Tuesday, 1 December 2015

November 2015 Net Worth: $700,000 (+5.9%) and Goal Tracker

I love bonus month!  It's the one really big cash inflow that I have during the year and this year was no exception.  Bonus month helped my net worth jump almost 6% to hit the $700,000 mark for the first time.

Crossing these milestones is always a bit of a strange experience.  I technically know that I am building wealth but my life doesn't feel any different.  I'm still doing exactly the same thing day to day but the effect of compounding seems to be accelerating the process.

Net Worth: $700,000 (+5.9%)

% Change
Net worth

This month my net worth increased $39,000 and there were a couple of huge factors that led to the increase.  For once most of it was actually expected (as opposed to hitting me from nowhere) but it was still pleasing to see everything running as expected.

My bonus got paid in the month

  • My annual bonus forms a significant part of my income and it was paid this month.  I'm not going to go into the specifics of exactly how much it was but a good chunk of the increase this month was the bonus payment
  • Part of my bonus is deferred for the next few years (although part of this gets paid out every October so if you read my post last month you will have seen a significant uplift from that)
  • Tax is also taken out of my bonus payment automatically...given that it is taken out at close to the top marginal rate, I'm losing 50% of my bonus almost straight away
  • Even with all these mitigating factors it was still nice to see a significant step up in the amount of cash I had on hand

I paid my tax bill during the month

  • I had an absolutely massive tax bill this month...I owed the government more than $8,000!
  • Most of this was due to my trading in shares and as I generate profits on my share portfolio I keep track of the capital gains tax I have owing which forms part of my liabilities above
  • Although I paid out a significant amount in cash this month it actually didn't affect my net worth all that much as my liabilities stepped down by a similar amount

My investment portfolio continued to perform well

  • My investment portfolio did rather well this month increasing by almost 2% over the month
  • I also continued to contribute to my employee share plan and my employer continued to make superannuation payments on my behalf
  • My investment portfolio (including my superannuation) represents approximately half of my net worth with the rest being the home I live in and the cash I am stocking away from my next house

My credit card balance remains stubbornly high

  • One of the few disappointing aspects of this month's performance is how stubbornly high my credit card bill remains
  • We are doing renovations on our home at the moment and everything we buy goes on the credit card...I think this is an area my wife and I probably need to focus on going forward.

When I look back
at last month's post I thought I was being pretty optimistic with a net worth goal of $690,000 for the month.  I am really happy to have outperformed that target.  So what is my goal for the end of the year?  Well Christmas is always an expensive time of the year so I'm not going to be too aggressive.  If I can increase my net worth to $705,000 I'll be pretty happy.

November 2015 Goal Tracker

Last month I busted through my savings target for my new home and I continued to add to that this month.  Unfortunately given there is only one more month left in the year I don't think I'm going to get my 15% return on my share portfolio for the year.  Honestly I probably could have redirected some cash from my home loan into my share account but I'm in the middle of refocusing my share portfolio and I didn't want to force myself to have to park cash somewhere.

GoalNov 152015 Total2015 TargetRemainingAchieved?
#1: Get Married+$0$5,000$5,000$0YES
#2: Honeymoon+$0$20,000$20,000$0YES
#3: Home Deposit+$18,500$78,897$40,000$0YES
#4: Emergency Fund+$833$9,167$10,000$833No
#5: Share Portfolio+$6,910$248,256$276,000$27,744No

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