Tax Christmas arrived at the Firebug household in July.
Saint Nick delivered 3 parcels of joy and one lump of coal.
Mrs. Firebug got a sweet tax return and paid off around $3K worth of HECS debt (bringing her loan to ~$22K)
I paid off my last installment of HECS ever!
Officially HECS free and getting around $250 extra per fortnight.
I had around $11K for my HECS debt so with that cleared, it has essentially added $11K to my net worth this month.
And the one lump of coal was me actually owing the ATO some money. Can you believe that!
Even after all my management fees, maintenance costs, rates, water bill, insurance, depreciation reports and the banks upping investor loan interest rates. I still managed to earn too much from my IP to negative gear.
I guess I should be happy. Paying tax is a sign that your investment is profitable. I just wanted a refund god dam it! ?
The end of July marks 1 year that I have joined finances with Mrs. Firebug.
But the cool thing about tracking every single dollar we spend is now we have a baseline. Where as last year we were sort of flying blind because I had no idea how much she spent and vice versa.
Every month I’m comparing how we did the previous year. It also makes big ticket items like rego, insurance ect. easier to plan for because I can look back at the same month last year and see where our money went.
Really looking forward to the next 12 months to see how much we can improve.
Net Worth Update
Cleared about $15K worth of HECS debt between both of us which was the major bump in this month’s net worth. Super, savings, and a little ETF increase also helped.
No change in any of the properties for this month.
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 had a little bump.
comparing vts to vas , do you need to do anything additional for vts administratively?
in terms of tax forms, or managing that ETF , because it is a foreign etf?
I have finished my personal return but not my Trust’s return. I hold all my ETFs in my trust so I have not finished it yet.
I’m booked in to the account as I have some complicated tax issues to figure out from last F/Y that’s a bit tricker to do in a trust than it is for a person hence why I’m paying an accountant.
I’ll probably do an entire post about how to lodge a tax return with the three ETFs after I have been to the accountant.
But from what I currently understand. You would have filled out the W-8ben form (I think that’s what it’s called) when you first purchased VTS. This form is to stop double taxation from occurring. When you are paid a dividend from VTS you will have already paid the US 15% in tax. So when you lodge your return to the ATO, they know that you have already paid some tax and adjust accordingly.
The information you need can be downloaded from computershare.com.au.
As I said, once I lodge it I will most likely do a post to help others.
Thanks that is helpful : )
Just wondering, why have you been so keen to pay off your HECS early?
I mean, I did the same thing myself so we’re probably on the same page, but I’m sure I don’t have to explain to you that it’s one of the cheapest loans you can ever get. I liked the idea of having that extra $300 per fortnight in my pay packet so I killed off the debt with a chunk of savings.
To play devil’s advocate, that chunk of money could have bought more ETF units while your loan only increases with the index.
Completely agree. Don’t understand your rationale at all. It’s debt that accumulates at the rate of inflation at a couple of %. Bank shares provide over 6% dividends + franking credits.
I didn’t pay it off early.
I’d have HECS forever if I could. I completely agree with you. It’s the best loan you’ll ever have.
It took me 6 years to pay off around $25K which is standard from what I’ve read.
I had $11K as a debt in my net worth sheet but thinking about it, that figure must have been wrong because $11K is a lot to pay off in one financial year.
Was a solid movement in your ETFs this month -$87k to $94k. How much of that was a contribution from you? Out of interest how much do you intend to put into ETFs going forward?
Enjoy reading your blog – thanks 🙂
We bought $7K worth of ETFs last month. So that leap was almost purely our own money going into them. They went up by just over $100 bucks or something in July.
We originally had the plan to get to $100K in ETFs and then reassess. We are nearly there now and although we haven’t officially had the sit-down talk about it. We are loving the passive investing style that ETFs offer so I’d say we are most likely going to keep plowing our $$$ into them for the foreseeable future. Unless something crazy happens like a property correction and there are deals too good to pass up in that space, I don’t see us changing anytime soon.
Thanks for the kind words too 🙂
Damn you better slow it down a bit mate, making everyone else look bad! Hahah you’ll be hitting a million pretty soon at this pace 🙂
Keep up the good work mate
Thanks mate 🙂
Doing very well. Interesting to see just how much faster you will move from 300-400k than 200-300. I recently just hit the $1m with my wife and that took us the better party of 10 years.
It will be very interesting indeed.
Congrats on reaching the 1M mark!
Can you talk a bit about the amount of Cash Deposits you have? I’d be keen to know where you hold it, and how you decided on that percentage of total portfolio. It seems like a lot to me!
Keep up the good work.
We keep 100% of our emergency fund in an offset account against our IPs which is currently returning around 4.5% on average.
Our cash holdings are a little high at the moment because of an insurance claim that happened late last year. I’ll have a post about the details soon but we came into quite a bit of money but may need to be spending it again soon hence why it’s just sitting there. We usually keep around $30K liquid cash in the offset.
Hi, just wondering, is your net worth joint with your partner, or is that your individual net worth?
From Oct-16 all net worth posts have been a combined net worth of my partner and I.
Before that it was just mine.
You can check out the post when we joined finances here https://www.aussiefirebug.com/october-2016-net-worth-222832-14558/