One of the interesting things about updating my net worth every month is that I totally ignore the larger numbers...I'm far more interested in how I'm performing month to month...but occasionally when I cross a bit milestone like $1 million in assets...that's pretty exciting!
So how did I do it and what changed? Well read on below for details.
Net Worth: $639,000 (+8.0%)
Value
|
% Change
| |
|---|---|---|
Assets
|
$1,052,000
|
+6.3%
|
Liabilities
|
$412,000
|
+3.8%
|
Net worth
|
$639,000
|
+8.0%
|
This month was absolutely crazy for me. I took a massive hit in my share portfolio as global share markets sank to their lowest levels in 4 years. However offsetting that was a large increase in the value of my property. I will go through this and more in my detailed explanations below.
I refinanced my property loan and the bank increased the valuation of my property substantially
- I bought my investment property in late 2010 and since then I have been recording the value of my property at it's initial purchase cost ($440,000). I was never tempted to update the value of the property because in all honest property is such an illiquid asset that you can never know the true value. I thought the best way to be conservative was to keep the value as it was.
- I still believe that is the best option when it comes to illiquid assets however this month I refinanced my loan (after moving into the property and seeing the savings that I could have from it). The bank revalued the property at $480,000 (a $40,000 increase in the valuation) and allowed me to leverage up my property once again to 80%.
- I took the extra cash that the bank had given me and stuck it in my offset account. I did this for tax reasons but economically it made no difference. The benefit to my net worth was from the $40,000 increase in the valuation of the property. I also managed to reduce the interest rate I was being charged from 4.76% to 4.20% which will save me well over $1,000 over the course of a year.
My share portfolio took a MASSIVE hit over the month
- The last month was not pretty if you were a share market investor. The market fell significantly and the value of my shares fell by approximately $15,000. I took this as a buying opportunity. I had been selling out of shares in the last few months and this month I got back in in a big way.
- I probably went a bit early and didn't get the absolute bottom but I'm well ahead on the prices I purchased at.
- The problem I face, however is that I am so heavily invested in the market that even investing a significant amount of cash at low prices doesn't make up for the pain I feel in the fall.
- I'm not disenchanted though and if more buying opportunities arise I am going to take them
Additional cash received from wedding gifts
I mentioned that last month we received significant gifts for our wedding. This month I banked some more cash from our wedding. We can't believe how generous our friends and family were and this has really given us a leg up financially.
Having gone through the experience I would highly recommend asking for cash gifts for your wedding especially if you have already lived out of home and don't actually need all that much to set up a house!
Renovating and my honeymoon have increased my credit card balance and reduced my cash...but that's what my future liabilities balance was for!
- My credit card balance at the end of the month was close to $11,000 which is higher than it has ever been before. This was entirely driven by spending on the renovations my wife and I are doing on our home.
- Additionally I transferred an additional $10,000 to our travel visa debit card for use on our honeymoon
- I had provided for both of these expenses in my future liabilities balance and over the month this reduced from $29,000 to $8,000
In addition to all of these there were a bunch of small moving parts including my wife's birthday which cost me far more than I first imagined, investment in my employee share plan and superannuation as well as a host of other things which pale in comparison to the factors mentioned above.
In the coming month I have no idea what is going to happen. I'm going to be away on my honeymoon and who knows what markets are going to do! I am going to hopefully build some cash as I have used quite a bit over the past few months. If I can get to a net worth of $645,000 over the month I would consider that a great outcome!
August 2015 Goal Tracker
Last month I was bemoaning the amount of cash I had sitting on the sidelines waiting to be invested in shares...well it's not sitting there any more! It's fully invested now.
In addition it is actually getting quite a bit harder to track how much I am actually saving for my home deposit given it is both my wife and I depositing and withdrawing from this account. I'll work out a new system soon enough!
| Goal | Aug 15 | 2015 Total | 2015 Target | Remaining | Achieved? |
|---|---|---|---|---|---|
| #1: Get Married | +$0 | $5,000 | $5,000 | $0 | YES |
| #2: Honeymoon | +$0 | $20,000 | $20,000 | $0 | YES |
| #3: Home Deposit | +$15,147 | $34,147 | $40,000 | $5,853 | No |
| #4: Emergency Fund | +$833 | $6,667 | $10,000 | $3,333 | No |
| #5: Share Portfolio | -$2,618 | $238,710 | $276,000 | $37,290 | No |
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Awesome to hear from you 90M, it's been too long between drinks! What's been happening?
ReplyDeleteCongrats on the re-finance, the markets are pretty volatile however not necessarily a bad thing..
Interested to hear how the renovations go/went as well :), maybe these have already been posted about :O ha