Aussie Firebug

Financial Independence Retire Early

JUL19 Net Worth $704,892 (+$14,873)

JUL19 Net Worth $704,892 (+$14,873)

Before I get into the monthly update, I want to highlight that Ask Firebug Fridays is officially back (with the latest episode airing the last week) and will be dropping new episodes on the last Friday of each month.

Publishing every week was too hard to do because our lifestyle has changed so much, committing to a monthly episode is more achievable.

Also, I hate spamming you guys with unnecessary emails which is why I only send you certain content that you’re interested in. If you want to get these AFF emails on the last Friday of each month please subscribe using the box below.

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We have officially started our Summer Euro trip! Mrs FB and I have embarked on a two-month adventure around Europe and the Middle East.

We have sublet our apartment in London and with Mrs FB being on school holidays and the beauty of contract work, I can take off as much time as I need. I won’t get paid of course but the whole point of packing up shop and moving to another country was to see as much stuff as humanly possible. It is hard passing up £20,000 pounds (or ~$35K AUD) for the next two months but we’re in our YOLO phase right now so the race to FIRE will just have to wait 😝.

We first hit up South West England stopping off to such places like Bath, the Cotswolds, Oxford, St Ives and some others too.

Here are some shots.

Some rocks

Ancient Roman baths that are around 2000 years old!

St Michael’s Mount- Epic castle with stunning views at the top

England’s countryside is absolutely gorgeous and I really liked the architecture and style of the buildings. It was good to do it in summer though, I couldn’t really imagine it would be that enjoyable when it’s raining.

Frugal tip: If you want to go to Stonehenge, there’s a way to see it for free and save around £25 pounds (~$49 AUD). Go to this spot https://goo.gl/maps/cKTR7KeNcx8QAv2Q7 and hang a left to drive or walk all the way up to Stonehenge using this path.

You stand about 10 meters further away than the official tour group path but it doesn’t make a real difference unless you really want to stand a bit closer.

 

Our next stop and where I’m currently finishing up this post actually is Spain.

We visited Madrid and are currently in Calpe with Barcelona being our next stop tomorrow.

We have loved the tapas, weather, culture and history that Spain offers. Here are some shots:

Calpe resort. Only $95 AUD per person a night

Madrid Cathedral

Sunset in Madrid

Something very special happened in Spain too…

I’ve been planning this for a while and have probably have dragged my feet a bit (it’s been nearly 9 years)…

I asked Mrs FB to marry me and she said YES 💍🎉!!!

I couldn’t be any happier and it’s the perfect way to start our Euro summer trip. Now we just have to plan the wedding 😁💸

Net Worth Update

We have broken the $700K mark!

The ASX has been on a RAMPAGE lately. We saw an all-time high in July and with the cash rate looking to be cut again, who knows where it will end up by years end.

We have had a great month even though I didn’t actually get paid in the month of July. I have two big contractor paychecks coming in over the next two months. One was meant to be paid in July but there was an issue with it (long story) so it wasn’t approved until the middle of June. I think I’ll get it any day now but it means the August update might have a big bump.

I still owe a heap of tax both in the UK and in Australia so I’m expecting to be down thousands very soon.

Extremely happy with how things are travelling along though, especially since we are on holidays.

You really don’t have to spend a lot when you travel as I’ve discovered this year. So many people just go crazy and feel they need to spend up big to fully enjoy themselves. Eating out at restaurants every day/night is one of the biggest spending traps. There nothing wrong with taking a packed lunch and cooking at your Air BnB or hotel. Eating out once or twice is great for sure, especially to enjoy the local cuisine but goddam you spend a lot if you do it every day!

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

 

Holy Mackrel!

Over three per cent return in just one month including over $2K worth of dividends 😱

The share portfolio is inching closer and closer to providing us with the income upon which we will live off once we hit FIRE. It’s so exciting to watch the dividends grow each quarter which is what investing IMO should be. Building that snowball up every day until it reaches critical mass.

The investment nerd side of me could stare at that graph for hours!

Networth

 

Ask Firebug Fridays 19

Ask Firebug Fridays 19

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.

 

 

Question (5:14)


Hello,

I saw this article pop up recently (link) from the co-author of Your Money or Your Life (a great read) and was wondering what your thoughts on this are.

Have you considered or planned on finding ways to give back to your community once you achieve the RE part of FIRE?

What would some of these ways be if you did?

I know a lot of people talk about RE to have the time to spend on hobbies and family, but it’s a rare thing to hear about giving our time to those around us and I think it’d be great to start that conversation in the FI community.

-Jackson

Firebug’s Answer


Hi Jackson,

Please excuse my tardiness with this reply being over 7 months old.

Your email made it into the ‘interesting questions’ folder in my Aussie Firebug inbox. I love all the questions I receive but often I will get the same question over and over again and I know the listeners out there won’t want to hear my opinions on them repeated.

With that said, the article you linked to was great and Vicki Robins has once again, articulated what many of the FIRE crowd will most likely end up doing.

FIRE sometimes gets a bad rep. It can be perceived to be selfish because there’s so much focus on building wealth that a few link this to greed. But from every single person I’ve personally spoken to and most I’ve messaged online, this couldn’t be further from the truth.

FIRE chasers are some of the most generous, environmentally conscious, selfless people going around and the majority give back from my experience.

I do have plans on giving back for sure!

In fact, I’m already creating content that thousands of people read/watch/listen to every month so in a way, I’ve already started. Now you could, of course, say that I’m receiving a financial incentive to keep this site running with my sponsorships and affiliates which would be a fair call. But I didn’t start this site with the intention to monetize it, it’s been an unexpected benefit for sure but I just absolutely love talking about FIRE from an Aussie perspective and would have continued to do so with or without the bonus income.

I have some big plans when I hit FIRE and come back to Oz, to really engage with the community more. I’ve spoken to the big guns at the premiere of Playing With FIRE and all the camps, financial conventions, group meetups sound like an absolute blast. I want to get involved in this and dedicate some of my time to get some stuff up and running.

Travelling around and teaching people about FIRE would be the ultimate ‘giving back’ activity for me. It’s such a natural progression too. I don’t really think I can call myself a master of anything except for when I hit FIRE. I’m pretty confident that after around ~10 years of talking the talk and walking the walk people are going to have faith that this dude know what he’s talking about when it comes to reaching FIRE in Australia. This blog is a testament to what can be achieved through discipline, delayed gratification and a touch of common sense investing.

I would also like to donate my time to various groups within my local community that are in desperate need of volunteers.

I would love to know what others are planning to do too. Please let me know in the comment section.

-AFB

 

Question (16:52)


Hi Firebug,

Love the site and podcast. I am wondering if it concerns you how popular passive investing is becoming and the impact of large amounts of money flowing into companies somewhat blindly?

Bec

Firebug’s Answer


Hi Bec,

This is a great question and one I’ve often thought about too. The thing is, there’s really no such thing as an ETF bubble. ETFs are tools, not catalysts.

They are a vehicle to give investors access to certain securities and sectors.

I guess it does depend on your definition of the word bubble in the context of investing and maybe the semantics of it.

Blaming a stock bubble on ETFs would be like blaming the invention of smartphones for Instagram, MP3s for Nickleback, or Television for the absolute abomination that was season 8 of Game Of Thrones (how could Dani not possibly see the ships from above???)

ETF just provide a different way to access something that was already there.

Nearly 100% of the time I have read about someone blaming ETFs for supposedly causing a bubble has come from a fund manager or someone who makes money from the belief that it’s better to be an active investor vs passive which has been proven time and time again to be a fallacy for the majority of investors.

The issue is that there’s a bloody ETF for everything these days including very bubble-like assets (think bitcoin). This gives the impression that it’s the ETFs themselves causing the bubble-like mania. But it’s never the vehicle that’s the bubble, it’s always the asset class.

You could argue that ETFs provide easier access to these bubble assets classes and help them grow. That would be a fair call. But you’d have to be pretty thick to invest in something just because it’s an ETF. I’d like to think the majority of investors look at the underlying assets they’re investing in before buying. And if the underlying assets are good, I don’t really see an issue with how ETFs make them available for us the investors to buy.

-AFB

Question (21:00)


Hi Aussie Firebug,

Thanks for the blog and podcast.

Like you, we plan on transitioning from shares and real estate to all shares, EFT & LIC.

To simplify things and increase income generation. We had planned on using one of the self listing options when selling our investment properties to avoid the agent’s fees, so we were interested to hear that you had done this with the sales of IP1.

Can you give us some details of the process and lessons learned? Will you do it again for IP2 and IP3?

– Bradley

Firebug’s Answer


Hi Bradley,

I’m glad you’re enjoying the content mate 😊

The company I used was called property now and I estimated that I saved around $15k by selling the property myself.

I got quoted something like 2.5% plus advertising fees which would have worked out to over $15k to sell IP1.

But I’m frugal AF so there ain’t no way I’m paying that much when there are tools available to do it yourself. I could save a heap of money and learn new life skills such as negotiating which I’ve always wanted to have a crack at.

Win-win.

You always are going to some people saying…

You should always let a professional handle stuff like that. It’s part of the cost of investing in property and they will be able to get a much higher price for you vs if you do it yourself.

I don’t subscribe to that line of thinking at all.

I would never pay that sort of money for a potentially higher selling price an agent could get me vs a guaranteed savings of ~$15k. There are other benefits that come with paying an agent which I’ll get into later but just know that no one will ever care about your house as much as you and this isn’t rocket science.

Sometimes I think people feel like you need a PhD in selling houses to list a property. They’re scared they’re ganna stuff something up but the reality is that’s it’s actually pretty straight forward and simple.

It’s a bit of work, there’s no getting around that. But like I’ve always said with property as an investment class, there are a lot more problems to be solved yourself vs shares which can be a good or bad thing depending on the type of investor you are.

The hardest part is knowing how much your property is worth. I used a subscription-based site called Price Finder to work out how much similar properties around the area were selling for. I have a family member who is a real estate agent so I was able to access her account for free which was nice.

That tool has an incredible map feature where you can select your house and set an area around it and it returns similar properties with how much they sold for. It even lets you specify things like the number of rooms/bathrooms/garage spots etc. I don’t know how they source their data but it’s pretty incredible that people can access it. Researching IP1 was easy for me because it was in a cookie-cutter estate where the houses are essentially the same.

Once you have your ballpark figure, photos of the property and some copywriting you’re ready to list it.

I wasn’t aware but you have to have a licence to list on the various websites like realestate.com and domain. Using a service like I did with Property Now lets everyone list for a fraction of the price.

Because let’s be honest. Does anyone go anywhere but the internet when they’re trying to buy a home these days? It’s not like real estate agents are useless. It’s just that technology has created tools that make selling a property fair more efficient than it use to be.

Think about it.

It wasn’t too long ago that real estate agents were the go-to people when you wanted to buy and sell a property. This makes sense too. They had built decades are trust with that area and simply had too many relationships and connections that you’d be mad to try to advertise yourself. They knew exactly all the avenues to go down and probably had deals with the newspapers etc. to ensure that all bases were covered.

I would have paid for that experience and connections if modern-day tools weren’t available.

But they are.

And IMO the fee structure for real estate agents have not caught up to 2019 and as more and more people start selling homes themselves, people will start to realise that it’s actually not that scary and I predict that it will become a lot more ‘normal’ in the years to come.

The process for selling a property yourself is as follows

  • Be prepared before you list online. Have you ball-park figure, photos, copywriting and conveyancer all sorted.
  • List on all the major sites (usually comes with a package)
  • Host an open day the first weekend it becomes listed
  • Sell when you find a buyer
  • Nearly all the companies that provide this sort of service have a really good cheat sheet in case I missed anything but that’s the gist of it.

There are a few things I would do differently if I had my time again though.

  • Pay the extra money to have your property featured as a ‘premium listing’. It’s the most expensive option (around $1,000 from memory) but it pales in comparison to what the agents charge you and it’s supercritical in a high demand area like I found out with my property.You ideally want to have the house sold within the first 2-3 weeks. Paying for the premium listing means your property jumps to the front of the search results for your area. It’s similar to having your webpage ranked high in Google.It can be the difference between you getting swamped with calls or having no one show up to your open day.
  • Know your ‘number’ before you list and stick to it! I actually had an offer that was over my reserve and more than what I eventually ended up selling it for within the first 3 days.Like a classic greedy idiot, I decided to wait a bit because my phone was blowing up and I had a lot of interest on the open day. Well a week later I had all my offers and that first one was still the best. I went to ring the party and what do you know, they had their offer accepted for another house.Lesson learned.I should have drawn up the contract ASAP when someone offered me some at or above what I was willing to sell for. Trust me, you start to play the ‘what if’ game when your property gets a lot of interest. But the hottest time for your property will always be the first week or two. After that, it fades… a lot. I had to wait another 4 weeks until I found another offer and your minds starts to play tricks on you once the buzz from the first weeks dies down.
  • Really put in the work in the first two-three weeks. Open houses every weekend. You don’t want your property to still be sitting there after a month. It can be viewed as stale and what a lot of people do is pay the package again to have it ‘relisted’ so it jumped back to the top of the search.Don’t be in this boat.Make sure your ‘number’ is reasonable and within the range that houses similar to yours are selling for. Shake the hand of the first person that offers your ‘number’ or higher and be done with it.
  • This one is so controversial but it has to be said.Underquoting.This is when people list a property at a price that they have absolutely no intention of selling it for.Why do they do this?

    To attract a lot of attention and hope someone falls in love with the place I guess.

    I’m pretty sure it’s meant to be illegal but everyone does it. I made the stupid mistake of actually listing my asking price and still to this day I think my attendance rates suffered because of it. I was watching the sales of similar property around the corner from mine selling around my asking price, being listed $40k-$50k cheaper than mine.

    The most depressing this is that the buyers expect this to happen and I even had one bloke stumble across my open day and asked me what my reserve was. I said it’s what it’s listed at mate but he insisted that he actually wanted to know the real price. I told him again that it what it’s advertised at. He said that he had family who were looking to buy in the area and didn’t bother coming to my property because it was listed so much higher than the others.

    🙃🔫

I really enjoyed the lessons learned from selling IP myself. I will definitely be doing it again in the future where it makes sense.

I will use an agent if it needs to be done. Like right now, it wouldn’t make sense for me to fly back to Australia to host a few open days for IP2 and IP3. The commission fees are going to be a lot lower for those properties because they aren’t worth as much as IP1 was too.

They aren’t listed yet but the lending market is on the upswing and I’m watching that space very carefully.

Another thing I want to mention is that you really need to be the right person to sell a property yourself. You need confidence, especially when it comes to negotiating. I wish I could say everyone has this because it’s such a valuable life skill when it comes to a whole bunch of stuff.

But if you’re the sort of person that gets anxiety thinking about asking for a raise, bartering with the locals in Bali or trying to wheel and deal the best combo of Shinies you can score for your ultra-rare Charizard then maybe it’s worth paying for someone else to do it.

And that about sums it up Bradley.

Agents have their place and can be useful for sure, I may even end up using one out of convenience sake. But the internet has open up doors that were not there previously and you can definitely save a lot of money doing it yourself.

We’re the FIRE crowd after all. We thrive on the challenge of doing it ourselves amairight?

Hope that helps.

-AFB

JUN19 Net Worth $690,019 (+$45,247)

JUN19 Net Worth $690,019 (+$45,247)

Such an incredibly busy month June turned out to be and the next few months coming up are gonna be even busier!

This update is two weeks late because I’ve honestly just not had the time to sit down and put it together. I’ve been juggling work, traveling, tax admin work for five different things (personal return, trust return, Aussie Firebug return for the money made through this site and my UK company returns which also includes a personal one), organizing our big Euro summer trip which starts next week and enjoying our new city 😅

So if you’ve sent me an email during the last 3-6 months please known I’m not ignoring you and that I’ll eventually get around to replying to you when I get a minute!

With that said…

A few biggish things happened in June.

I officially quit my job back in Australia!

I didn’t quit back in January when I left on this trip because I always felt like it was unnecessary. I had long service leave and I knew there was a very good chance of them giving me 12 months off with some unpaid leave.

I was hedging my bets against the very real possibility that we wouldn’t like it over here and wanted to move back. Some of our friends went through a very similar experience where they moved to London and it wasn’t what they imagined so they came home.

But the funny thing is that having that job to come home to was a bit of a mental blocker for me and our future plans. We’re well on track that working for money will become optional within a few years and as good as the job was, it’s not where my passions lie and I’d like to try something new when I get back to Australia.

Even just a wondering thought about the possibilities for next year was often met with the anxiety of knowing I’d have to return to my job.

But the beauty of FIRE is that it gives you options and you no longer have to make every decision based around money. Money works for you, not that other way around!

I thought long and hard about it and concluded that ultimately the job was holding me back from doing exactly what I wanted to do.

Resigning from a perfectly good job in my home town that may not come up for grabs again for a decade (low job opportunities for my line of work in the country) sounds insane to most people (including my mum).

But I knew I’d made the right decision straight after calling my boss as I was hit with the ultimate wave of freedom, excitement, and nervousness.

It’s extremely liberating not knowing what the future holds. Playing it safe can be boring sometimes and we’ve been playing it safe for as long as I can remember. Time to get adventurous for a while 😎

So these monthly updates have now turned into a part-time travel blog of late haha.

And keeping up with that tradition, we traveled to the land of the Scots in June. Here are some of the places we visited.

Yes. That’s Haggis flavored chips. Delightful too I might add

Arthur’s Seat

Edinburgh was absolutely amazing with breathtaking scenery and the city is stunning! I don’t have the photos to do it justice but it just feels so badass walking around it. Very old and has a great grunge feel to it.

I was sort of expecting London to feel how Edinburgh felt. But London to me is a very new modern city, I believe this is partly because of the big fire that burnt down half the city in 1666 so maybe the streets don’t feel so old but Endinborught just had that old school vibe that made it special.

We also hit up Glasgow but I can’t say it was that special especially considering we just came from Edinburgh (the Glasgow locals would kill someone for saying that lol).

It was a short trip but we loved Scotland and will be back!

Net Worth Update

Huge month for the old NW which can mainly be contributed to three big factors.

The first is that I received all my entitlements (basically the rest of my leave that was owed) when I quit my job which turned out to be around $10k.

The second was that the markets had a very good month bringing it around $8k.

And lastly, I received my first full month contracting paycheck 🤑. Would you believe that it took almost 2 months to be paid at my current contract because there was a bit of a process with the payroll system and getting me on it?

The other thing that cannot be overstated was how much expenses I was reimbursed with that paycheck. I’ve been paying for all my work expenses like accommodation at the client site, meals, travel, etc. the entire time which amounted to close £2.5K. So my invoice had my rate PLUS all the stuff which turned it into quite a decent amount of cashola that hit the account.

I currently owe a heap of tax though (which is paid quarterly in the UK I believe) so it’s not as much as it seems… But still, it was a nice bump to hit the account.

It still tripped me out that I didn’t get paid for almost two months and had to pay for everything during that time. I mean, we had the spare cash thankfully, but not everyone could have done that. If you’re thinking about doing contract work make sure you have AT LEAST 6 months of living expenses.

Bring on $700K 👊

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

And the Aussie Bull run continues!

I have no idea what the future holds, but I do find it interesting that nearly every single economist/part-time financial guru out there was calling the next recession back in December. I thought it was heading that was for sure as well!

But as we have learned time and time again. No one knows what’s around the corner and I have found it to be extremely relaxing just sticking to our routine of investing once a month and not caring what the markets are doing. I’ve been so busy that I haven’t really had a chance and it’s and it’s something I think less and less about anyways these days.

Networth

 

Podcast – Playing With FIRE London Premiere

Podcast – Playing With FIRE London Premiere

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Summary

In today’s episode, I’m speaking with two other Aussie’s (Tom and Ricky) who were with me at the premiere of the FIRE documentary ‘Playing with FIRE’ which follows 35 year old Scott Rickens, his wife Taylor, and their toddler Jovi as they embark on a year-long odyssey to understand the rules of this sub-culture and test their willingness to reject the standard narrative of adult life.

I want to congratulate Travis and the whole team who was involved in the creation of Playing with FIRE. The film is fantastic and I would recommend it to anyone as it’s a super interesting documentary starring so many of our favourite FIRE bloggers and was surprisingly very funny as well.

Some of the topics we cover today include:

  • The events that lead up to the Premiere
  • Our initial thoughts after watching the film
  • Things we liked and things we wanted to see more of in the documentary
  • Talked about how hard it must have been to fit an entire concept like FIRE within 90 minutes
  • The Q&A session after the film

And pretty much everything else we ended up talking about!

Show Notes

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

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

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

 

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