Net Worth Update – June 2017

The year 2017 is now over half way completed. So it is time for another net worth checkup. If you are not familiar with net worth, the idea is to calculate how much your possessions are worth if you had to consolidate everything at current value right now. To calculate it, you take everything you own, work out how much it is worth, and add it up. You then subtract from that number anything you owe people (like home loan, car loan etc). That gives you a final number called your net worth.

It has been a very short first 6 months to the year for me. So many things I wanted to get done are sitting waiting unstated. However a few of the larger ones are starting to pickup momentum. Similarly finances has been a bit of a mixed bag. Some areas did well, others not so well. I am quite glad for my diversification this half of 2017, with some assets up and some well down.

Well, here is how we have done over the last 6 months…

Net Worth – June 2017 – $1.35m

For those not keeping track, $1.35m is up about $70,000 from the end of 2016. This puts the net worth increase smack bang in the middle of the previous 2 halves. Needless to say, I am extremely happy with that, and (once agin) slightly surprised at the amount. There is no doubt that having multiple investments/areas that can grow independently really helps, especially when some don’t do as well..

Needing only $30k to reach my goal for 2017 means that we should be able to make it. I am expecting the second half of the year to be a lot more subdued as we finally get around to painting the house and doing a kitchen renovation.

One final milestone I thought would be good to note. This marks the first time that the net worth has been over $1m USD using the exchange rates at the time. So even by US standards we have hit the million dollar mark.

Asset Distribution

Onto the graphs, and first up we have the asset distribution graph.

Once again it is all moving in the right direction. The blue line (basically the house) is making up less and less of the total net worth which is good. As this keeps going down I will be closer and closer to hitting my target. I am not sure it shows correctly, but that blue line did cross the 50% mark, now making up about 49.9% – a big milestone for me. Once again, my moving target is currently:

• 10-20% cash
• 30-50% shares (including both super and actual shares/bonds)
• 30-40% property (this will probably vary quickly as even a deposit is normally a large amount)
• 10% X-Factor investments (this area is currently not currently tracked individually , but is around 3%)

Unlike last time, the green shares and bonds got well over the 10% mark this half. The current and last half desired breakdown is below:

December 2016 Targets:

• 40% property (12% over)
• 40% equities
  • 20% super (about right, as not all is equities)
  • 20% shares & bonds (12% under)
• 20% fixed interest and cash (about right, a tad low but close enough)

June 2017 Targets:

• 40% property (9.9% over, but single digits!)
• 45% equities
  • 25% super (1% over, but starting to grow faster than expected)
  • 20% shares & bonds (8% under, but heading in the right direction)
• 15% fixed interest and cash (1% under, and dropping a bit as shares and bonds grow)

Net Worth Totals

The second graph is the one with the actual numbers and net worth (the black line). Don’t get too hung up over the details, as everything is rounded – we are thinking big picture here.

I am glad to see the blue line remaining mostly flat. Not because I don’t want my house to go up in value (using my conservative estimates), but because at the moment we are not wanting either of the other two options to happen:

1. a drop in value, which looks unlikely now, or
2. a large increase from purchasing an investment property. I still don’t believe it is the right time.

The orange super line (401k for USA people), is still on the way up, and I still am trying to max out my contributions each year. Last tax year my partners math skills allowed me to get within a few hundred dollars of the $30k limit. This is the closest I have ever got, as I am normally a few thousand away. It is also the largest I will ever get, as from now on the limit has been reduced to $25k.

Green and purple are starting to swap places as I had hoped they would. We are not in a mad rush to put money into shares and bonds and prefer to find opportunities as they come up. There were a few nice (so far) bond purchases over this half that are almost returning double what the best high interest online savings accounts do. I know it comes with more risk, but the companies are large well established ones that I believe would still be around even with a notable drop in share price and/or economic slowdown/reversal.

 

Well, I hope you enjoyed that update. Let me know how you are going in the comments below, and where you want your net worth asset distribution percentages to be?