Asset allocation has changed slightly since the last update due to the transfer of our retirement funds from our employer's superannuation fund into our own SMSF. The transfer resulted in a large cash balance, which is slowly reducing as we invest the funds into the Vanguard LifeStages High-Growth Index Fund over several months using dollar cost averaging.
According to my asset allocation records my net worth is currently $1,174,609 (this figures is slightly higher than my NetWorthIQ figure as it includes a small coin collection and some bullion that isn't counted in my monthly NetWorthIQ updates). This figure derives from a total asset valuation of $2,146,371 and debts of $971,762.
The debts can be broken down into $363,000 real estate mortgages, $229,491 in a "portfolio loan" used for some stock investments and secured against my real estate equity, $268,718 in margin loans, and $89,840 in miscellaneous debts (0% CC balance transfers, hedge fund investment loan etc.)
The overall Loan to Value Ration (LVR) is 45.3% (the ratio of debts to asset valuation), and the overall gearing level is 82.7% (debt:equity ration, or debt:NW ratio). My long term target is to maintain my LVR around 50% (ie. gearing around 100%) while working. This boosts overall ROI (provided investment total return (income + capital gains) exceeds borrowing costs), but also is a useful tax management tool via negative gearing (which effectively converts income into long term capital gains, which has a lower tax rate).
Copyright Enough Wealth 2007