargetRemainingAchieved?
#1: Get Married$5,000$5,000$0YES
#2: Honeymoon$20,000$20,000$0YES
#3: Home Deposit$0$40,000$40,000No
#4: Emergency Fund$5,000$10,000$5,000No
#5: Share Portfolio$245,664$276,000$30,336No

That being said a few readers have suggested breaking my net worth goals down into smaller bite size pieces each year.  This is a brilliant idea and sometime I encourage everyone to do.

By June 2016 I want a net worth of $700,000

This is a massive increase on 2015 however I think I can do it.  In terms of where I want the extra ~$140,000 to come from, I am looking for it to come from the following areas:

  • Cash: +$100,000
  • Stocks: +$20,000
  • Property: +$0
  • Superannuation: +$15,000
  • Debt: - $5,000

The build up in cash is likely to continue for the next few years as I save for another home.  I'm targeting $400,000 in cash within 3 years.  Why so much?  Well my wife and I have decided that we would like her to be a stay at home mum.  With my single income we have worked out that we can support approximately $750,000 in total mortgage debt without experiencing any mortgage stress.

Now I'm not about to go out and buy a $1.1m property...but we are going to draw down my investment property loan for the deposit on the new house (approx $350,000)  and we will then be looking to buy an $800,000 home for ourselves.  To my American friends reading this blog...unfortunately this amount doesn't get you all that much in an Australian capital city.  We want a 4 bedroom home with a garden within about 45 minutes of the city and this is what you end up spending.

In terms of my share portfolio I will not be contributing more from my wage into the portfolio above my employee share plan (10% of my wage).  What I am going to do is to continue to look closely at my portfolio and actively manage it.  I really started doing that in the last half of the year and I've started to see some good results.  I'm currently sitting on a pile of cash that is waiting to be invested so there is plenty for me to do on this front.

My superannuation account is something I have been very lazy with over the years and the ability to tax defer investments I would be making anyway is something I'm definitely looking to take advantage of.  I have previously rationalized (with myself) that I wouldn't do this while I was in a  cash build up phase however the logical place for this to come from is my share investment account.

This will also be a big year for my blogs.  I'm going to give Banker's Pitch one more year to be profitable and successful.  After this point I'm going to focus my efforts elsewhere.  This blog is my baby though and even if no one continued to read it I would continue to write it.  That being said I want much more focus on this blog and I will be looking to shake things up in the coming year.

A final note

I wanted to send out a massive thank you to all of you who have been sharing this journey with me.  Hopefully I have been adding some value to your financial journey.  Thank you for all the emails and messages of support and advice throughout the last year.

This year was also the first time I met some of you in person or chatted over the phone.  That was a giant step for me give how nuts I am about privacy...but the world didn't cave in and I made some great new friends so thank you.

If you ever want to chat to me shoot me an email and I promise I'll try and respond.  I'm hoping the next year will be as awesome as this year and I look forward to sharing it with you all!


  1. Cool review here 90M! Good job with the goals and a realisation that for lack of a better term, it's "not about the money, money, money" or at least not all about the money!

    It's people like yourself and a few others who are big inspirations for me, hopefully keep in touch and continue to smash out those goals together!


    1. Thanks Jef! I think I've shifted in my own mentality. When I first started this blog I think it was all about the money but I've shifted recently.

      Thanks for sticking around and commenting for so long as well!