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Tuesday, 1 December 2009

Net Worth Update: November 2009

November saw another significant increase in my net worth, although the 'Dubai announcement' adversely affected the valuations of my stock portfolio and retirement account balance on the last business day. This month the strength in the Sydney property market was augmented by similar gains in the stock market - by 30 November my net worth had risen to $830,832 (up $42,891, or 5.44%). That's still about 30% off my previous 2007 peak in NW.

My retirement account (SMSF) gained $7,598 (+2.46%) to $316,835, recovering most of the last month's loss. The recovery in the stock market was amplified by our modest amount of gearing (8 ASX200 index CFDs, code: IQ). A couple of month's worth of employer superannuation contributions were deposited into our SMSF bank account during November (around $4,000), so the result wasn't as good as it appears on the surface. I expect the December quarter employer contributions will not be deposited until sometime during January (around $6,000). Last Friday I transferred another $5,000 of our cash balance into our Vanguard "High Growth" index fund investment - hopefully the timing of this investment was just right to benefit from the one day dip in stock market indices.

The estimated valuations for my half of our real estate assets (house and investment property) were up substantially this month, by $20,365 (+0.2.53%) to $825,758. The Sydney real estate market still appears to be in an up-trend at the moment, but the winding up of Federal boost to First Home Owners grant and continued monthly rises in official interest rates will probably limit price increases until unemployement has clearly peaked. It appears that first home buyers have disappeared from the market in the past couple of months, which will probably drive down rental vacancy rates during 2010. A recent BIS forecast predicted a 21% rise in rents in Sydney over the next three years.

My stock portfolio gained $14,888 to $52,702 net equity during November (due to the high gearing levels - stock portfolio value is currently around $510,000 with $460,000 of margin and portfolio loans outstanding). The market (ASX200) appears to be consolidating around the 4700 level and I don't expect it to move much higher until company profits see further benefits from the Australian economic recovery in 2010.

I again didn't have any spare cash flow to pay off some mortgage or margin loan debt principal this month, as I continued spending on "home improvement" projects ($750 for a new sand filter for our swimming pool). Cash is likely to remain tight for the next few months as well, as I will have to pay for repairs to my digital SLR camera and the pool salt chlorinator, top-soil and turf for the new play area, and I will also have to find around $7,000 to pay for the ~270 sqm of granite wall cladding I recently bought for use on a new holiday house to be built on my parents' lakeside farm. During 2010 I'll have to finalise my requirements for the holiday house so I can get an estimate of the cost (built to "lock up" stage) and possibly proceed with getting plans drawn up for a development application to be submitted by the end of next year. Depending on how much of the construction (using Hebel or besser blocks) we do ourselves, the basic house structure may cost around $85,000. I've yet to work out how I'll pay for it ;)

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1 comment:

Money Funk said...

I love your tagline! Very funny!

And I love hearing, "...saw another significant increase in my net worth". Sweet!

Do you have a lump sum savings for your home improvement projects? I would love some new kitchen counter tops, that new dishwasher, etc...etc...etc... And I've heard you should save 10% of your mortgage payment for such home improvement costs. So, I am thinking about adding it to the budget coming 2010 because we are in need of upgrading.

Nice to run into your site. Adding to my blogroll. :)