Net Worth - MAR 2025

Chart updated to end of MAR in sidebar.

Stocks/cash decreased -$22,350 (-8.39%) to $243,974 but this decline was exaggerated in relation to market movement as I withdrew $20K from my mortgage offset account to make a monthly non-concessional contribution into super, which impacted the cash component of this figure. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) decreased by -$50,411 (-2.47%) to $1,989,436, despite the $20K NCC made during the month.

Est. valuation of our home (my half) was unchanged at $1,191,911 (for the second month in a row). And the 'Other real estate' (my 'lake house' and the investment apartment) increased slightly by $11,728 (+0.54%) to $2,184,697.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by 4,918 (8.66%) to $61,714. I am currently adding $200 worth of gold to my Perth Mint online depository account each month. The global market and economic uncertainty resulting from Trump's "takeover offers" to Canada and Greenland, sucking up to Putin (while he commits daily war crimes), and putting tariffs on 'friends' and foes alike (which the US consumer will mostly pay for via increased prices either directly due to the tariffs on imports, or via higher cost domestic product replacing lower cost (before the tariff) imported goods. China's economy is also still struggling, Europe's economies took a hit from reduced access to cheap energy imports from Russia, and Russia is busy destroying its own economy and demographics in the attempt to destroy Ukraine's independence. All in all 2025 is shaping up to be a global recession, but it is quite hard to accurately make predictions.

Overall, NW decreased by -$56,115 (-1.18%) to $4,679,741 during March, which wasn't as bad as I had expected before calculating the figures -- the relatively large property component in my overall NW asset allocation mitigated the impact of the stock market decline.

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Net Worth - FEB 2025

Chart updated to end of FEB in sidebar.

Stocks/cash decreased -$9,279 (-3.37%) to $266,324 but this was actually a positive month as I also withdrew $20K from my mortgage offset account to make a monthly non-concessional contribution into super, which impacted the cash component of this figure. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) decreased by -$17,352 (-0.84%) to $2,039,847, despite the $20K NCC made during the month. Once I hit age 65 I will transfer the TBC amount into a SABP (pension phase) to take advantage of the tax-free status. When I retire I can move some of the SMSF SABP back into accumulation phase (about $500K) and use that 'cap space' to then purchase a lifetime pension from QSuper.

Est. valuation of our home (my half) was unchanged at $1,191,911. And the 'Other real estate' (my 'lake house' and the investment apartment) decreased slightly by -$5,453 (-0.25%) to $2,172,969.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $672 (1.20%) to $56,796. I am currently adding $200 worth of gold to my Perth Mint online depository account each month. Having to make platinum purchases manually was too much bother, and Pt and Au prices tend to be correlated anyhow. Silver had been underperforming relative to gold/platinum since I commenced my bullion purchases, so it may be losing its usefulness as a 'precious metal' and be acting more like a commodity. The production of a lot of silver is as a by-product of lead mining, so the production cost 'floor' is quite low.

Overall, NW decreased by $31,412 (-0.66%) to $4,735,856 during February. My annual salary bonus of $13,409 was paid out during Feb, so the monthly variation in NW dwarfs the impact of my bonus on NW several-fold. I also received my annual pay rise (3%, same as last year) -- at least it was slightly more than the current inflation rate (2.5%).

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Net Worth - JAN 2025

Chart updated to end of JAN in sidebar.

Stocks/cash decreased -$15,072 (-5.19%) to $275,603 but this was mostly due to my using $20K from my mortgage offset account to make a non-concessional contribution in super. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) increased by $92,010 (4.68%) to $2,057,199. Once I hit age 65 I will transfer the TBC amount into a SABP (pension phase) to take advantage of the tax-free status. When I retire I can move some of the SMSF SABP back into accumulation phase (about $500K) and use that 'cap space' to then purchase a lifetime pension from QSuper.

Est. valuation of our home (my half) decreased slightly by -$2,592 (-0.22%) to $1,191,911. And the 'Other real estate' (my 'lake house' and the investment apartment) also decreased by -$4,809 (-0.22%) to $2,178,422.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $3,896 (7.46%) to $56,124. Stock market volatility has increased since Trump was inaugurated and failed to stop the Russian invasion of Ukraine 'within one day', and the trade war he just instigated with Canada, Mexico and China has also increased market nervousness and hence some increased interest in Gold (the Chinese economic troubles are also seeing a shift from bank deposits and property to gold apparently). I don't have enough exposure to bullion to have much diversification impact on my overall investment portfolio.

Overall, NW increased by $73,433 (1.56%) to $4,767,268 during January, which was a new record high. Markets seem quite volatile currently, and the US market is overpriced according to several indicators, so I am a bit nervous and won't be surprised if my NW is lower by the end of 2025, rather than higher.

As usual I have no idea how things will turn out during the rest of 2025, so I will just stick with my investment structures, long term asset allocation, and usual saving and expense budget.

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Trialling my planned investment strategy for HEAS funds

As posted previously, when I reach 'Age Pension age' (67) I plan on making use of the Home Equity Access Scheme (HEAS) to obtain a loan of 150% of the Age Pension rate each fortnight (about $840 per fortnight), and dollar cost average into a 50:50 mix of VGAD (the Vanguard MSCI Index International Shares (Hedged) ETF) and the new ALFA (the VanEck Long-Short Complex ETF). The interest on a HEAS loan is capitalized and the interest rate is currently 3.95%. So if the investment returns more than this, it should add to my NW during my retirement. I don't want to make the investment  too cumbersome to manage or track, and need to be able to add a fortnightly amount via a regular savings plan. Investing in Australian based ETFs should make the annual tax reporting quick and simple, with a single AMMA (Attribution Managed investment trust Member Annual) statement for each ETF provided for us in tax return preparation. You can also request an annual statement from Services Australia outlining the HEAS balance, transactions and interest accrued for the year (which should be tax deductible if the HEAS funds are used to make an income producing investment).

VGAD has historic returns of 10.54% pa (5-yr avg) and 10,.27% (10-yr avg) and while there is no historic performance data for the new ALFA fund, it is intended to outperform the S&P/ASX 200 Accumulation Index over the medium to long term. The historic performance of the ASX 200 Accumulation Index is about 8.36% over the past 10 years. So, a 50:50 allocation to VGAD and ALFA could be expected to provide an average return somewhere around 9.4% pa over 20-30 years (maybe).

To get a 'feel' for how such an investment might perform I decided to make a small ($1,000) initial investment in this asset allocation using my superhero app. There is only a $2 brokerage fee for each trade. I bought 24 units of ALFA for $496.88 and 4 units of VGAD for $433.68. I have this setup in yahoo finance as a 'portfolio' so I can easily see how the investment is doing over the next few years.

If/when I commence the HEAS I will have the loan payments made directly into a credit union subaccount I setup for this purpose, and have an automatic transfer to a suitable (preferably $0 brokerage) trading account. I will probably make each fortnightly trade manually, as I can adjust the ratio of VGAD:ALFA purchased each time to keep the overall asset allocation close to 50:50 (ie. effectively do fortnightly 'rebalancing' for no increase in trading cost).

I might also look into automating the fortnightly purchase calculation (rebalancing) and trade execution, as some platforms are starting to include some tools to allow this (I haven't played around with that much so far).

One final benefit of using the HEAS loan scheme to invest (aside from the low interest rate) is that the outstanding loan balance is secured only against the property (or properties) used to take out the HEAS loan. They will stop making additional loan payments once you hit a specified age-based formula (around 50% of the property value), but in the event of a property market crash, the HEAS loan is only repayable upon your death, and only up to the value of the property used to secure the loan. In the unlikely event that the property was worth less than the outstanding loan balance, it is 'written off' (so won't impact other assets in your estate).

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