Monday 11 July 2011

Net Worth Update: June 2011

Unfortunately June turned out to be as dismal as May. So, if you want any more detailed commentary, just read last months entry again ;(

Another bad month for my stock portfolio, with my geared stock portfolio dropping further into negative equity. However, this was due to annual interest pre-payments being capitalised more than the valuations of the stock investments changing much.

Our SMSF also had a bad month, as it is mostly invested in the Vanguard High Growth Fund and some ASX200 CFDs (IQ) which are back down to our entry price.

In addition, this month the valuations for our Sydney properties dropped slightly, finally getting in step with the national property market which has been dropping over the past year.

Overall my net worth is below the level it was at the start of 2011, despite saving over $2,000 each month (mostly into my superannuation account via salary sacrifice). It's not much fun paying interest on real estate mortgages and margin loans when valuations are dropping each month.

The only little ray of sunshine was that the combination of large amounts of tax-deductible interest on my property and stock market investment loans to offset rental income and dividends, and still having net capital losses from the GFC period to offset any small capital gains I made when selling some shares, meant that I got nearly all of the PAYG tax I paid last year refunded#. At least I have enough spare cash sitting in my credit union account to pay the monthly investment loan interest that hasn't been prepaid for the coming year.

(# before anyone comments that I should apply for a tax variation to avoid paying income tax which I simply get back without any interest at the end of the financial year, the reason I don't do so is because I'm never entirely sure if I'll liquidate some assets during the year which result in a capital gains tax liability. I don't want to end up paying penalty tax for having underestimated my taxable income when I apply for a variation).

Assets___________$ Amount______$ Diff_____% Diff 
Stocks_*_________-$31,293_____-$9,633______n/a % 
Retirement_______$369,293_____-$6,881____-1.83 % 
Properties_______$983,780_____-$3,751____-0.38 % 

Debts____________$ Amount_____$ Diff_____% Diff 
Home Mortgage(s)_$360,171______ -$88_____-0.02 % 

Net Worth________$961,609____-$20,176____-2.01 %
* 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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