Previous update here.
June was a pretty full and enjoyable month for me. Work is increasingly at capacity – I get to the end of the week pretty spent but satisfied with putting in a solid effort.
With the extra work load I really started giving more thought to the prospect of simplifying my portfolio and the effort to maintain and investigate potential stock investments. As you can probably tell by now, I try to adhere to a value investing approach, research companies in moderate detail, attempt valuations etc. To do this justice takes time and effort. Between work, life and a PhD to finish I found myself too pressed to even think about researching stocks.
So I let myself entertain the idea of following one of the ETF portfolio’s I’ve been considering. I’ve never looked at historic returns for this portfolio but when I put the numbers into Sharesight it turns out that over the past 5 years, the 5-fund portfolio returned around 17% p.a. (without re-balancing). That’s not bad considering it would involve such little effort. It surprised me a little that the biggest draw card toward passive investing has become the inaction and the time it could free up in my life more generally. Perhaps I’ll be persuaded. If you’re a mainly a passive index or ETF investor, please let me know what you consider the benefits (or drawbacks) in the comments below! I’d love to hear what you think! 🙂
Cash decreased a little, Superannuation was up slightly and my taxable investment portfolio increased as I added $3,200 after I made an investment in Wilson Asset Management’s Global LIC (WGB.AX) and topped up an investment in Thorney Opportunities Ltd (TOP.AX). The portfolio fell around 2.8% overall for the month – these short-term movements are just noise.
Credit debt increased but as always, is paid out end of month. The business loan decreased and all other debts were steady.
It’s EOFY now and I’m yet to have a proper chat with my accountant but I’m hoping to clarify a few things about commercial property, loans and setting up an SMSF.
I’ve started setting aside 30% of my monthly income for tax purposes. It just sits in a high-interest savings account with UBank earning close to 3% p.a. This should be enough to prepare me for tax time. As a result, my savings rate going forward are after tax.
Savings Rate: 53.5% Woohoo! Nice to get above 50 per cent!
Cash: $18,068 decreased 2.78%
Superannuation: $43,737 up 0.97%
Investments: $24,622 up 14.78% (market loss + $3200 deposit)
Other Assets: $9,189 down 1.20%
Total Assets: $95,616 up 3.19%
Credit Cards : ($1,760) up 21.40%
Student Loans: ($32,305) steady
Business Loan: ($10,150) reduced 2.87%
Other Liabilities: ($21,500) steady
Total Liabilities: ($65,714) increased 0.02%
Net Worth: $29,902 increased 10.95%
Hope that you had an excellent month in June. And hopefully we can all increase our net worth a little more in the new financial year!
- 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 with Pocketsmith. 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.).
- Superannuation is the Government mandated retirement savings system in Australia
- Other Assets consists of one car at market value, depreciating monthly.
- 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 $55,874 p.a. or more in 2017/18.
- Other Liabilities consist of two loans which are interest free.