Three big things to cover from last month.
1st. Joined Financial Forces With My Partner!
Because amazing things can happen when you team up with your best friend
We can refer to her as D-Wade eerrrr… I mean Miss Lady Bug
Aussie Firebug and Miss Lady Bug have officially joined financial forces and started to invest together. So everything you see from now on will the combined effort from both of us.
Now what does Miss Lady Bug bring to the table you may ask?
Well where to begin! I mean she is so fantastic, what doesn’t she bring? I couldn’t possibility say anything bad about her….. because she reads my blog…hi honey ?
But seriously. Miss Lady bug has only been working full time for technically 2 years (had a year off travelling) but has still managed to have saved around $27K since the start of the year with $2K in Super! With the only debt being her HECS debt of around $25K boosting our overall net worth by $4K.
To save $27K since the start of this year is an awesome effort I think.
Miss Lady Bug has always been sensible with money even before meeting me. I have always taken notice of these habits because I actually don’t think I could ever be with someone who was a complete n00b when it came to personal finances. I don’t expect everyone to be as frugal as me of course but just sensible with money is enough for me.
So $27K in less than a year is much better than the average.
2nd. Enter Exchanged Traded Funds (ETF’s)
With the influx of cash from Miss Lady Bug we had a decision to make.
Do we buy another investment property or start to look at something else?
I have been researching vanguard ETF’s for over a year now. Book after book I read about this investment strategy called index fund investing with a company called Vangaurd.
Now don’t get me wrong, I absolutely love property as an investment class, it has made me over $100K within 4 years. And I plan to continue to invest in it moving forward.
There is this little thing called diversification. Having three properties all in Australia (different states mind you) is not very diversified.
We took the plunge and invested in the stock market.
Below is our current portfolio
You can see that property makes up 56% of our wealth. I want to get this number down and spread our wealth across multiple asset classes. Which brings us to my next point…
A new player has entered the game!
That blue slice above represents the combined valued of our ETF’s.
We have invested into three ETF’s
VAS – The Australian market
VEU – The Entire world excluding the US
VTS – The US market
And just like that we have essentially bought a slice of the entire worlds economy. I’m not going to go into too much strategy here but the general idea is that for me to lose my entire capital in these ETF’s 500+ of the worlds biggest companies would have to go down the shitter.
Think Apple, GM Motors, Nestle, Commonwealth Bank, Microsoft, Nissan, Nike etc. If it happened the world would have to be basically exploding.
Below are our current splits.
We are just going to be dumping $5K lots into each one and not worry about weighting until later.
Since the stock market changes everyday, I’m also able to track it’s progress with a lot more accuracy than the properties. Here is where we are currently sitting:
As you can see, we are currently down close to $1,000 already LOL. But we are in it for the long run so it’s all good 🙂
The big bumps are where we have bought more ETF’s (around $5K each time)
Third. Property Values Drop
You know how I was bragging about making over $100K in property just before?
Yeah…well you win some you lose some.
Bad month from my valuations with 2 out 3 properties going down by a total of $20K.
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.
Oh and we also managed to save some money last month too 🙂
|Date||Rolling NetWorth||$ Change||Notes|
|Jan-12||-$32,000||$4,000||Started Full-time work late Nov|
|Jan-13||$20,000||$52,000||Built property and recieved FHOG ($21,000)|
|Jan-15||$83,254||$38,254||Bought second IP|
|$122,128||-$1,587||Paid for holiday|
|Apr-15||$125,906||$3,778||Withdrew equity from property|
|Jul-15||$159,904||$7,000||Paid 4K off HECS Debt|
|Sep-15||$170,110||$2,205||Car went out of Portfolio, Bought IP 3, Super went up and one IP went up|
|Oct-15||$171,376||$1,265||Big bills. Not much saved.|
|Nov-15||$173,263||$1,887||Super went down slightly|
|Dec-15||$186,910||$13,648||IP went up in value|
|Jan-16||$187,910||$1,000||Some big bills|
|Mar-16||$191,410||$1,500||Didn’t save very well|
|May-16||$182,410||-$11,000||Two IP’s went down.|
|Jun-16||$211,010||$28,600||All 3 IP’s went up and super was updated|
|Jul-16||$229,010||$18,000||IP’s revalued with 2 out of three going up|
|Aug-16||$233,653||$4,643||Super went up along with cash|
|Sep-16||$237,390||$3,737||Super went up, HECC debt went down plus savings|
|Oct-16||$222,832.69||-$14,558||Joined finances with partner, bought ETF’s, IP’s went down|