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Net Worth Update October 2007

November 4th, 2007 at 03:07 am

My net worth as at 31 October decreased by -$3,590 (-0.31%) during the month to $1,158,905 (AUD), largely due to a decline in the estimated valuation of our real estate assets. The real estate valuations bounce around from month to month, affected by what mix of houses were sold during the month, so it's only the long-term trend that matters. The balance of my half of the mortgage increased by another -$929 to -$363,063 as we continue to redraw some of our advance payments to cover the interest payments while DW is working part-time (until DS2 starts school in a couple of years). My leveraged stock portfolios increased by a net $2,816 (0.68%) to $416,955, but would have been around $5,000 (1.2%) higher except that my large block of IPE shares went ex dividend on Wednesday. My retirement account increased by $2,785 (0.85%) to $332,322. This figure is also a bit understated (by around $4,000) due to a delay in the processing of my employer's contribution for the month of August.

Copyright Enough Wealth 2007

Calculating the Decline in Net Worth from "All Time High"

August 7th, 2007 at 05:05 am

I normally update the component figures (stock portfolio, retirement account) of my investments daily, but only calculate month-to-month changes in my net worth. Having had a couple of down months in a row I was interested in calculating where my net worth is in relation to my personal "All Time High" (reached on 20th June). I track my investments using an excel spreadsheet, so to calculate the current situation in relation to the "peak" value I need to know both the maximum value in a column of data (easy using the "MAX()" function) and the latest value in the column. The second figure isn't quite as easy to automatically calculate - there's no simple function (you might expect "LAST()" to do this, but no such luck), so you need to use a fairly complex function:
=INDEX(B3:B6500,MATCH(9.99999999999999E+307,B3:B6500))
This for numeric data in column B, where the data is in rows 3 to 6500. For example, today's data is in row 1408 and my spreadsheet is currently setup with dates out to my expected retirement in 2027 (row 6500).

To check how the current value compares to my "All time high" value I calculate:
=INDEX(B3:B6500,MATCH(9.99999999999999E+307,B3:B6500))/MAX(B3:B6500)

Using this calculation in my various spreadsheet tabs (one for each portfolio component) shows that my current situation is:
Current Property Equity = 98.23% of all time high
Current Retirement Account value = 94.84% of all time high
Current Stock Portfolio value = 88.85% of all time high

Overall, current net worth = 93.87% of all time high

Although I'm fairly sanguine about recent drops in the stock market and the post-boom slump in real estate prices (they've been stagnant in Sydney for the past 4 years, and the prospect of further interest rate rises means the recent mild recovery is likely to come to an end), it highlights the fact that I really haven't suffered a major decline in my net worth. Even back in '87 when I only had a tiny investment portfolio, mainly invested in stocks, the "crash" only wiped about 25% off my net worth at that time (I also had a "defined benefit" retirement plan which wasn't affected and I didn't count in my net worth calculations - just as well as my employer converted the plan to a defined-contribution scheme prior to laying off a large chunk of the workforce in the late 90's).

It makes me wonder how well I'd cope with a total melt-down across all asset classes (such as happened in the great depression). What if my stock portfolio was down to only 10%-20% of it's peak value, property was unsaleable (and valuations down 50%), and I lost my job? Hopefully the decline would be gradual enough to have some chance to unwind my geared positions - selling off shares to eliminate my margin loans and selling our investment property in time to pay off our home loan with whatever equity remained. The tricky part would to know when to "pull the plug" on debts. The temptation would be to first view a decline in asset values as a correction (10-15% down), and then as a bear market/housing slump if the decline extended to a 20-40% drop over many months or years. In such cases selling out would be the wrong move, while holding your position (or even buying more at the "bottom") would be a good long-term move. But, if such a recession turned into a full-blown depression then a buy-and-hold mentality could easily lead to bankruptcy.

One can only hope that the world's central banks know enough to avoid a global depression, just as one hope's there won't ever be another "world war" and that global climate change doesn't need to be factored in to personal financial plans! In the absolute worst case my "Plan B" is to move the family up to my parent's farm - they have a spare shed we could live in, a rainwater tank and bore water, so we could grow our own food. This is also the "plan" in case of WWWIII, SARS or bird 'flu Wink

Net Worth Update July 2007

August 1st, 2007 at 07:13 am

My net worth as at 31 July dropped by $23,420 during the month to $1,126,770 (AUD), due to a perfect storm of asset classes all declining simultaneously (so much for non-correlated asset classes). My leveraged stock portfolios decreased by a net -1.39% last month due to the overall weakness in the stock market. Whilst the estimated valuations for my share of our home and investment property also decreased slightly by -0.85%. The valuation of my retirement account decreased quite significanlty during July (-3.23%) as there were declines in both domestic and international stock funds, listed property funds and bond funds.

Given today's large drop in the Australian stock market I don't expect this month to turn out to be a net positive either...

Copyright Enough Wealth 2007

Net Worth - PF Bloggers Progress for June

July 10th, 2007 at 08:46 am

Here's the latest round-up on how the various PF (Personal Finance) bloggers who post their Net Worth each month are progressing.

Net Worth Update June 2007

July 9th, 2007 at 06:29 am

My net worth as at 30 June dropped by $12,554 during the month to $1,149,990 (AUD), largely due to 12 months prepayment of $13,425 interest on one of my margin loan accounts. My leveraged stock portfolios decreased by a net -2.80% last month due to the overall weakness in the stock market. Whilst the estimated valuations for my share of our home and investment property increased slightly I decided to retain the previous month's valuation as I have indicative figures for the next month showing that this was just a temporary blip in average sale price for our suburb, and prices will have reverted to the previous level by next month. The overall property equity decreased slightly due to our mortgage loan balances increasing fractionally (by 0.03%) due to our monthly redraw of $2,000. The valuation of my retirement account also decreased slightly during June (-0.24%) as it is largely invested in domestic and international stock funds.

Copyright Enough Wealth 2007

Net Worth - PF Bloggers progress for MAY '07

June 9th, 2007 at 03:55 am

Here's the latest round-up on how the various PF (Personal Finance) bloggers who post their Net Worth each month are progressing.

Net Worth Up $46,415 in May

June 1st, 2007 at 02:41 am

My Networth as at 31 May totalled $1,162,544 (AUD), an impressive overall increase of $46,415 (4.16%) for the month. My leveraged stock portfolios increased by a net 4.06% last month, and the estimated valuations for my share of our home and investment property increased 3.91% compared to the previous month, showing an acceleration of the mild uptrend that began earlier this year. The property gains were slightly offset by our mortgage loan balances increasing by a net $1,082 (0.32%) due to our monthly redraw of $3,500. Although we'll continue redrawing some of our advance mortgage payments each month to help meet our mortgage repayments after DW returns to work part-time, the amount required will reduce to only $1,000 per month. The valuation of my retirement account went up only slightly during May (0.72%).

So far this year my Net Worth has gone up by $129,761, which is 92.68% of my goal for the entire year! It's a pity that this rate of increase is unsustainable. At the current exchange rate of 0.828 USD to the AUD, my Net Worth is US$962,587 - so my milestone is to pass the one million mark in US dollars. If both the AUD and Sydney property prices keep rising, I may reach this in the next month or two.

Enough Wealth

Net Worth - PF Bloggers progress for APR '07

May 6th, 2007 at 07:07 am

Here's the latest round-up on how the various PF (Personal Finance) bloggers who post their Net Worth each month are progressing.

Monthly Net Worth of PF Bloggers for APR 2007:

Blogger Age Net Worth $ Change % Change
An English Major's Money 2x $14,275.00 $818.00 N/A
Blogging Away Debt 2x -$34,651.00 -$860.00 -2.6%
Blunt Money 2x $226,157.72 -$9,530.38 -4.0%
Consumerism Commentary 30 $90,495.55 $2,128.60 2.4%
Crazy Money 27 $261,669.00 $13,583.00 5.5%
Enough Wealth 45 $1,116,129.00 $45,141.00 4.2%
Financial ladder xx $152,414.85 $294.00 0.2%
Finance Journey 25 $164,531.00 $10,643.00 6.9%
It's Just Money 32 $167,715.62 $3,807.60 2.3%
Lazy Man and Money 2x $176,700.00 $7,691.00 6.9%
Make love, not debt 2x -$59,903.97 $1,060.45 N/A
Mapgirl 3x no Apr data no Apr data N/A
Moomin Valley 4x $426,078.00 $8,883.00 2.1%
Money Blog Site 25 no Apr data no Apr data N/A
My Money Blog 28 $133,672.00 $7,147.00 5.6%
My Open Wallet 37 $335,541.00 $8,500.00 2.6%
Savvy Saver 27 $198,001.00 $3,962.00 2.0%
Seeking Wealth xx $27,026.71 $6,937.08 N/A
Tired But Happy 30 $171,122.00 $25,830.00 17.8%

nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

If you have any corrections, let me know asap after the post and I'll edit immediately. If it's more than a few days after the post, email me and I'll make the change the following month.

Enough Wealth

Net Worth Up $45,141 in April

May 1st, 2007 at 03:15 am

My Networth as at 30 April totalled $1,116,129 (AUD), an impressive overall increase of $45,141 (4.21%) for the month. My stock leveraged stock portfolios increased by a net 5.10% during April, and the estimated valuations for my share of our home and investment property increased 2.10% compared to last month, continuing the mild uptrend that began last month. The property gains were slightly offset by our mortgage loan balances increasing by a net $1,082 (0.30%) due to our monthly redraw of $3,500. We're continue redrawing some of our advance mortgage payments each month to help meet our mortgage repayments while DW is on maternity leave for another two months. Unlike last month's big drop in the valuation of my retirement account, this month my retirement account balance went back up $10,919 (3.37%).

So far this year my Net Worth has gone up by $83,346 (8.07%), which is 59.53% of my goal for the entire year.

Enough Wealth

Real Estate Appears to be Picking Up

April 24th, 2007 at 05:56 am

Owning our own home plus an investment rental property (albeit with large mortgages) means that my net worth is dependent in large part to the vagaries of the Sydney property market. The latest average house prices for the adjacent suburbs where our home and investment property are located shows considerably higher averages prices for house sales than were reported for the previous month:



Combined with the recent strength in the Australian stock market it looks like this month will give a boost to my net worth. Hopefully todays CPI figures will mean the interest rate on our mortgages doesn't increase again (our house is a variable rate loan, and the rental property is a 5-year fixed rate loan, with four years left to run). It may also help breath some life back into the property market - new house construction is running below the required rate to meet increased housing demand, which is starting to make rents increase. Any confidence that interest rates have now peaked will encourage both investors and home buyers back into the market, which should form the basis for the next increase in house prices in Sydney. Housing in Sydney tends to run in a 7-10 year cycle, and it's now been almost three years since the last peak in house prices.

Of the three goals I set at the start of this year (see side bar), my Net Worth and US Stock Portfolio goals are on track, but unfortunately my goal of getting down to my ideal weight by 30 June is not progressing as well as I'd planned.

In some ways diet and saving plans are similar - you pick your ideal behaviour and make an effort to stick to it until it becomes habitual or "automatic" behaviour. Unfortunately it seems easier to eliminate "junk spending" than it is to eliminate "junk food". I think the problem is that while you can arrange for your "essential" expenses (utility bills, home loan etc) to be paid automatically and can therefore focus on eliminating spending entirely (eg. "no spend" days), some basic level of food consumption is needed to maintain health. Food intake can't just be set on autopilot - every time you eat there is the chance you'll choose junk food instead of a more healthy food. I find that I'm most successful in sticking to a healthy eating plan if I have a fixed menu of healthy items for my breakfast, lunch and dinner - that way I CAN completely exclude eating anything that isn't "on my list".

Ah well, time to start writing down what I eat every day and tracking it on my diet spreadsheet...

Enough Wealth

Reviewing Net Worth Progress

April 11th, 2007 at 09:07 pm

Apart from a monthly update using NetWorthIQ, I also update a spreadsheet with my net worth data each data. I get daily values for my stock portfolios, margin loans, and retirement fund. The real estate valuations and mortgage loans are only updated monthly. This suits me as it only takes a few minutes each morning and its fun to see the daily gyrations in the various values. I find that I've gotten used to daily ups and downs, so that even fairly large "crashes" don't worry me as I treat it as just part of the "noise" in my investment returns.



My retirement fund is pretty well on track to provide for a comfortable retirement, so what do I compare the total NW to? I've chosen a couple of indicators that are shown on the chart below.

Firstly, I've used a logarithmic scale for the chart, so that projected ROI of 7%, 10% and 13% are straight lines. These values are my personal view of what would be "poor", "likely" and "good" returns over the long term for my ideal asset mix - assuming an inflation rate averaging 2.5%. The grey scale at A$1m is adjusted for the actual CPI data from 2002 to 2007, and projected forward at an assumed rate of 2.5%.

Secondly, I've plotted available data from the annual HILDA reports to show what the top 10% NW is for a single-person of my age at that year (actually HILDA only reports household data, so I've taken half the household value as an approximation for the single-person NW).

Thirdly, I've plotted available data from the annual HILDA reports to show what the top 25% NW is for a household with head of household of my age at that year.

Finally, I've plotted 1/100th of the annual BRW "Rich 200" list cut-off value. I scaled it to 1% so the figure is in the region of my NW. I think that the annual cut-off figure of the "rich list" is a good indicator of what returns the best investors are actually each year - with some upward bias as those whose do badly drop out of the "Rich 200" list, and more successful investors are added to the list.

Overall I'm quite happy with how my NW has been tracking in terms of both absolute return (averaging more than the expected ROI of 10%pa) and in comparison to the "rich list". In fact I've slowly been creeping up on the "rich list" data points - at this rate I might make it on to the list if I live another 200 years or so!

It's rather depressing to see how the NW of even the "top" 10% and 25% of Australian households has been progressing - it seems to be keeping pace with my "poor" average ROI of around 7%. This is probably due to "choice" of asset mix these households are making -most likely just a stake in their own home, a mortgage, and their compulsory superannuation being invested in the default "balanced" option. It would be interesting if the HILDA studies included details of asset allocations.

It will be interesting to track my continued progress against these "KPIs" in future years - since 2002 we've had the real estate boom go bust in Sydney, while the stock market has had a phenomenal bull run for the past 3-4 years.

Net Worth - PF Bloggers progress for MAR '07

April 9th, 2007 at 07:32 am

Here's the latest round-up on how the various PF (Personal Finance) bloggers who post their Net Worth each month are progressing.
Monthly Net Worth of PF Bloggers for MAR 2007:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x no Feb data no Feb data N/A
Blogging Away Debt 2x -$33,791.00 $2,311.00 6.4%
Blunt Money 2x $235,688.70 $3,373.42 1.4%
Consumerism Commentary 30 $87,999.49 $10,680.04 13.8%
Crazy Money 27 $248,085.00 $7,529.00 3.1%
Enough Wealth 45 $1,070,998.00 $4,210.00 0.4%
Financial ladder xx $152,120.85 $8,601.65 6.0%
Finance Journey 25 $153,888.00 $2,261.00 1.5%
It's Just Money 32 $163,908.024 $4,667.58 2.9%
Lazy Man and Money 2x $169,009.00 $1,869.00 1.1%
Make love, not debt 2x -$60,964.42 $3,213.85 5.0%
Making Our Way 37 no Mar data no Mar data N/A
Mapgirl 3x $42,647.00 $3,664.00 9.4%
Moomin Valley 4x $417,195.00 $11,137.00 2.7%
Money Blog Site 25 no Mar data no Mar data N/A
My Money Blog 28 $133,672.00 $7,147.00 5.6%
My Open Wallet 37 $326,997.00 no Feb data N/A
Savvy Saver 27 $194,039.00 no Feb data N/A
Seeking Wealth xx $20,089.63 $3,136.80 N/A
Tired But Happy xx $145,292.00 $5,415.00 3.9%

nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Please note - I'm still under the water (coughing up phlegm and feeling lousy), so I only updated the existing blogs in my list. If you sent me an email requesting to be added, I haven't forgotten you - I've just chosen to go to bed early, rather than add you to the list this month. Check back next month.

If anyone notices the N/A recorded for % change where dollar figures were listed last month and this month, it's because % change is not very meaningful where your net worth is very small - I generally don't bother including % change if your net worth is between -$50K and +$50K.

I've deleted a few blogs from the list that are either inactive or no longer post net worth updates.

Enough Wealth

Net Worth Update

April 3rd, 2007 at 03:45 am

My Networth as at 31 Mar totalled $1,070,988 (AUD), an overall increase of only $4,210 (0.39%) for the month. My stock leveraged stock portfolios increased by a net 3.52% during March, and the estimated valuations for my share of our home and investment property increased 1.42% compared to last month, which is encouraging. The property gains were slightly offset by our mortgage loan balances increasing by a net $1,084 (0.30%) due to our monthly redraw of $3,500. We're redrawing some of our advance mortgage payments to help with our repayments while DW is on maternity leave.

The biggest negative for the month was a sharp drop in the valuation of my retirement account, which wasn't recovered fully by the stock market recovery - possibly some fee or tax liability was paid out during the month. The retirement account balance ended down $6,628 (2.00%) for the month. I'll have to check all the transactions for the month online to confirm exactly what was going on, but the online transactions are a pain to analyse - having half a dozen investment options (mutual funds) in my retirement account, each and every transaction is split into a separate transaction for each investment option. The easiest method is to download the relevant date range and import it into excel, then sort by transaction type and description and total up all the related items for each date to work out the total amounts being deducted for fees, insurance premium, fee rebate, tax etc.

Enough Wealth

Net Worth - PF Bloggers progress for FEB '07 **Updated**

March 10th, 2007 at 01:47 am

Here's the latest round-up on how the various PF (Personal Finance) bloggers who post their Net Worth each month are progressing.
Monthly Net Worth of PF Bloggers for FEB 2007:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $49,081.15 -$206.56 -0.4%
Blogging Away Debt 2x -$36,102.00 $2,080.00 5.4%
Blunt Money 2x $232,315.28 -$165.97 -0.1%
Consumerism Commentary 30 $77,994.25 $2,751.93 3.6%
Crazy Money 27 $240,642.00 -$6,658.00 -2.7%
Enough Wealth 45 $1,066,778.00 $8,406.00 0.8%
Financial Freedom 30 no Feb data no Feb data N/A
Financial ladder xx $143,519.20 $2,921.96 2.1%
Finance Journey 25 $151,627.00 -$1,657.00 -1.1%
I'm a Saver 6x $1,470,081.00 $18,553.00 1.4%
It's Just Money 32 $159,240.44 $2,227.44 1.4%
Lazy Man and Money 2x $167,140.00 -$17,209.00 -9.3%
Make love, not debt 2x no Feb data no Feb data N/A
Making Our Way 37 $664,418.81 $21,778.32 3.4%
Mapgirl 3x $38,983.00 $2,800.00 7.7%
Moomin Valley 4x $389,704.00 $12,301.00 3.2%
Money Blog Site 25 -$21,064.32 $12,974.52 N/A
My Money Blog 28 $126,525.00 $3,036.00 2.5%
My Open Wallet 37 no Feb data no Feb data N/A
New Age Personal Finance 31 no Feb data no Feb data N/A
Savvy Saver 27 no Feb data no Feb data N/A
Seeking Wealth xx $16,952.83 N/A N/A
Tired But Happy xx $139,877.00 $3,565.00 2.6%

nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Enough Wealth

Net Worth Update: Mar 07

March 2nd, 2007 at 05:46 am

February was looking good until the very end when the Great Fall of China undid nearly all of the progress for the month. Luckily my retirement account did OK as I'd rebalanced it recently to reduce the excess allocation to Australian stocks that had developed over the past three years bull run:
* Average property prices were unchanged this month for the suburbs where my two houses are located.
* My stock portfolio equity went up only $3,523 (0.94%) this month but my retirement account increased significantly - up by $6,064 to $330,662 (up 1.87%).

My Networth as at 28 Feb now totals $1,066,778 (AUD), an overall increase of 0.79% for the month.

As discussed in previous posts, I'm bought 3 ASX200 Index 5500 Dec-20 Put options to partially protect against significant losses if the market drops substantially.

Net Worth - PF Bloggers progress for JAN '07

February 8th, 2007 at 06:00 am

Here's the latest round-up on how the various PF bloggers who post their Net Worth each month are progressing. I've updated this post to include a copy of newcomers. Leave a comment if I've missed yours out!
Monthly Net Worth of PF Bloggers for JAN 2007:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $49,287.71 $3,582.55 7.8%
Binary Dollar 2x no Jan data no Jan data N/A
Blogging Away Debt 2x -$38,182.00 $509.00 1.3%
Blunt Money 2x $232,481.25 $4,246.93 1.9%
Consumerism Commentary 30 $75,173.52 $6,306.91 9.2%
Crazy Money 27 $247,301.00 $5,316.00 2.2%
Enough Wealth 45 $1,058,372.00 $25,589.00 2.5%
Financial Freedom 30 no Jan data no Jan data N/A
Financial ladder xx $140,597.24 $5,750.69 4.3%
Finance Journey 25 $153,284.00 $3,655.00 2.4%
It's Just Money 32 $157,013.01 $2,691.53 1.7%
Lazy Man and Money 2x $184,349.19 $2,561.58 1.4%
Make love, not debt 2x -$66,274.27 $4,513.67 6.4%
Making Our Way 37 $639,201.77 $34,000.00 5.6%
Mapgirl 3x $36,183.00 $2,183.00 6.4%
Money Blog Site 25 -$34,038.84 N/A N/A
My Money Blog 28 $123,489.00 $8,980.00 7.8%
My Money Path 29 no Jan data no Jan data N/A
My Open Wallet 37 no Jan data no Jan data N/A
New Age Personal Finance 31 no Jan data no Jan data N/A
Savvy Saver 27 no Jan data no Jan data N/A
Seeking Wealth xx no Jan data no Jan data N/A
Tired But Happy xx $133,712.00 N/A N/A

nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Net Worth Update: Jan 07

February 3rd, 2007 at 02:15 am

The past month provided more good gains in my stock portfolio and retirement account, offset only slightly by a small drop in the valuations of my real estate assets:
* Average property prices were slightly down, dropping my property equity by $4,146 or 0.58%. We also had to redraw $3,500 from our home loan prepayments to meet our repayments as DW is on maternity leave and not earning any income at the moment.
* My stock portfolio equity went up another $19,568 (5.50%) this month and my retirement account also increased significantly, although it was boosted a bit by some extra contributions being deposited by my employer this month - up by $12,561 to $324,598 (up 4.03%).

My Networth as at 31 Jan now totals $1,058,372 (AUD), an overall increase of 2.48% for the month.

As discussed in a previous post, I'm looking into either buying Index Put options to protect against significant losses if the market drops, or else selling off some of my stocks to repay my margin loans and eliminate my gearing while the market is at the current high level. I'm leaning towards the Put Options idea as I don't want to realise capital gains this financial year, and most of my margin loans have had the interest prepaid until 30th June, so I should keep my investments until then (and keep my fingers crossed that the market goes up a bit more until then).






Net Worth - PF Bloggers progress for DEC '06

January 10th, 2007 at 05:07 am

Here's the regular round up on how the various PF bloggers who post Net Worth each month are progressing. I've added a couple of new ones this month. Leave a comment if I've missed yours out!
Monthly Net Worth of PF Bloggers for DEC 2006:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $45,705.16 $2,563.37 5.9%
Binary Dollar 25 -$5,724.36 $4,521.17 N/A
Blogging Away Debt 2x -$38,691.00 $1,757.00 4.3%
Consumerism Commentary 30 $70,108.19 $2,820.68 4.2%
Crazy Money 27 $241,889.00 $8,238.00 3.5%
Enough Wealth 45 $1,032,783.00 $41,091.00 4.1%
Financial Freedom 30 $250,775.82 $16,972.50 7.3%
Financial ladder xx $134,846.55 $3,119.72 2.3%
Ima Saver 6x no Dec data no Dec data N/A
It's Just Money 32 no Dec data no Dec data N/A
Lazy Man and Money 2x no Dec data no Dec data N/A
Make love, not debt 2x -$70,787.04 $4,207.07 5.6%
Making Our Way 37 $605,201.77 -$8,224.51 -1.3%
Mapgirl 32 no Dec data no Dec data N/A
My Money Blog 28 $114,508.00 -$4,603.00 -3.9%
My Money Path 29 $105,092.00 $2,612.00 2.5%
My Open Wallet 37 $312,771.00 N/A v N/A
New Age Personal Finance 31 $151,917.64 $9,810.87 6.9%
Savvy Saver 27 $220,286.00 $2,837.00 1.3%
Tired But Happy xx $110,270.00 N/A N/A

nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Wealth Scoreboard

January 7th, 2007 at 05:24 am

For Australians the HILDA survey provides statistically valid data about household net worth and lets you see where you stand in relation to others of similar age or income. For US readers Scott Burns has some interesting posts about his "Wealth Scoreboard" based on similar data for the US. To save you hunting around his website for the latest figures, here they are:
Here’s how the Scoreboard works. Households in the U.S. are divided by age groups and then by the net worth required to be in the top 1 percent, top 5 percent, top 10 percent, and top 25 percent of all households in that age group. A median figure is also provided so you can tell whether you are in the top, or bottom, half of your age group.
If you are 50 to 59 years old, for instance, you’ll need a net worth of at least $188,000 to be in the top half of households that age. You’ll need 3 times that, $570,000, to be in the top 25 percent. And you’ll need a whopping $9,554,000 to be in the top 1 percent. (See table below.)





The Wealth Scoreboard




The table shows median net worth for households, arranged by age of the chief earner. To find your rank, go to the right age category and find the net worth closest to yours. (Data are from 2004; all U.S. dollars are in nominal terms, in thousands.)




Age Group



Top 1%


Top 5%


Top 10%


Top 25%



Median




80 or Older


$3,349


$1,770



$1,149


$536


$188




70 - 79



$9,198


$1,945


$1,106


$489



$183




60 - 69


$10,188


$3,075



$1,522


$699


$232




50 - 59



$9,554


$2,223


$1,180


$570



$188




40 - 49


$4,710


$1,297



$746


$353


$113




30 - 39



$1,971


$451


$272


$121



$39




20 - 29


$607


$206



$103


$30


$6



Source: VIP Forum, based on data in the 2004 Survey of Consumer Finances



The Scoreboard is put together by VIP Forum, a Washington DC based group that does research on wealth and wealth management practices. The basic data comes from a Federal Reserve survey that is done every three years, the Survey of Consumer Finances. The last survey was done in 2004.

Net Worth - PF Bloggers progress for NOV '06

December 11th, 2006 at 03:47 am

Here's the regular round up on how the various PF bloggers who post Net Worth each month are progressing.

Leave a comment if I've missed yours out!
Monthly Net Worth of PF Bloggers for NOV 2006:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $43,141.79 $2,732.33 6.8%
Consumerism Commentary 30 $67,376.57 $3,536.90 5.5%
Enough Wealth 44 $991,692.00 $686.00 0.1%
Financial Freedom 30 no Nov data no Nov data N/A
Ima Saver 6x $1,376,481.00 N/A N/A
It's Just Money 32 $152,126.94 $1,611.45 1.1%
Lazy Man and Money 2x $181,501.19 N/A N/A
Make love, not debt 2x -$74,995.01 $1,816.84 2.4%
Making Our Way 37 $613,426.28 $4,961.04 0.8%
Mapgirl 32 $33,602.00 -$921.00 -2.7%
My Money Blog 28 $119,111.00 $5,127.00 4.5%
My Money Path 29 $102,480.00 $2,220.00 2.2%
My Open Wallet 37 no Nov data no Nov data N/A
New Age Personal Finance 31 $142,106.77 $8,922.50 6.7%
Savvy Saver 27 $217,449.00 $4,130.00 1.9%
nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Net Worth Update: Dec 06

December 11th, 2006 at 03:42 am

The past month ended up flat with good gains in my stock portfolio and retirement account being offset by a drop in the valuations of my real estate assets:
* Average property prices decreased, dropping my property equity by $19,155 or 2.60%,
* My stock portfolio equity went up another $21,865 (7.25%) and my retirement account also increased slightly - by $335 to $301,981 (up 0.11%).

My Networth as at 30 Nov now totals $991,692 (AUD), an overall increase of just 0.07%.

I doubt that I will break through A$1,000,000 before the end of this year - property could go either up or down, and my US share funds are getting impacted by the decline in the USD vs. AUD.

personal finance, investment, wealth, stocks, real estate, saving

Measurement of Household Wealth

December 8th, 2006 at 05:44 am

There have been a many discussions on the pf blogs about how one calculates new worth - should we or shouldn't we include our cars, our stereo, our collection of yo-yos (not so silly: see this recent article about the value of old yo-yos) in our estimation of new worth? I came across some useful information about this which is worth sharing [ref: Annual Review of Sociology: Vol 26, p.502]
* Wealth is commonly identified with net worth and assessed as the difference between the total value of family assets and the amount of debt.
* There are various categories of household assets, with different features, so it is important to distinguish between them. Depending on which assets you include, net worth can be defined [Wolff, 1995] as:

Marketable Wealth - net worth excluding consumer durables such as automobiles, television and household appliances. The rationale being that these have less resale value than their consumption service to the family, so would usually not be sold to raise funds. This exclusion tends to impact poorer households to a greater extent, as consumer durables, especially cars, are the main "asset" of such families.

Financial Wealth - marketable Wealth minus equity in owner-occupied housing. As you need to live somewhere, it is often difficult to convert it into cash in the short term. In places such as Australia where superannuation is "preserved" (unable to be used for any purpose) until retirement age, it may be worth also excluding the value of your retirement account. I do both - my Net Worth tracked with NetWorthIQ is by "Marketable Wealth", and in my daily Net Worth spreadsheet updates I also have a column of Net Worth minus home and super.

Augmented Wealth - this includes some items not normally included in net worth estimates. Specifically, a discounted present value is calculated for any pension and social security retirement benefit.

BTW - while reading this paper I also came upon the following factoid:
"According to the Lampman-Smith_schwartz time series [Committee on Ways and Means 1992, p.1564], the richest 1% of the US population owned 36% of household net worth in 1929, but by 1982 the figure had dropped to 20%" although the data since 1982 is less clear - the decline may have continued or reversed somewhat.

ie. The Rich are getting POORER! This is probably why social commentators have recently started lamenting the income gap between CEO salaries and the average wage, rather than the traditional cry that the wealth gap between rich and poor is widening (although they still raise this topic on occasion - they simply refer the difference between rich and poor increasing in dollar terms, rather than in % terms, which wouldn't support their agenda.

My Long Term Net Worth Progress

December 2nd, 2006 at 06:00 am

Inspired by MyMoneyBlog's post of his Net Worth progress since his College days, I decided to dig out some old quarterly Net Worth figures I had sitting around from the mid '90s and plot them out. I also remember that I had saved approx. $10,000 working part-time during Uni Vacations (which was spent on a telescope and accessories), so I know that my Net Worth when I started working after graduation in '84 was around $10K.

Net Worth - PF Bloggers progress for OCT '06

December 1st, 2006 at 04:33 am

It's interesting to see how the various PF bloggers who post Net Worth each month are progressing. Here's a summary of all ones I found.

Leave a comment if I've missed yours out!
Monthly Net Worth of PF Bloggers for OCT 2006:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $40,409.46 $2,284.37 6.0%
Consumerism Commentary 30 $63,922.06 $4,808.43 8.1%
Enough Wealth 44 $991,006.00 $43,435.00 4.6%
Financial Freedom 30 no Oct data no Oct data N/A
It's Just Money 32 $150,515.49 $2,101.65 1.4%
Make love, not debt ?? -$76,811.85 $2,201.65 N/A
Making Our Way 37 $608,465.24 $8,575.47 1.4%
Map Girl 32 $34,523.00 $701.00 2.1%
Money and Values 24 no Oct data no Oct data N/A
My Money Blog 28 $113,984.00 $4,123.00 3.8%
My Money Path 29 $100,260.00 $7,816.00 8.5%
My Open Wallet 37 $305,058.00 $7,058.00 2.4%
New Age Personal Finance 31 $133,184.27 $8,337.58 6.7%
Savvy Saver 27 $213,319.00 $4,507.00 2.2%
nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Net Worth Update: Nov 06

November 29th, 2006 at 02:46 am

The past month was very good for my finances:
* Average property prices increased a little bit, boosting my property equity $5,198 or 0.71%,
* Both Australian and International stock prices moving sharply higher during October (so much for the theory of typically "up" months and "down" months). My stock portfolio equity went up an incredible $24,700 (8.85%) and my retirement account also increased by $13,077 to $301,646 (4.53%).

My Networth as at 31 Oct now totals $991,006 (AUD), an overall increase of 4.58%. Just for fun you can annualise this to 55% pa and say I'm the "Sage of Sydney" - at least for this month Wink

It will be interesting to see if I manage to break through A$1,000,000 this month - although I suspect it may be a short-lived visit to the "millionaires" club, depending on how "mr market" is feeling.

I don't whether my next short-term goal should be a NW of AUD $1 million when my home is excluded, a total NW of US $1 million, or just focus on achieving net worth AUD $2 million...

personal finance, investment, wealth, stocks, real estate, saving

Update: My $683,127 Dollar Debt

November 29th, 2006 at 02:41 am

Debt Update: as at 31 Oct 2006

My updated debt data will be on NCN soon. My debt balances as at 31 Oct were:

property |- $199,813.62 Inv Property a/c #1
|- $350,577.18 --- $263,442.68 Inv Property a/c #2
| (x 0.5) |- $237,898.05 Home Loan
|
-- $685,362.34 --- $334,785.16 --- $ 52,937.16 Portfolio Loan
| "good" debt stocks etc |- $ 19,404.57 Margin Loan a/c #1
| |- $ 94,108.28 Margin Loan a/c #2
| |- $155,585.68 Margin Loan a/c #2
| |- $ 11,749.47 Line of Credit a/c
|
$683,127.44 --+ $2,234.90 ----- $ 15,765.10 -- +$ 1,724.90 Cr Bank #1 VISA
TOTAL CCARDS | |- $ 11,760.00 Bank #2 MasterCard
|- +$ 18,000.00 |- $ 5,730.00 Bank #3 MasterCard
0% bal xfer
(invested)

Major changes in debt this month:
- increased Outstanding Portfolio Loan: $10,000 for purchase of T3, and $6,000 for monthly addition to "little book" US share portfolio
- increased Outstanding Property Loans by redraw of $6,000 to cover this month's property loan repayments while wife is on maternity leave
- increased Outstanding Margin Loans by regular gearing plan $100
- decreased balance xfer CC debt by min payment amounts of $375
- decreased Outstanding Citibank Line of Credit by $3,000 payment

Net change:
- total debt increased by $9,875.73 (1.47%)

personal finance, investing, money, debt

Update: AU Stock Portfolio - 1 Nov 2006

November 29th, 2006 at 02:40 am

My direct share investments in Australian Shares as at 1 October. The stock market performed strongly in October and my Portfolio has increased by $17,882.11, or 8.69% (after adjusting for a $5,000 share purchase during the month).

These shares are held in accounts with two margin lenders (Comsec Securities and Leveraged Equities). My overall gearing ratio decreased from 121.4% to 109.2% - I don't intend to borrow any more against the existing equity as it is important to have a more conservative LVR as the market gets overpriced and more likely to suffer a significant correction.




During the month I purchased an additional 1,112 shares in Australian Pipeline Trust for $5,000 through a company share purchase offer. This was an average
price of $4.50 per share - currently APA is trading at 4.60.

I also have paid for another $10,000 worth of Telstra shares via the T3 installment issue, but these shares haven't been listed yet. Allocations and pricing will be finalised during November.

personal finance, investment, stocks

Net Worth - PF Bloggers: SEP '06

November 21st, 2006 at 05:19 am

It's interesting to see how the various PF bloggers who post Net Worth each month are progressing. Here's a summary of all ones I found.

Leave a comment if I've missed yours out!
Monthly Net Worth of PF Bloggers for SEP 2006:

Blogger Age Net Worth $ Change % Change
Accumulating Money 2x $38,125.09 $2,342.41 6.5%
Consumerism Commentary 30 $59,232.35 $5,235.74 9.7%
Enough Wealth 44 $947,571.00 $10,720.00 1.1%
Financial Freedom 30 $221,898.75 $7,326.06 3.4%
It's Just Money 32 $148,413.84 $2,935.96 2.0%
Make love, not debt ?? -$79,013.54 $2,467.05 3.0%
Making Our Way 37 $599,889.77 $17,687.01 3.0%
Map Girl 32 no Sep data no Sep data n/a
Money and Values 24 $23,336.00 $2,650.00 12.8%
My Money Blog 28 $106,044.00 $5,567.00 5.5%
My Money Path 29 $92,444.00 $11,267.00 13.9%
My Open Wallet 37 $298,000.00 no Aug data n/a
New Age Personal Finance 31 $124,846.69 $6,931.87 5.9%
Savvy Saver 27 $208,812.00 $8,479.00 4.2%

7:07 AM, October 09, 2006
nb. Some ages have been adjusted as follows:
exact age provided = listed as given
"20's" = listed as 2x
"early 20's" = listed as 22
"mid-late 20's" = listed as 27
and so on.

Net Worth Update: Oct 06

November 20th, 2006 at 05:28 am

I've update my figures in NetworthIQ for the end of September - my share investments had a good month (up $14,725 or 5.6%) and my retirement (superannuation) fund also id well (up $5,436 or 1.9%). I expect these two to trend together as my super asset mix is biased mostly towards share investments (45% AU shares, 45% Int shares, 10% Property).

My direct property investments looked bad this month - after an abnormally large increase in their "estimated values" last month, this month saw a downward adjustment back towards more realistic valuations. One of the problems using the available 6-mo median sales price data for each suburb is that the sales volumes are quite low, so a few unusual sales can skew the results up or down. Overall, my property investment was down $10,068 or -1.4% this month, which was only slightly offset by my mortgage balance decreasing by $626.

Overall, my networth increased $10,720 or 1.14% during September - an amount equivalent to the grand total I managed to save up during my university years (doing factory work every holiday)! As my Great-grandma used to say "Look after the pennies and the pounds look after themselves".



personal finance
investment
wealth
stocks real estate

Estimating Net Worth - Real Estate

November 17th, 2006 at 06:00 am

I have quite a lot of real estate assets - they actually make up a larger percentage of my portfolio than I'd really like (due my wife and I starting out buying a rental property while living with my parents, then later on buying our own place). As they form such a large part of my investment portfolio, I like to be able to update the relevant asset and liability values each month, so that my net worth figure is a reasonable estimate.

The land valuations available via the council rates notices or annual state government land tax calculation are not really much use, as they are based on land value only, and are also only updated on a multi-year cycle.

My method for getting a reasonable monthly figure is to use the bank mortgage statement for the outstanding loan balance at the end of each month, and a simple algorithm for estimating the current valuation of each property. The algorithm is based on the MEAN value of sales in the relevant postcode area (obtained each month from the "suburb snapshot" available by postcode area on the homepriceguide.com.au website for example,2086). I use a simple multiple of the mean price, based on the ratio that applied when I initially purchased the property. For example, my rental property cost 0.9156 x the mean price for the area, so each month I estimate the current valuation as 0.9156 x the latest mean price value.

This allows me to update both house prices and loan balances, and track my progress against what I expected for my property portfolio - paying off the loans over 20 years and property values increasing by approx. 6% per annum in the long run:
It is interesting to also track the percentage change in prices each month, as this clearly shows the "boom & bust" of the Sydney property cycle - as it applies to the specific areas where my properties are.


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