Wednesday, 6 July 2016

June 2016 Net Worth: 761,000 (-1.5%)

I thought I would start this post with a quick thank you to those who still read this blog 5 years after it first started.  I know that I am posting less than I used to and it has gone from being a blog which disseminated some (hopefully) useful financial knowledge to pretty much a pure personal financial blog.

I know I've explained it before but I thought it would be worth recapping why I decided to post less.  Most of us only have a finite amount of time in the day and I had to decide how to spend mine.  Instead of posting on this blog (and indeed on other blogs which I write) I decided to scale that back and spend time actually investing and trying to get ahead financially.  There were plenty of things which I had planned to do financially which, frankly, were never getting done and I was spending hours each week writing blog posts.

I decided that a better use of my time was to focus on my business of investing.  Unfortunately this has meant that I have far less time to post here.

With that being said I do still enjoy tracking my financial progress and it does allow me to take stock once a month of where I am at.  This month I will also do an annual review of how I have performed over the last year (I will upload that post in a few days time).

June 2016 was a tough month...

I don't think I'm the only one that had a tough month this month with markets going into a nose dive on the back of the unexpected Brexit vote.  My share investments tend to be higher risk and have a higher beta and my financial performance suffered significantly as a result.

Here is a summary of where I ended the month...

Now let's see where I took most of my pain this month...

Direct Share Investments (-$12,900)

This was a pretty painful result and losing just over 5% of my portfolio in one month is not something I hope to experience all that often.  So what drove the major falls in my portfolio?
  1. The Brexit obviously had an impact on all my share valuations
  2. The strong appreciation of the Australian dollar over the month versus the US dollar hurt my US dollar investments and some US cash I have been holding onto waiting to change once the currency moved in my favour
  3. My deferred compensation in my employers stock was significantly affected as that stock valuation dropped much more significantly than the market
Honestly I'm looking through the fact that I have had such a significant set back in my portfolio value and am using the fact that I am incredibly long cash to use this as a buying opportunity in the market.  I'm avoiding stocks which may genuinely be affected by Brexit considerations but trying to buy things that are selling off on general 'sentiment' type issues.

Other Investment Assets (-$2,300)

The fall in the market post Brexit also significantly impacted my superannuation balance.  This was offset by continued employer contributions to my superannuation fund as well as my employee share plan. 

Other Assets (-$500)

My wife and I continue to save a significant amount of our take home wage towards our new home fund.  However at the same time we have been doing renovations on our current home and this month we did a big laundry renovation which set us back about $4,000 which we paid for in cash.  This was offset on the other side by the elimination of our future liabilities bucket.

Liabilities (-$4,000)

My credit card balance moved marginally however the biggest change this month (as discussed above) was the elimination of my future liabilities balance.
Originally I was planning on topping up this balance for things like starting a family and further renovations that we would be undertaking but then I realised that actually these were just part of life.  They weren't like saving for a new car or for a wedding and honeymoon or a large holiday.  Those you have the effect of building up a lot of cash which then gets spent in one hit so you want to account for this in the future.

As a result I have decided to keep my future liabilities balance at 0 and only add to it if I can see a large expense coming up in the future.


The first week of July has been pretty bleak with stock values continuing to fall.  I haven't yet taken advantage of the buying opportunity that has arisen because even though stock values fell significantly they are not at the significantly depressed levels they were at in January when I made some pretty timely purchases.

I am also trying to rationalise my investment portfolio to a manageable number of individual stocks so will continue to do that at the same time as looking for new investment opportunities.

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