Net Worth Update

Net Worth Update (June 2017)

Black tea

Previous update here.

Quick Summary: Last month, my plan of attack was to replenish my emergency fund. Plan executed. I added $1250 and saved a further $400 (post -tax) to my retirement account, which means the government co-contribution of $500 applies (contributing a total of $1000). It’s a small concession – I couldn’t contribute a cent pre-tax from my business earnings due to the existing tax rules which stipulate that 90% of your income must be from self-employment if you wish to claim a tax deduction on retirement contributions. This ridiculous rule has been removed as of July 1st, so it’s no longer a concern. Savings rate hovering in the high 20’s, cash into savings. Credit card debt is up, but actually paid out monthly, so nothing to worry about. I put as much on credit as I can, provided it’s a regular purchase. I use the frequent flyer points for a flight home to see family every year.

Hustler: I did some serious side hustling in June, including a 600km round trip for work. I won’t see the income for a month or two, but it’s income nonetheless.

Tax: Being the end of the financial year in Australia, I spoke with my accountant and it seems that my tax due is likely way less than I anticipated. I’m stoked that all the extra money put aside for tax can now go toward my emergency fund. The glass half full perspective is that I didn’t earn enough to require being taxed more, and as I joke with a colleague, paying a large amount of tax on an enormous income is preferable to paying a small amount of tax on a small income.

Nevermind, there is always next year!

Savings Rate: 27.16%

Assets:
Cash: $3,821 increased 49.50%
Superannuation: $38,763 up 1.97% (including $400 deposit)
Investments: $9,353 up 10.05% (market return)
Other Assets: $10,622 down 1.20%

Total Assets: $62,558 up 4.58%

Liabilities:
Credit Cards : ($1,811)  increased 119.71%
Student Loans: ($31,684) steady
Business Loan: ($13,750) reduced 1.79%
Other Liabilities: ($21,500) steady

Total Liabilities: ($68,754) increased 1.08%

Net Worth: ($6,186) increased 24.46%

As always, thanks for following along.

How did your net worth and savings rate look this month?

June NW

 

Notes.

  1. Cash consists of online savings accounts. I moved away from carrying cash in Q1 2015 and make 95% of my transactions electronically, for more accurate and up to date record keeping. I have a small transaction account holding around a tenth of my cash funds with the balance held in an ’emergency fund’ and a smaller account for rent savings/payments, both in modest interest bearing accounts (2-3%p.a.).
  2. Superannuation is the Government mandated retirement savings system in Australia
  3. Other Assets consists of one car at market value, depreciating monthly.
  4. Student Loans consist of the HECS/HELP debt provided by the Australian Government,  indexed to inflation. The loan repayments are based on taxable income, with repayments required from taxable incomes of $54,869p.a. or more in 2016/17.
  5. Other Liabilities consist of two loans which are interest free.

21 thoughts on “Net Worth Update (June 2017)

  1. Well done! I especially like your savings rate, very impressive. I attribute this rate as the #1 factor to building wealth. Can’t invest what you haven’t saved up, right?

    With the discipline you have over your numbers couple with your savings rate, it is just a matter of time before your number turns positive and jumps significantly.

    Bravo.

    1. Hi Church. Thanks for the encouraging words. I agree the savings rate is very important, and even more so the higher ones income. But if you can save a little on a modest income, you can be sure to do well with a sizeable income. Thanks for stopping by!

  2. Great job, WFT! That graph is looking fine, steadily climbing up. Also, that picture! Did you take a long walk along that river? I could use a long walk these days. 🙂

    Do you mind me asking what credit card you use to earn your frequent flyer points? I’ve been looking around but it doesn’t seem like our level of spending will give us much (cheapskates!).

    1. Thanks J! It’s nice to see the NW propel it’s way to the surface. And yep, I took a walk by that river on a recent work trip, it’s hard to tell from the photo but it was stained a deep rusty black from the tannins in the trees along the river. It was a beautiful walk.

      I use a Virgin Velocity AMEX card, which gets Velocity points. I transfer flybuys to it too. It’s an OK card, there’s a fee free one which I started with, and one with an annual fee (platinum) which provides one return domestic flight with the card per year (so the fee easily covered it for me, but wouldn’t necessarily, say if you flew from Melb to Syd). You can ask them to waive the fee, they’ve said yes once to me and the other time offered me 3% interest term for 6months instead. Provided I use the flight, and eventually the points for a further flight, I come out ahead. They also only fly between specified cities sans connections so suss out the T&C’s to see if you’re happy with all that.

      Glad to see you drop by again!

  3. Good job on the savings! Everything of yours is looking up, up, up from here. I am the same with the credit card, I dump everything onto the card for the reward points and pay it off every month. The days of paying credit card interest is long behind me, hopefully!

    1. Thanks for coming by Bert. Basically I had a colleague unable to do some locum work so he volunteered me. It was similar work to my own job (self employed) but for a private organisation.

  4. Nice job WF30, gotta love a good hustle to earn some more money in future. Plus, having all that tax money actually turn into cash you can use is a great win.

    Congrats on a great return of your investments, that’s a great return in any body’s books 🙂

    Mr DDU

    1. Thanks Mr DDU. Side hustle was great and I only had to work 5hrs a day, so I had plenty of time to relax too – just as well, I had a pretty bad head cold to get over. I’m very content with the investment return, although it was sheer luck it moved up so soon.

  5. Great work on building that NW back up to a positive number. From the graph and your current numbers it looks like it will only take you approx. 12 months from when it went down to back at neutral and building strong from there.
    I feel the same about my HECS/HELP debt – its about the same as yours an still there lingering. Being self-employed do you have to pay off the same amounts as us PAYG employees do?

    1. Hey Miss Balance – thanks for the encouraging words 🙂 I pay HECS at the same rate as PAYG, the difference being that rather than PAYG tax withheld every pay check, I have to keep tax, HECS, medicare etc. in mind and put a little aside each month so that when I submit my tax return, I’ve got the expense covered. It doesn’t bother me too much and I think for most people with a HECS debt, the final payment will be so welcome.

      1. Ahh ok, interesting that you have to be proactive to put it away, I’m sure that catches quite a few people out. I’m able to claim NFP benefits from my employer so I always end up with a tax bill at the end of the year but I know it is coming so I can plan for it and earn some interest throughout the year and pay off a lump sum. It is good to see that balance go down each year – though you are correct, I can’t wait until it is gone for good!

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