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Tuesday, 10 April 2012

Net Worth Update: March 2012

During the Easter long weekend I finally got around to updating my monthly net worth figures for the period Sep 2011 - Mar 2012. Nothing too exciting happened during this period - the Australian stock market dipped in late 2011 due to concerns with the PIGS debt crises in Europe and also a slow-down in the Chinese economy which is bringing global commodity prices off their peaks. But it has recovered most of this dip in recent months. And over the past year the Australian residential property market has been dropping, although the Sydney market had one of the smallest capital city declines - only around 10%. The property market (at least in Sydney) showed signs of levelling off during the first quarter of 2012, and might respond positively if the Reserve Bank cuts interest rates another 0.25% next month.

In September there was a change in the monthly property sales data available for the suburbs where we own residential property, and I took the opportunity the re-jig the formulae used to estimate the current market values of our properties, so the estimates are closer to the actual prices similar properties have sold for recently. This resulted in a one-off drop in the valuation of my property portfolio of about $40,000 as I can't be bothered to spread the $40,000 adjustment over the past 8 years over price estimates.

There's not much point in posting all the monthly figures since September, as they are available from networthiq (see the chart in the RH margin).

In my share portfolio not much has changed - my Fosters shares [FGL] were liquidated via the 'scheme of arrangement', and I used most of the proceeds to reduce my margin loan balance a bit, although I did reinvest about half the money in two ETF that are linked to the ASX200 - the iShares S&p/ASX High Dividend ETF [code IHD], and the Russell High Dividend Australian Shares ETF [code RDV].

Assets___________$ Amount
Stocks_*_________-$34,760 
Retirement_______$385,727 
Properties_______$890,260 

Debts____________$ Amount
Home Mortgage(s)_$359,278 

Net Worth________$881,948
* the Stocks figure is portfolio value - margin loans. As my portfolio value (and margin loan debt) is around $500,000 relatively small movements in the stock market produce huge percentage swings in the net value of my stock portfolio each month.

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4 comments:

Pythag said...

Welcome back "Enough Wealth", I have enjoyed your varied and informative blog. However, sometimes real life gets in the way of a good blog! One thing that has always intrigued me is how you value your real estate. Where do you get your suburb evaluations from. I have searched for something similar for my suburb but the sites I visit seem to want a fee for an update on suburb valuation. Can you help?

High regards,
Pythag

enoughwealth@yahoo.com said...

When we bought the property I compared the price we paid to the average and/or median price data for the suburb/postcode at that time, and thereafter used the same multiple of the current average sales price to estimate the current 'market value' of our property. I recently lowered this multiple a bit, as the estimates were getting a bit higher than the typical prices being achieved for older-style houses like ours in this suburb (this probably reflects the median price for a suburb inflating over time as some houses get renovated or replaced with newer, more expensive dwellings).

Although the available data has changed over time (originally median and average price data for the past 3-months was available, and now only median price for the past 12-months is available for free), it still provides a general indication of price movements in a suburb, and so allows a reasonable estimate of the current value to be made.

The site I use is http://www.homepriceguide.com.au/

You simply enter the postcode of a suburb of interest, and get the median price for houses (or units if that is what you own) in that suburb/postcode for the past 12-mo (although the data has a bit of a lag - for example, at the moment the figure is for the 12-mo period up to the end of Jan 2012).

The estimate will obviously only be a rough guide, but it's probably not too far off what a professional valuer would come up with. When my parents sold their house the three price estimates they received covered a range of about 20%, so any price estimate will have a fair margin for error.

Anonymous said...

http://www.westpac.com.au/personal-banking/westpac-online/view-your-other-accounts/

I have been using this feature provided in westpac online banking for years, it is great having an instant snapshot of all my bank accounts, credit cards etc with other financial institutions. It also generates a balance sheet showing current net worth. You are probably already aware of this given you have a westpac cc.

ThNks

Alex

enoughwealth@yahoo.com said...

I've tried that Westpac service, and it was good for most bank, CC and similar account balances. But it couldn't provide all the data needed to calculate my NW as it could,t get some financial info (margin loan accounts) or all investments (some hedge funds, our property values etc.). So I don't use the service any longer. I was also a bit wary of having the login info for other services all stored in one place.