Net Worth MAY 2025

Chart updated to end of MAY in sidebar.

Stocks/cash increased $7,015 (+2.55%) to $281,827 but a large part of that increase was the bi-annual allocation of employee shares via the ESPP. I bought some VGAD and VVLU ETF units in my Vanguard Personal Investor account. I will 'rebalance' to my target 80:20 allocation via any future purchases (by varying the ratio of VGAD:VVLU units I purchase in each tranche. The good thing about the Vanguard Personal Investor account is that there is no trade fee when purchasing Vanguard ETFs, and only a flat $9 trade fee when I eventually sell the accumulated units in an ETF.

Retirement savings (SMSF etc) increased by $99,697 (+4.91%) to $2,128,487, partly boosted by the final $20K NCC made during the month.

Est. valuation of our home (my half) was unchanged at $1,191,911 (for the fourth month in a row). And the 'Other real estate' (my 'lake house' and the investment apartment) decreased by -$13,272 (-0.61%) to $2,165,400.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $1,182 (1.90%) to $63,275. I am currently adding $200 worth of gold to my Perth Mint online depository account each month.

Overall, NW increased by $94,622 (1.99%) to $4,828,909 during May.

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The insanity of IBKR

I thought I would setup a trading account with IBKR, with the intent to simply use it in future to make regular purchases of VDAL ETF units and making use of their advertised low-rate margin lending.

Turns out it was a total waste of my time and effort. In summary:

My wife already had an (unused so far) account with IBKR and sent me a 'referral' link, so I decided to sign up and test things out.

After signing up and transferring in an initial $2K to fund my account (and answering some questions about income and net worth) the automated sign-up process suggested I join as a 'sophisticated/ wholesale' account, rather than 'retail' account.

Looking at the info available about their margin lending, it *appeared* that the standard interest rate of 5.4% would apply, while a 1% 'surcharge' would be added for retail investors, so I thought 'why not sign up as a wholesale/sophisticated' investor if I get an extra 1% pa cheaper margin loan rate?

Turns out that:

1. I was not eligible for the $1K worth of IBKR shares as a new referral, as I am in the same household (address) as DW. I also didn't even get the normal $200 bonus available for any new account -- apparently as a referral from the same household I get even less than a 'walk in' new account!

2. The sophisticated/wholesale account application was 'pending' until I provided either a) a CPA (accountant) certificate regarding my assets/income meeting the requirements (I don't use an accountant, so that would cost me $110 -- and need renewal every 2 years), or b) get an SOA from a AFSL (while I am a registered financial advisor, I am currently 'between' AFSLs, and probably couldn't issue an SOA for myself anyway (and it would cost at least $500 to have one prepared by the paraplanner service at my old dealer group).

3. Further reading of the 'fine print' around the margin lending rates also revealed that the 1% surcharge is still applied to wholesale *individual* accounts, even if they are sophisticated/wholesale (so what's the point?)

So, I decided to cancel my application to change the default retail account to wholesale, so I could then immediately proceed with the process to change the default 'cash' trading account to a 'margin loan' trading account (and make my first test trade).

It was simply to apply online for the account type change, BUT they then sent out an automated email saying that since I didn't have an SOA, I would need to get a 'financial situation check' done by an associated third party. After sending in a copy of ID (driver's license') a second email then provided a link that I would need to use to provide that 'third party' with full access (login) to my main bank account -- so they could download and check my past 6 months of transactions! Sounds very risky to give some random 'third party' login access to my bank account(s)!!

And WTF - why a 'credit check' at all? - a 'margin loan' is secured against the value of the securities held in the account (and IBKR only has a modest LVR max of 50% in general), so there should be no need for personal financial info. This process would be something required if you were applying for an unsecured personal loan, not a margin loan.

Anyhow, I sent a rude reply to the email requesting I provide direct access to my main financial account, and withdrew most of my $2K deposit (I left a token $10 to keep the account open, in case they come back with some more sensible process), and will likely close the account.

All this for a modest $50K margin lending facility!

ps. I already have margin lending arrangements with three other margin lenders for a total credit limit of $900K, but the interest rates (between 9.4% and 10.2%) make use of margin uneconomic (except perhaps as a tax strategy to eliminate taxable dividend income and replace it with long term capital gains -- but at considerable risk). Looks like when I start investing my regular HEAS loan amounts (3.95% interest rate) I might as well not use 'double gearing' and instead just invest using my Vanguard Personal Investor account (where I can buy Vanguard funds and ETFs for $0, and only pay a $9 fee to sell Vanguard ETFs). If I make regular Vanguard ETF purchases there should be no trading fees, and only a single $9 fee when I eventually sell each holding.

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Benchmarking our SMSF performance

It is a bit pointless comparing how our SMSF has performed relative to others, as "it is what it is" to some extent. I can't jump into my time machine and change a decision made 15 years ago! But if our SMSF performance had been woeful, it might indicate that a change could improve future prospects. Fortunately our SMSF performance doesn't seem too bad -- at least in comparison to the median Growth Fund performance as reported by superguide.com.au

The data isn't quite comparable, as our SMSF annual performance (provided by eSuperFund) is for financial years, whereas the Median Growth Fund performance figures are for calendar years (they have financial year data behind a pay wall, but I am not going to pay $55 just to access the data).

The annual figures are shown below, along with historic 10-year trailing averages. The pattern shown from year-to-year is very similar, so comparing FY to CY doesn't appear to skew the comparison too badly.

The 10-yr averages show that our SMSF has outperformed the media Growth Fund by 1.06% - 2.39%. Which is line with the overall average historic annual performance since 2011 -- 9.52% vs. 7.85%. Part of this is likely due to our asset allocation being slightly more 'High Growth' than 'Growth', as shown by the higher stdev (8.27% for our SMSF vs. 6.43% for the median Growth Fund). But we are not taking on all that much extra risk (volatility) as the 2SD range is -7.03% to +26.06% from our SMSF (meaning we could expect the annual return to fall within this range 95% of the time), while the range for the median Growth Fund is quite similar: -5.01% to +20.71%. Personally I would be just as sanguine about a -7.03% negative return as a -5.01% negative return. Even the -3SD performance wouldn't be that much different: -15.3% for our SMSF vs.  -11.44% for the median Growth Fund.

Aside from slightly higher risk (and hence return), the other reason our SMSF performance is slightly better is likely due to the SMSF being quite low fees. The investment fee is only 0.29% (investing mostly in Vanguard Index Funds) and the overall admin fee for our SMSF works out to be only 0.063% based on our current balance.

Whatever the root cause for the performance differential (I won't claim it is due to my brilliant investment selection or occasional attempts at 'market timing'), over a 30-year timeframe the difference would be quite pronounced. A $100K lump sum invested with 9.52% average ROI would result in $1,528,598 vs. $100K invested with 7.85% median Growth Fund performance would result in only $965,171. That would mean the end result would be 58% more to fund retirement after 30 years!

All in all, our SMSF performance has been quite satisfactory. Which is better than the alternative ;)

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Got bored and did a trade

I was bored and clicked on a link to an MSN watchlist idea re 'Large-cap Growth'. It consists of five companies (WiseTech Global, Fisher, Paykel Healthcare, Xero, Pro Medicus and REA Group). The 1-year return was +42.59% and a quick glance at the 5-year chart shows +317.11% growth, and for maximum available historic performance (since 2016) +1,848.25%. Past performance is not an accurate predictor of future performance, but what is... it is all guesswork and good luck.

I decided to transfer $2,500 into my superhero trading app and placed a market order to buy $500 of each stock. We'll see tomorrow if the order is filled, at what price(s). I don't even know if these trade via the app as fractional shares, or if the orders will be rounded down to the nearest whole number of shares.

In any case it is just a minor experiment and we'll see how it pans out over the next 3-5 years. From highs reached in Feb this watchlist had dropped by -24% to a low point on 7 April, and are still down 11% from the Feb highs, so it either a case of buying a dip on an ongoing uptrend, or buying a dead-cat bounce on the way down.

I already had used $1,000 in my superhero trading app to purchase some VanEck Australian Long Short Complex ETF and Vanguard MSCI Index International Shares Hedged ETF last September, so I now have a total of $3,500 invested in my superhero app account, with roughly $500 invested in each of:

ALFA.AU, VGAD.AU, WTC.AU, FPH.AU, XRO.AU, PME.AU and REA.AU

The historic 1-year performance for this 'portfolio' would have been +34.83%, and for past 3-yrs +125.06%, and for past 5-yrs +238.45%. We'll see how this turns out in a few year's time.

The tax reporting shouldn't be too onerous, as I have provided my TFN to superhero when I setup the account, so the ATO should get the required annual data via the 'prefill' function.

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Net Worth APR 2025

Chart updated to end of APR in sidebar.

Stocks/cash increased $30,838 (+12.64%) to $274,812 but in reality the investments ended the month in a similar position as at the end of last month (despite the large Trump tariff induced panic and recovery during the month) - the change in my stocks/cash figure was due to a combination of withdrawing $20K from my mortgage offset account to make a monthly non-concessional contribution into super, and a deposit of an unexpected gift of $50K I received from my 90 year old mother when she visited during the Easter long weekend. I told her she can have it back any time (with interest) if she needs/wants it -- but in the meantime it seems more sensible to have the money sitting in my mortgage offset account earning the equivalent of 6.29% pa, rather than her keeping $50K of cash sitting in a handbag at the back of a wardrobe. The past 6 months worth of ESPP (Employee Share Purchase Plan) contributions (10% of my salary) will be used the make the first bi-annual share purchase of my employer's shares on 1 May. I already had some share allocated to me several year ago, so it will be nice to slowly add to my holding via the ESPP from now until I retire (or get retrenched). The share price is calculated at the lower of the market price at the start and end of the 6 month period, and is then discounted by 15%. So basically by participating I get an extra 15% of 10% of my salary -- so equivalent to a 1.5% salary boost. I won't say no to free money ;)

Retirement savings (SMSF etc) increased by $39,354 (+1.98%) to $2,028,790, partly boosted by the $20K NCC made during the month. There was also a mysterious $800 'rollover' from the ATO into my employer's preferred super fund. I checked in mygov but can't see any notification regarding this payment, but it might get generated and sent out after the payment was processed. I guess it might be some 'lost super' from some casual employment, but I can't think of any likely source.

Est. valuation of our home (my half) was unchanged at $1,191,911 (for the third month in a row). And the 'Other real estate' (my 'lake house' and the investment apartment) decreased slightly by -$6,025 (-0.28%) to $2,178,672. My parents have decided they will probably move straight into an aged care facility when/if they sell their current rural property, rather than move into the lake house for a couple of years as originally planned. So, rather than leave it unoccupied, I will go there a couple of times with DS1 on long weekends later this year to tidy up, clean the water tanks etc. and then probably rent it out from the start of next year. It should be able to be rented out for about $650/wk, so will be worthwhile even if I have to pay a local slashing/mowing service to cut the paddocks every month for about $500. The rent would cover the council rates and insurance (and would also make those expenses tax deductible against the rental income), and a tenant would ensure the property doesn't get vandalized (which happened once before).

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $379 (0.61%) to $62,093. I am currently adding $200 worth of gold to my Perth Mint online depository account each month.

Overall, NW increased by $64,546 (1.38%) to $4,744,287 during April, but that was mostly due to the gift from my mother.

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Net Worth - MAR 2025

Chart updated to end of MAR in sidebar.

Stocks/cash decreased -$22,350 (-8.39%) to $243,974 but this decline was exaggerated in relation to market movement as I withdrew $20K from my mortgage offset account to make a monthly non-concessional contribution into super, which impacted the cash component of this figure. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) decreased by -$50,411 (-2.47%) to $1,989,436, despite the $20K NCC made during the month.

Est. valuation of our home (my half) was unchanged at $1,191,911 (for the second month in a row). And the 'Other real estate' (my 'lake house' and the investment apartment) increased slightly by $11,728 (+0.54%) to $2,184,697.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by 4,918 (8.66%) to $61,714. I am currently adding $200 worth of gold to my Perth Mint online depository account each month. The global market and economic uncertainty resulting from Trump's "takeover offers" to Canada and Greenland, sucking up to Putin (while he commits daily war crimes), and putting tariffs on 'friends' and foes alike (which the US consumer will mostly pay for via increased prices either directly due to the tariffs on imports, or via higher cost domestic product replacing lower cost (before the tariff) imported goods. China's economy is also still struggling, Europe's economies took a hit from reduced access to cheap energy imports from Russia, and Russia is busy destroying its own economy and demographics in the attempt to destroy Ukraine's independence. All in all 2025 is shaping up to be a global recession, but it is quite hard to accurately make predictions.

Overall, NW decreased by -$56,115 (-1.18%) to $4,679,741 during March, which wasn't as bad as I had expected before calculating the figures -- the relatively large property component in my overall NW asset allocation mitigated the impact of the stock market decline.

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Net Worth - FEB 2025

Chart updated to end of FEB in sidebar.

Stocks/cash decreased -$9,279 (-3.37%) to $266,324 but this was actually a positive month as I also withdrew $20K from my mortgage offset account to make a monthly non-concessional contribution into super, which impacted the cash component of this figure. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) decreased by -$17,352 (-0.84%) to $2,039,847, despite the $20K NCC made during the month. Once I hit age 65 I will transfer the TBC amount into a SABP (pension phase) to take advantage of the tax-free status. When I retire I can move some of the SMSF SABP back into accumulation phase (about $500K) and use that 'cap space' to then purchase a lifetime pension from QSuper.

Est. valuation of our home (my half) was unchanged at $1,191,911. And the 'Other real estate' (my 'lake house' and the investment apartment) decreased slightly by -$5,453 (-0.25%) to $2,172,969.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $672 (1.20%) to $56,796. I am currently adding $200 worth of gold to my Perth Mint online depository account each month. Having to make platinum purchases manually was too much bother, and Pt and Au prices tend to be correlated anyhow. Silver had been underperforming relative to gold/platinum since I commenced my bullion purchases, so it may be losing its usefulness as a 'precious metal' and be acting more like a commodity. The production of a lot of silver is as a by-product of lead mining, so the production cost 'floor' is quite low.

Overall, NW decreased by $31,412 (-0.66%) to $4,735,856 during February. My annual salary bonus of $13,409 was paid out during Feb, so the monthly variation in NW dwarfs the impact of my bonus on NW several-fold. I also received my annual pay rise (3%, same as last year) -- at least it was slightly more than the current inflation rate (2.5%).

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Net Worth - JAN 2025

Chart updated to end of JAN in sidebar.

Stocks/cash decreased -$15,072 (-5.19%) to $275,603 but this was mostly due to my using $20K from my mortgage offset account to make a non-concessional contribution in super. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) increased by $92,010 (4.68%) to $2,057,199. Once I hit age 65 I will transfer the TBC amount into a SABP (pension phase) to take advantage of the tax-free status. When I retire I can move some of the SMSF SABP back into accumulation phase (about $500K) and use that 'cap space' to then purchase a lifetime pension from QSuper.

Est. valuation of our home (my half) decreased slightly by -$2,592 (-0.22%) to $1,191,911. And the 'Other real estate' (my 'lake house' and the investment apartment) also decreased by -$4,809 (-0.22%) to $2,178,422.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $3,896 (7.46%) to $56,124. Stock market volatility has increased since Trump was inaugurated and failed to stop the Russian invasion of Ukraine 'within one day', and the trade war he just instigated with Canada, Mexico and China has also increased market nervousness and hence some increased interest in Gold (the Chinese economic troubles are also seeing a shift from bank deposits and property to gold apparently). I don't have enough exposure to bullion to have much diversification impact on my overall investment portfolio.

Overall, NW increased by $73,433 (1.56%) to $4,767,268 during January, which was a new record high. Markets seem quite volatile currently, and the US market is overpriced according to several indicators, so I am a bit nervous and won't be surprised if my NW is lower by the end of 2025, rather than higher.

As usual I have no idea how things will turn out during the rest of 2025, so I will just stick with my investment structures, long term asset allocation, and usual saving and expense budget.

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Trialling my planned investment strategy for HEAS funds

As posted previously, when I reach 'Age Pension age' (67) I plan on making use of the Home Equity Access Scheme (HEAS) to obtain a loan of 150% of the Age Pension rate each fortnight (about $840 per fortnight), and dollar cost average into a 50:50 mix of VGAD (the Vanguard MSCI Index International Shares (Hedged) ETF) and the new ALFA (the VanEck Long-Short Complex ETF). The interest on a HEAS loan is capitalized and the interest rate is currently 3.95%. So if the investment returns more than this, it should add to my NW during my retirement. I don't want to make the investment  too cumbersome to manage or track, and need to be able to add a fortnightly amount via a regular savings plan. Investing in Australian based ETFs should make the annual tax reporting quick and simple, with a single AMMA (Attribution Managed investment trust Member Annual) statement for each ETF provided for us in tax return preparation. You can also request an annual statement from Services Australia outlining the HEAS balance, transactions and interest accrued for the year (which should be tax deductible if the HEAS funds are used to make an income producing investment).

VGAD has historic returns of 10.54% pa (5-yr avg) and 10,.27% (10-yr avg) and while there is no historic performance data for the new ALFA fund, it is intended to outperform the S&P/ASX 200 Accumulation Index over the medium to long term. The historic performance of the ASX 200 Accumulation Index is about 8.36% over the past 10 years. So, a 50:50 allocation to VGAD and ALFA could be expected to provide an average return somewhere around 9.4% pa over 20-30 years (maybe).

To get a 'feel' for how such an investment might perform I decided to make a small ($1,000) initial investment in this asset allocation using my superhero app. There is only a $2 brokerage fee for each trade. I bought 24 units of ALFA for $496.88 and 4 units of VGAD for $433.68. I have this setup in yahoo finance as a 'portfolio' so I can easily see how the investment is doing over the next few years.

If/when I commence the HEAS I will have the loan payments made directly into a credit union subaccount I setup for this purpose, and have an automatic transfer to a suitable (preferably $0 brokerage) trading account. I will probably make each fortnightly trade manually, as I can adjust the ratio of VGAD:ALFA purchased each time to keep the overall asset allocation close to 50:50 (ie. effectively do fortnightly 'rebalancing' for no increase in trading cost).

I might also look into automating the fortnightly purchase calculation (rebalancing) and trade execution, as some platforms are starting to include some tools to allow this (I haven't played around with that much so far).

One final benefit of using the HEAS loan scheme to invest (aside from the low interest rate) is that the outstanding loan balance is secured only against the property (or properties) used to take out the HEAS loan. They will stop making additional loan payments once you hit a specified age-based formula (around 50% of the property value), but in the event of a property market crash, the HEAS loan is only repayable upon your death, and only up to the value of the property used to secure the loan. In the unlikely event that the property was worth less than the outstanding loan balance, it is 'written off' (so won't impact other assets in your estate).

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Net Worth - DEC 2024

Chart updated to end of DEC in sidebar.

Stocks/cash decreased -$18,263 (-5.91%) to $290,675 but this was mostly due to my using $20K from my mortgage offset account to make a non-concessional contribution in super. I will do a similar contribution every month for the rest of the FY, so I max out the NCC cap for this FY, as I will have a $0 NCC cap in future years (probably) due to my TSB being too high.

Retirement savings (SMSF etc) increased by only $2,045 (0.1%) to $1,965,189. Despite my normal SGL contributions and the extra $20K NCC.

Est. valuation of our home (my half) increased slightly by $1,296 (0.11%) to $1,194,503. However he 'Other real estate' (my 'lake house' and the investment apartment) decreased by -$12,239 (-0.56%) to $2,183,231.

Other assets (my online depository bullion account at Perth Mint, and the bullion value of my gold and silver proof coin collection) increased by $2,425 (4.87%) to $52,228 due to a resumption of the gold and silver upwards trend during December..

Overall, NW decreased somewhat by -$24,736 (-0.52%) to $4,693,835 during December, so I didn't finish 2024 on a record high. However, my NW still increased by $0.5M during the past year, so I can't complain ;).

As usual I have no idea how things will turn out during 2025, so I will just stick with my investment structures, long term asset allocation, and usual saving and expense budget.

Subscribe to Enough Wealth. Copyright 2006-2025