Tuesday, 1 March 2016

February 2016 Net Worth: $720,300 (-1.0%)

This was my first negative month in 7 months which is a pretty good run rate when you think about it but I have a bit of an embarrassing fact to admit...I totally screwed up last month's net worth which actually did terribly...as in the worst performance I have ever had.

It was only because an error on my part that I thought I actually had a decent performance.  The error in last month's performance was due to a share consolidation that I had missed.  Basically the error was as follows:

  • I have ~$4,000 worth of Hello World, an Australian listed travel agency
  • Hello World did a 1 for 6 share consolidation which raised the price 6x
  • I should have just adjusted the shares I held by the same amount but because I missed it (and my share prices populate) I looked like I had $24,000 worth of shars
  • January's net worth was actually overstated by $20,000...instead of an increase of $13,000 I should have seen a decrease of $7,000 to $707,000
Why did I outline this?  Because I actually did reasonably well this month in increasing my net worth to $720,100 and my explanations wouldn't have made sense in the context of a falling net worth.

February 2016 Net worth...the detail

As with last month's net worth performance I decided to increase my net worth disclosure and provide a little more detail which should make it easier to follow:

As I discussed above the big movement in performance was the direct share investments which fell from ~$245,000 to $231,000 but this was almost entirely driven by the error in the share count post the share consolidation.  Without this effect my share portfolio actually did rather well in the month.

Other significant effects on my net worth this month included:
  • The vesting of my employee share plan which gives me a 15% gain immediately on vesting. This year I decided to bite the bullet and sell the shares as soon as they vested.  I sold some old parcels that I had which were technically at a loss so there shouldn't be any tax implications.  This explains why I'm sitting on so much more cash than I was last month.
  • A significant reduction in my credit card bill.  I genuinely can't remember the last time I got to the end of the month and my credit card bill was below $3,000!  And it's not like it was a low expense month either... on this bill was a water bill, a rates bill and my car registration renewal!
  • A small increase in my alternative investments.  I made a series of investments in coins this month.  I'm running out of place to store them so am thinking that I need a more defined strategy for this investment
  • A decrease in my superannuation balance which was caused by me moving too early out of defensive stocks and into the stock market.  Hopefully this proves to be the right decision over time because I don't want the first time I took control of my superannuation to be a negative!
The coming month should see some reasonably big swings in my net worth driven by our annual overseas holiday.  Although I provide for this in my future liabilities balance and have cash set against these my wife tends to contribute quite a lot to these holidays so my performance looks better because it appears that I'm spending less.  We also tend to spend savings on our holidays while we are still earning cash from our day jobs (the job of being full time employees!)

I'm hoping to get above the high watermark set last month although a $7,000 increase is always a challenge.

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