Hello everyone and welcome to 2020! I am back at work and flying having completed many of my annual refresher and check sims (simulator sessions) and ready for another big year of earning and investing towards reaching Financial Independence!
Well January brings some huge and unexpected gains to the net worth due to a Superannuation settlement / revaluation. The net worth is boosted by almost $240,000 this month. This, combined with the investment decisions in shares and property has also moved my asset allocations into a much nicer proportion (for example, cash now being under 5% of my portfolio finally). The vast majority of my net worth (about 60%) is invested in the tax sheltered environment of Superannuation thanks to over 11 years of concessional contributions to my cap. With my later retirement (age 65+) taken care of, all I really have to worry about is my early retirement number now.
Cash flow for January was interesting. It was a fairly expensive month for me, since I got whacked with a few unexpected expenses (including one traffic fine due to my own stupidity). This unfortunately kept the savings rate pretty low at a measly 55%, even despite Vanguard paying me some substantial dividends.
Two standard paychecks from my flying wage plus $1,224.70 and $199.82 in dividends from Vanguard. A sizeable settlement to the retirement superannuation account (which is not considered in the savings rate).
January incurred some unexpected spending. I got whacked with a pretty shocking traffic fine (in the thousands of dollars range) which I am annoyed at myself for getting however it was out of my control so there was nothing I could do except just pay the darn fine.
I got the great news of being asked to be a Groomsmen for one of my best mates (it seems more and more of your friends get married the deeper you progress into your twenties!) It will be a great night, but I have spent just over $600 on getting fitted for formal wear – which was an unexpected cost and is a pretty huge dent in the budget I am not going to lie. Especially given I normally spend less than $100 a month on discretionary spending / luxury expenses – But it will be worth it to be there supporting my mate!
I also purchased tickets to fly interstate to another, different wedding later on in the year, which was another $580 that came out of the account.
And sadly, due to a HR stuff-up I was overpaid approximately a thousand dollars last year. The first I found out about this was when one of my paychecks was smaller than usual – the company had deducted this off my first January pay stub.
Get FIRE Portfolio
The Get FIRE portfolio is still heavily weighted to Australian stocks due to the delicious franking credits. I have found that some Australian LICs have been trading at a discount which is why I have been loading up on them for the past few months. I will likely be looking to shift my purchase horizon internationally over 2020, and looking to boost my holdings of VTS and VEU. I am not 100% sure but I am currently thinking I may sell the holdings of ARG, BKI and IVV and put the proceeds towards these international purchases. This is because they feel like ‘unnecessary’ double ups (kind of like how I have A200 and VAS at the same time).
Unfortunately there wasn’t a great amount of money left over from my monthly cash flow to chuck into investments this month. This left me with only enough to purchase $2811 worth of Milton stock. I chose to invest in Milton Investment Corporation due to it being 3.5% under its Net Tradable Assets (NTA) at the time of purchase.
This month a whopping $52,000 went across the lawyers and trusts to fund IP1. This month finds us pouring over the build contracts and removing all the ridiculous clauses which get snuck in by the builders – such as a 20% interest rate for late payments and them deleting landscaping requirements. Although this is a pain and it feels like progress is slow, contracting this out to a project manager and specialists is the smart choice as I am a novice real estate investor. Fixing these clauses and expectations now will lead to a much smoother build and save money in the long term.
Click here to see what my Transition to retirement financial planning process looks like
Net Worth table
|Date||Net worth||Difference||Saving Rate||Notes|
|Jul 19||$578,900.00||84%||Finally began tracking this like a proper adult.|
|Aug 19||$560,100.00||-$18,800.00||78%||Share market slight correction, Ok savings.|
|Sep 19||$584,744.88||$24,644.88||72%||Share market rebound, savings rate not so good.||LINK|
|Oct 19||$600,386.00||$15,641.12||84%||Good saving this month. Normal salary, plus allowances, dividends from index funds, tax refund, eBay selling and was working abroad in asia where things are cheap.||LINK|
|Nov 19||$612,917.21||$12,531.21||76%||Falling short of my savings goal of 80%. Mostly domestic legs this month with higher costs. Also invested in hydroponics.||LINK|
|Dec 19||$625,350.00||$12,432.79||76%||Good savings of cash (for development) and investment, however higher spending due to Christmas period (Travel and Gifting).||LINK|
|Jan 20||$865,212.00||$239,862.00||55%||Super settlement was a HUGE boost to NW. $9K growth from stock market. Expensive month lots with lots of unexpected bills – weddings, travel, Booking flights, fines etc.|
Get Financial Independence!