Saturday, 16 July 2022

A Tale of Two Bloggers

One of the PF bloggers I follow is Moomin as he is located in Australia and we met briefly when he was in Sydney when he returned to Australia from the US several years ago. It is interesting (to me) to compare our NW progress, as we both publicly track our NW using Networthshare (although he tracks combined household NW in USD terms, whereas I track my personal NW (excluding DWs NW) in AUD terms). I grabbed screenshots and did a simply offset to remove the impact of gifts/inheritance, and the result is quite similar - probably due to us both have a signficant exposure to AU and international stock markets as part of our asset allocations. Although Moomin is a professional economist and makes more exotic/sophisticated investments than me these days.

 Moomin is several years younger than myself, and has a younger family, so he is actually doing quite a bit better than myself an on age adjusted basis (and at the current USD-AUD exchange rate), but the general trend and impact of global events is quite similar. One difference is that I was making significant use of gearing via margin loans up until 2007, so the impact of the GFC was more obvious on my NW than on Moomins. On the other hand, I have stuck with simply index fund investing for my superannuation investment, whereas Moomin makes use of much more sophisticated investment vehicles (due to his expertise as an investor and economist) which has produced superior results compared to my basic approach in recent years, but appears to have been more exposed to the market decline in recent months.

Another difference is that I shifted our SMSF out of Vanguard High Growth Fund and into a mix of Vanguard Diversified and Conservative Funds in Feb 2018, so avoided the worst of the pandemic-induced market crash. I have a larger % of my NW tied up in real estate (our home and the lake house I was gifted), which probably accounts for Moomin's relative out-performance during 2019-2021.

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1 comment:

mOOm said...

Interesting. In Australian Dollar terms my curve is less volatile by design than this USD curve. Probably should do a blogpost on that. It's hard to take the effect of inheritance out. After the inheritance I had a lot of the money in cash and bonds and gradually invested it, which slowed down the growth rate. Now, absolute returns are higher (when returns are positive and vice versa) because of all that extra invested cash. Averaged over my wife and myself maybe we earn about the same as you in salary, though it was higher from 2011 to 2016 when both worked full time at our current jobs.