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Friday, 3 May 2013

Net Worth Update: April 2013

Due to a strong stock market boosting both my geared stock portfolio and our self-managed superannuation fund, plus a couple of months' worth of employer superannuation contributions being deposited into our SMSF bank account during April, my net worth increased 3.47% for the month, reaching the highest level since May 2008. It is also higher than at any time prior to Dec 2006. On the other hand, this shows that the impact of the GFC has been for my net worth to not have increased at all over a period of more than six years (longer if you adjust for inflation), despite my 'saving' around 50% of my salary (either directly via superannuation salary-sacrifice, or as interest paid on money borrowed to invest). All-in-all I'd have been much better off to have left all my money sitting in a term deposit and simply saved my superannuation in a fixed interest RSA account! Historically this is definitely an abberation, with investing in a diversified portfolio of higher-risk assets generally providing a higher return than the risk-free rate. Not much of a consolation when this 'interesting' anomaly has occupied 20% of ones working life (and not over yet). Makes one look back fondly at the market 'crash' of 1987!

Our property portfolio performed poorly over the month, with the estimated valuation of our investment property declining substantially (down $17,000 from the previous month). It's possible that this is just a temporary 'blip' due to the mix of properties sold over the past 12 months in that suburb, but there seems to be some weakness re-appearing in the Australian property market in general. And the few offers we have received for our investment property during the nine months it has been on the market have all been well below my estimated valuation, suggesting that the real value of that asset is only about 90% of my monthly valuation figure. The impact of capital gains tax when we eventually sell that property will also reduce my net worth, so the 'cash' figure for my net worth if I liquidated all assets in the current market would probably be about $70,000 less than my listed value.

Assets$ Amount $ Diff% Diff
Stocks *$24,843+$17,201n/a
Retirement$500,889+$24,972+5.25%
Properties$875,837-$7,461-0.84%
Debts$ Amount $ Diff% Diff
Home Mortgage(s)$363,340-$89-0.02%
Net Worth$1,038,229+$34,801+3.47%
* the Stocks figure is portfolio value - margin loans

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