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Tuesday, 4 March 2008

Boys Own Financial Plan

The boys (DS1 and DS2) net worth decreased slightly this month, taking hits on their small, undiversified stock portfolios. DS1 suffered the worst performance, with his investments in ANZ and QBE both doing badly. DS2 did slightly better, with CSL and CPU in his portfolio.

The long term financial plan for the boys aims for each of them to have a net worth somewhere north of $100K when they turn 18 - providing a sound base for them to save for a house and fund their retirement accounts without too much stress.

There actual and projected net worths are plotted against age below:



The projection is based on the following assumptions:
Savings accounts.....1.2% real return
RSA account..........4.7% real return
stock portfolio......8.8% real return
superannuation.......8.8% real return
(invested in stock/geared stock funds)

savings:

  • $1,200 pa contribution each (by me) into their superannuation accounts
  • $1,500 pa government co-contribution each into their superannuation accounts
  • $50 per month saved from their odd jobs/busking/pocket money etc.

The recent dip in DS1's graph shows how unlikely it is that the actual outcomes will be anything like the smooth projection.

Copyright Enough Wealth 2007

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