Thursday, 1 September 2016

August 2016 Net Worth: $800,000 (+1.5%)

When I last updated my net worth I listed the 4 major things I wanted to do during the month with my investment portfolio.  They included:

  1. Get my individual stock holdings down to 10 (from 11)
  2. Progressively transfer stock holdings into my wife's name for tax reasons
  3. Work out what I want to do with my managed funds
  4. Move cash and stock progressively out of my Interactive Brokers account
I managed to get exactly none of this done and actually did very little in August at all on the savings and investment front.  Why did I get so little done?  Frankly work was so busy for me during the month that I spent the whole month just trying to get enough sleep and not burn myself out.

I now have more time so will be working on doing some of that this month.  One thing that I am planning on doing this month (which ticks several of the boxes above) is selling index funds that I hold in my Interactive Brokers account and buying them in my wife's name:
  • Given the shares are held in the name of interactive brokers I don't get the benefit of the franking credits of Australian index funds (costs me 1% p.a.)
  • I have a capital loss on some of these funds so the transaction costs are far lower than would normally the case
  • I get the benefit of having the earnings taxed in my wife's name going forward.
It's a no brainer and I'm just putting things into place so I don't get burned too badly from market moves while I buy and sell in different accounts.

So if I did nothing this month how exactly did I manage to get an increase of $12,000 in my net worth?  There were a couple of bit things which really benefited me including:
  • The vesting of my employee share plan
  • Continued saving into my employee share plan and superannuation plan
  • A positive share market move which helped increase both my share portfolio and superannuation valuations
  • Small increases in my home loan savings account and a pay-down of my credit card bill

August was the first month where I got to a net worth of $800,000!

Direct Share Investments (+$13,700)

Although the rising share market significantly resulted in the valuation of my shares increasing significantly, the real benefit came from the vesting of my employee share plan.  Cash moved from being a restricted investment into shares.

I will be looking to sell these shares very soon as they have performed well since listing.  I'm also not going to make the same mistake I made last time and will convert my currency straight away.  I may lose the benefit if the currency falls further but I get the locked in gain of my employee share plan discount.

Other Investment Assets (-$5,400)

The largest fall in my other investment assets was associated with the vesting of my employee shares.  However this was offset to some degree by the increased savings into my superannuation.  In the coming month I should have more restricted investments vest into direct shares however I will be looking to sell these and put some towards my home savings.

Other Assets (+$3,000)

The increase in other assets was the savings we managed to do during the month towards our new home.  Given the very high credit card bill we had during the month we actually didn't have a lot of spare cash to save.  

Liabilities (-$300)

We managed to decrease our credit card bill by $1,300 this month which was offset by the increased tax liability that resulted from the vesting of my employee share plan.

Our credit card bill is something that my wife and I have been chatting about recently.  It has remained stubbornly high and a significant part of my wage goes to paying it off each month.  It's strange though because we are living pretty frugally at the moment and we really feel like it should be lower than it is.

It is amazing how much of our credit bill is just spent on unavoidable expenses like groceries, insurance payments, fuel and other items which are hard to cut down on.  My brother and his girlfriend have managed to save (on incomes that are half of what we make) an incredible amount of money by living at home and sharing expenses with parents (and getting a free ride on things like home insurance payments).  It really goes to show how much harder it is to save when you are not living at home!

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