MAY19 Net Worth $644,772 (-$1,255)

by Aussie Firebug | Jun 9, 2019 | Net Worth

A relatively quiet month this update.

The federal election has finished and I’m in the middle of a dedicated post about what the outcome means for our journey and to share a few more in-depth thoughts and opinions on how our strategy has changed from not only the result but also, more importantly, the potential changes that were being talked about.

Work has been ramping up lately and I can distinctly remember thinking last Thursday in the office as the team and I were diligently working away at 8:30 pm…

“Damn… I’m definitely not at the council anymore”

😂😂😂

But for real, the timelines for consultants are brutal. We have a deliverable due next week and it’s crazy the hours we’re putting in. It 100% helps that’s I’m getting paid more than double what I was back home but for some of the junior analysts, that’s a tough pill to swallow!

The other thing is that I know this isn’t going to be my life for the next 10-20 years. The projects are really interesting and it’s kinda cool working on different problems each contract.

We hit up Frankfurt in Germany for May to see my cousin who has moved there with his partner. This trip was predominantly to see my cuz who I haven’t caught up with in over 6 years! He’s from Canada and our parents are first cousins so I’m not sure exactly what that makes us (4th cousins?).

He actually came to Australia in 2009 to meet all his Aussie relatives (me included) and we’re around the same age so we had a lot in common. Would you believe that he arrived in Victoria on Black Saturday of all days! I remember meeting him for the first time and having to explain that these bush fires were the worst I’ve ever seen and this was not the norm.

I went to see him and his family in 2013 in Toronto and I made a promise that I’d be back at some point. We have actually decided to spend Christmas this year with that side of the family in Toronto and hopefully, we can have a white Christmas once in our lives. That would be pretty sweet.

There’s something really special about catching up with family you’ve never met before. It was my favourite part of my US/Canada trip back in 2013 and I’m really looking forward to it again at the end of this year.

Here are some shots of Frankfurt.

I can’t remember what this was called but it’s a traditional dish of some sort. There is a whole block of cheese under the pink stuff (I had no idea what I was eating half the time).

And ya just can’t go past some German beer 😋

Germany gets the 👍

The other news from May is that it was my birthday!

I have officially entered my 30’s 👴

You know how you always read about insanely young successful people who are millionaires before they turned 30? I had secretly hoped that I would join this elite group when I was still in high school. I had a lot of ambition and drive and thought I could climb the corporate ladder and be a ‘young gun’ property millionaire before the big three zero.

But priorities change right?

As silly as it sounds, I almost pity senior managers/directors and CEOs now when I once envied what they had and the power they wielded. I look at things completely different these days and instead of envy, I just think about how stressful and time poor these people must be. I couldn’t think of anything worse than running on the corporate treadmill for how long it must have taken them to reach the position they’re in now.

There are exceptions to the rule of course and I’m sure there’s some CEO out there running their own startup or something and loving life. But odds are if you showed me a ‘normal’ week in the life of a CEO I’d imagine it’s not something I’d aspire to.

Mrs. FB still has a really good chance to reach the exclusive millionaire before 30 club though. She turns 28 in December and depending on how these next few years pan out, it’s definitely possible.

Who really cares though, it’s just a number.

I honestly couldn’t be any more happy than where I’m at right now at 30!

It’s really easy to be lost in what you don’t have in a world of Social Media where all these influencers are just uploading all the good stuff and none of the bad, but man… when I sit back and think about the life we’re living I really have nothing to complain about.

I think it’s really important to have goals and it would have been cool to join one of my biggest FIRE inspirations, MMM, and reached 🔥 by 30 but as the old saying goes…

“Shoot for the moon. Even if you miss, you’ll land among the stars.”

And we’re loving the stars right now 😁

Net Worth Update

Not much to say for this month. We’re slightly down after booking some flights for our Summer trip coming up in July.

Super was down a bit with our shares basically staying the same.

Properties

No changes in the properties this month.

Property 1 was sold in August 2018

*DISCLAIMER*
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.

ETFs/LICs

Woohoo!

We made $15 bucks this month lol.

After what started out as a really good month has turned mostly red as we finished off May. This was largely due to Australian shares bouncing back from ‘priced in’ changes that were potentially going to happen at the election. I’m only guessing here, but because the other party got in, we seen those prices swing the other way and a lot of Aussie ETFs made some serious gains in May.

So whilst our Aussie shares had a great run, our international took a major hit especially from the states.

Speaking of Aussie shares…

It’s officially been over 1 year since the release of BetaShares A200.

I thought it’d be interesting to see how it went over the last 12 months and compare it to my other Aussie ETF index, Vanguards VAS.

Here were the results

I made a quick dummy portfolio (in Sharesight of course) of $100,000 in each A200 and VAS in May 2018 to see what the differences were like over the 12 months.

I’d imagine to see an almost identical return between the two funds as historically speaking, the different between ASX200 vs ASX300 has been around 10 basis points.

What’s interesting to note is the significant difference in capital gains vs dividends between the two. This was fully expected because A200 is a new fund won’t have similar dividends until it reaches a mature size in a few years. If you’re in the accumulation phase, as in you’re not yet retired and are still adding to your snowball., I think the A200 makes for a more efficient investment vs VAS because it has not yet started to generate a lot of dividends. This will change over the next few years though but right now, especially the situation we’re in (earning income in another country), this makes for a far superior tax efficient vehicle vs VAS and all of our other LICs. We’re in the middle of deciding to change our tax residency to the UK but basically if/when we do, it would mean that all dividends are taxed at the higher bracket. The ability to distribute income via the trust helps this situation but I’m aware that most people don’t have that luxury.

I’m actually surprised to see such a difference in returns in just the first year, to be honest. A200 is half the cost of VAS in terms of management fees but the 7 basis points would need a few decades of compounding to really make a difference between the two. The return difference was definitely made up by the top 200 out performing the top 300.

Will this happen in the future? I’ve got no idea.

Nevertheless, without a crystal ball, I’ll always choose the cheaper option.

Networth

APR19 Net Worth $646,027 (+$4,354)

by Aussie Firebug | May 12, 2019 | Net Worth

Mrs. FB and I were well and truly in ‘The Grind’ for roughly the last 4 years back home. We had holidays every year and plenty of social events but the routine of work, gym, nightly wind down (book/Game of Thrones/Youtube) from Mon-Fri was pretty much the same for a very long time.

When you get stuck in ‘The Grind’ it seems like days melt into weeks, weeks dissolve into months and before you know it, a year has passed without you even blinking!

When you’re out of the grind and exploring around through … it feels like you get to see and experience more in a month than you might in a year!

Which is why these monthly updates are so long these days I guess 😁

I have been contracting as a consultant for over a month now and the dynamics of the workplace have been extremely interesting to witness. Without naming names, I have landed a contract with a multinational corporation within the heart of London. I had come across the ‘corporate elite’ back home but it feels like it’s ramped up over here. Where you work and what position you have is very important in some groups. And the cost of living is so high that a lot of people who have relatively high paying jobs can’t afford much. A lot of it has to do with ‘Keeping up with Jones’, where you live, why do you have roommates? Can’t you afford a place yourself, bars you go to etc. etc.

I will say this though, the Brits know how to drink! It has been really fun working a new job and getting to know a new team.

I have been working a few days a week outside of London at the client’s site which has been a bit of a hassle but my employer pays for all transport, food and accommodation which helps. When we’re out at the client’s site, all dinners are paid for on the corporate card. Now I’ve been a public servant for the last 7 years so you could imagine my shock when they started to order alcohol 😱.

I can definitely see the appeal for working these consulting jobs though. It’s almost like a trap. Basically, everything is paid for, the money is great and you get to travel internationally if you want.

But there is a secret tax which is paid without you noticing if you’re not careful. And that is the impact these jobs have on your health and relationships. It’s so incredibly easier to eat bad and drink wine every night because one, you’re not paying for it, and two, it’s what everyone does and you don’t want to be the only one not going out with the group. And the time away from home sucks!

But I tell ya what, if you’re young without a partner/family (or if your partner is willing to relocate), this type of work can be amazing!

I’m going to try to stay in London 5 days a week for my next contract and we’re only here for a short period of time (relatively) so it’s not quite the same… part of me wants to get back to ‘The Grind’ but the new experiences have been cool so far!

Speaking of new experiences. We attending our first Rugby match in April.

Up the Quins

We also made our way down to Brighton for the long weekend and was blessed with amazing 22c weather 😂. But for real, the weather was actually good and my goodness does everyone get up and about for it. Volleyball, beach ping pong, skating down the boulevard, sunbaking, beach bars were absolutely packed!

When the sun is shining, everyone is up for a good time and the vibe was amazing.

Although I had to laugh that they called this a ‘beach’

It’s more of a rock barrier but let’s not spoil their party 😜

We are trying to stick to one country per month and somewhere in the UK too with the other two weeks off just to recharge.

Our first Euro trip was catching the Euro Star to the land of chocolate, waffles and beer… Belgium!

Even though the UK is apart of Europe… it’s not really Euro in most peoples eyes. I definitely noticed a more European vibe when we arrived in Belgium.

Sir Firebug

The options

The best waffle I’ve ever had!

Belgium beer 🙂

The cobblestone streets are just incredible. Also, I know there’s plenty of them but my God the elaborateness of the churches and the town centre is out of control.

Just staring at the detail of the craftsmanship on these buildings is mind-blowing.

This one must have had over 1,000 individually crafted statues that were nearly the size of an adult (seriously, click on it and zoom in). Can you imagine how much work went into those statues… and there’s over a 1,000 😱

There will never be buildings built like this again because most of today’s buildings are built for profit or are built with taxpayers dollars. Everything about these structures is over the top and not efficient but gee whizz they look cool.

The waffles, beer and chocolate lived up to the high standard I was expecting so no complaints there!

9/10 for would recommend!

Net Worth Update

It wasn’t much but we keep progressing with the net worth in April moving the needle by about $4K in the right direction. The big change, however, is the weightings of our overall net worth have changed significantly.

I refinanced (again) to a new lender (Macquarie) who has given us a really good rate of 3.90% for both the investment loans with an offset. But unfortunately, they wanted a lower LVR to complete the deal and so I had to throw in about $30K extra to add to the loans. I really didn’t want to have to do this but the rate was really good and I was looking at finishing things up with CBA anyway.

They also required the loan to be P&I, not IO. So whilst I don’t really want to pay down the IP’s loans, the rate difference is past the tipping point and it’s more attractive for us to get the cheaper rate vs staying IO (good job APRA).

As a result, you will notice that the pie chart for our net worth has added $30K to real estate equity and our cash holdings have dropped by the same amount.

It’s what happens when the real estate market is going through a downturn. Even though our properties are in Queensland, the major capitals (Melbourne and Sydney) have taken a hit and the banks are being extra cautious.

We will wait for the market to bounce back whenever the hell that is and then sell the IP’s as per the strategy. They are cash flowing nicely so no stress on that part.

Properties

No changes in the properties this month.

Property 1 was sold in August 2018

*DISCLAIMER*
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.

ETFs/LICs

We continue our trend of pouring money into A200 in April with another $18K added.

This is diverting from Strategy 3 where we were originally planning to buy LICs if they were trading at a discount (which they are), but I just keep coming back to regulatory changes (the franking refund being axed) that would severely impact this strategy. I’m a big believer in not speculating potential future changes but I just feel more comfortable buying the vanilla index.

There’s plenty of ways around what’s being proposed but for my sleep at night factor, the A200 just sits better.

YMMV.

Networth