Net Worth: JUL 2020

Surprisingly the estimated valuation for our home, based on sales data for our suburb, increased during the month. This is contrary to the general trend in residential real estate prices across Sydney, so I wouldn't be surprised to see a decrease next month.

My retirement savings (SMSF account balance estimate and company super account balance) also increased substantially during the past month - mostly due to a generally positive share market during July, plus the usual monthly salary sacrifice and SGL contributions.

The stocks figure is the usual net amount of my margin loan portfolio assets minus the margin loan balances and my portfolio loan balance, but I started including the balances of a couple of minor share trading accounts (as I will be putting $10K into the IG account to trade the '12% solution' portfolio model) and a few cash accounts that I previously hadn't bothered including in my monthly NW spreadsheet calculations. Overall this added around $11,000 to the net 'Stocks' figure. On the other hand, I am funding the $1,500 monthly 'running costs' for my financial planning business from the portfolio loan, and also paying my quarterly uni fees for the MFinPlan degree out of that account, so the 'Stocks' figure isn't a pure reflection of the movements in my stock portfolio.

Overall my NW increased by $35,993 (1.40%) to $2.602m which I think is probably another 'record high' for me.

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Net Worth: JUN 2020

My NW rose about 0.5% during June, reaching a new 'all time high', which is quite pleasing during the middle of a pandemic (although anyone highly invested in tech stocks or a tech index fund during the past 6 months will have made about 35% gain!). Our reallocation of SMSF investments from bond index fund into growth index fund helped boost the performance of my estimated SMSF account balance during June. And my stock portfolio* also showed a small gain for the month. Our estimated house valuation hasn't changed even though new average monthly sales price data was available - apparently the average sale price for houses in our postcode has been constant for the past four months. My share of our home mortgage continued to slowly reduce, as we move past the 2/3 mark of our 25-year mortgage.

The 'other real estate' value remains constant (i.e. left at the cost price) for the off-the-plan $1m investment unit I bought last year and the lake house I 'inherited' a few years ago. And the 'other mortgage' value is being left as the notional cost price of the investment unit (I borrowed the money for the 10% deposit and stamp duty using part of my portfolio loan line of credit, and the remaining $900K is the amount I'll need to borrow to settle when the unit is completed in 2023). For fun I've been tracking one-bedroom unit sales data for the postcode area of my investment unit, and the calculated approximate monthly valuation has been in a modest up trend since I paid the deposit last year. But I won't start tracking the estimated value of the investment unit for my NW calculation until after it is completed and I get a proper valuation done.

But if the current trend in unit prices is accurate and continues until construction is completed in 2023, the unit *may* be worth around $1.5m by that time. Which should make it easy to get a $900K mortgage, and would also mean that my $140K investment (deposit and stamp duty) will have grown to around $600K equity in the property. After deducting the loan for the deposit and stamp duty, and the capitalised interest on the loan, that would result in a net profit of around $412K (subject to CGT). Can't really calculate a ROI for that as the investment was 100% funded using borrowed funds. Of course there is no guarantee that the unit will be worth more than I paid for it, so I could end up losing money.

* the 'Stocks' amount is net value of my geared stock/fund investments outside of super, minus the various margin loan balances and also the balance of my 'portfolio loan' that wasn't used for the unit deposit and stamp duty payment. As the 'portfolio loan' balance is increasing each month by both the capitalised interest, and the transfer of $1,500/mo to fund my financial planning business fixed costs, the 'Stocks' figure isn't really an accurate guide to how my stock/fund investments are performing.

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Net Worth: March 2020

This month my NW decreased by -$52,659 (-2.06%) which was a great result considering the state of the global markets. Our house price estimate actually increased, which offset most of the losses on my retirement savings and investment portfolio. I managed to time the switch of our SMSF investment from 100% Vanguard High Growth Fund into a 70:30 allocation to the Vanguard Conservative and Bond Funds, so our SMSF investments declined by 5.37% compared to the 20.54% loss we would have suffered if we had remained invested in the High Growth Fund. I had also sold off a large portion of my geared investment portfolio held outside of super, but bought a small tranche of Westpac shares in early March (which had lost considerable value by the end of March), and also bough some additional investments at the end of March which had gone down slightly in value as at 31 March.

Looking forward the property market may well cease to rise, given the likely increase in unemployment and general decrease in consumer confidence. However, this *might* be offset by a flight of investors from equities into property - as happened after the 1987 crash. The property market situation will also be affected by the ban on on-site auctions and 'open house' inspections in Australia, but although that will reduce volumes it may not directly impact prices.

I suspect the equity markets will continue to be highly volatile (obviously) and may well suffer further losses before reaching a 'bottom'. Covid-19 cases worldwide are heading towards $2MM+ and deaths over 100K during April, which is likely to erode any residual economic optimism fostered by the vast stimulus/support packages enacted by Central Banks and governments around the world during March. So for the moment I'm leaving out retirement savings with a conservative bias, and will cautious about increasing my equity investment portfolio too much while markets remain volatile and the economic outlook unclear.

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Net Worth: February 2020

This month my NW increased by $51,713 (2.07%) which was due to a combination of receiving my annual bonus (around $10K - used to reduce margin loan balances), increased house valuation (around $44K - which reflected two months of price changes), a slight gain ($9K) in my SMSF account balance, and a very modest (-$2K) overall decline in the value of my geared share portfolio. I sold off a substantial portion of my managed fund and share/ETF investments on 6 Feb and used the proceeds to pay off nearly all of my margin loan balances and the portfolio loan - thereby avoiding most of the impact of the market sell-off that happened during the past week.

Our SMSF investments also avoided the worst of the recent COVID-19 inspired market volatility (so far), due to my decision to go 'risk off' in early February. Our previous major asset allocation (Vanguard High Growth Fund) would had declined -7.97% by the end of Feb, compared to where it was when I implemented our switch in asset allocation. The investments we switched into were down -1.88% (Conservative Fund) and up 1.36% (Diversified Bond Fund) since the date I switched our asset allocation, so, overall, our investments (excluding the 5% or so we have sitting in the ANZ V2 cash account) were down by only 0.80% since we switched allocations. The switch cost about $3,000 due to the buy/sell spread (transaction cost), but has reduced the potential losses (if we'd stayed in the same asset allocation) on our SMSF investments by $108,500. And, given the ongoing potential for corona virus concerns to flow through into global economic performance and market returns during 2020/21 I'm happy to be invested more conservatively for the time being.

In my overall NW calculation I've included the amount paid so far towards my $1m investment unit ($100K deposit and $40,452 stamp duty) as the 'equity value' of my unit, and I won't start tracking a monthly estimated value for this apartment until construction is completed and the purchase 'settles' in early 2023. But for interest's sake I've been tracking the 1 and 2 bedroom unit prices for the suburb, and the overall 'trend' unit pricing, and the data up to this month suggests a potential increase of about $141,650 (14.17%) since I put down the holding deposit last year. I'll get a better idea of the real 'starting value' for my unit valuation tracking when construction is completed and I get a valuation done in order to get a mortgage on the unit. At the moment I'm ignoring any notional increase in the value of my 'off-the-plan' unit from my net worth calculations, and simply assuming I'd "break even" if I sold it before settlement. I'm carrying the notional total cost ($1m + $40K stamp duty) under 'other mortgages' as I included the deposit and stamp duty payment as 'equity' in my overall geared share valuation (as I initially paid these amounts using my portfolio loan). In reality the balance that will be due on settlement is $900K, and I'll fund that using a combination of a mortgage secured against the valuation of the apartment (at the time of settlement), and a draw down of available funds from my portfolio loan line of credit.

Our estimate house price has finally been updated with the recent (27 Feb) sales data for our suburb, and confirms that a significant recovery in Sydney real estate prices is underway (last month there wasn't any updated sales data available). At the bottom of the recent slump in house prices, the year-on-year decline in 6 month price averages had reached -12% (from the previous high). And the worst 12 month price drop was -13.4% (reached in July 2019). Currently the 12 month price change is +5.0%, and we're now only -8.13% below the previous peak (reached in October 2017). While concerns about corona virus may impact buyer confidence (and the numbers attending auctions!) in the short term, the correction in the share markets is likely to push investors towards real estate (as it did after the 1987 crash) as the only viable 'growth' asset, so should support a continued rebound in Sydney real estate prices. In the longer term, the slump in new construction commencements that has occurred is likely to be exacerbated by any weakness in the economy, and lead to a shortage in new stock once the current batch of developments has completed and settled. The troubles in Hong Kong (pro-democracy protests and corona virus concerns) may also encourage some additional migration of wealthy Chinese to Australia, which could also strengthen demand for high-end apartments. Overall, I'm reasonably optimistic regarding the eventual performance of my investment apartment.

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Net Worth: January 2020

My estimated NW increased by $60,194 (2.46%) during January to $2,502,382, due to the strong gains in Australian and global equities markets, which flowed on to the valuation of our SMSF investments. House equity valuation didn't change as there was no updated monthly sales data available when I did my monthly estimate of our house valuation (other reports suggest that the Sydney real estate market continued to improve). My NW hit the $2.5m mark for the first time, which helped mitigate the disappointment that my S-type Jaguar had to be written off as the Jaguar 'specialist' service center couldn't fix the problem with the electrical system (ended up selling the car to a parts dealer for $500, after buying it for $8,000 and spending about $2,500 trying to repair it when it broke down).

This month I had to pay the $42,452 'stamp duty' on the $1m off-the-plan unit that won't be completed until 2023 and I also paid $3,500 for the next uni term of my Masters course (which I paid using my 'portfolio loan'), and I also bought about $1,000 of 'toys' (a cheap $210 kayak to use when I'm at the lake house, some gym clothes and annual gym membership pre-payment, and a $600 .22LR CZ455 rifle to do some benchrest target shooting on the weekends), so I'm more than tapped out in terms of cash flow this month. Seems that I'm asset rich and cashflow poor and will need to clamp down on spending too freely on 'wants' - which is probably good practice for when I retire...

Fortunately I *should* get paid my annual bonus (around 10% of salary) during February, which will help pay this month's credit card bills! If I ever get around to lodging my 2018 and 2019 tax returns I should also get a tax refund (I sold some shares in 2018 and probably made some capital gains (still trying to find all the DRP and purchase details from back in the 1980s!) but I also had quite a few tax deductions, so should get some of my PAYG tax refunded).

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Net Worth: December 2019

My estimated NW managed to increase by $28,079 (1.16%) during December. This was despite the stock market weakness that saw my geared stock portfolio decline by -$9,809 (-3.62%), and my superannuation savings drop -$3,814 (-0.33%) despite making the usual monthly SGL and salary sacrifice contributions. The overall increase in NW was due to the local house sales data reflecting the recovery in the Sydney real estate market, hence my half of the estimated valuation for our house increased by $41,458 (5.88%). The increase was unusually large as the local sales data had not been updated last month or two, so this change reflected several months of price adjustment in one hit.

My total estimated NW reached $2.442m, which is a new 'record high' as they like to say when talking about the stock market ;)

In the medium term (5 years) the trajectory of my NW will be largely dependent on how the stock market and Sydney real estate perform, as changes in asset prices will dwarf the impact of my savings. In the longer term a lot will also depend on whether the off-the-plan I've put a deposit on ends up being worth more than the purchase price by the time construction is completed in 2023, and how the Sydney property market performs in the next decade or two. Hopefully this investment unit will be 'positively geared' (i.e. the rental return is sufficient to cover the outgoings - loan interest, strata levy, rates etc.) by the time I retire. The completion of a new 'metro' train station close to the unit is due about the same time, so that should help with rental and vacancy rates. On the down side there is quite a lot of new unit (apartment) development occurring in the area, which might affect prices.

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Net Worth: November 2019

My NW increased by $47,716 (2.02%) during November due to the significant improvement in the international and domestic stock markets. The real estate estimates remained unchanged as there was no new sales data updated yet for November, so I stuck with last month's estimate for our house price. Overall Sydney house prices increased during November (by around 2%) in response to the RBA interest rates cuts, so this may be a conservative valuation.

I wrote off the valuation for the S-type Jag that I bought last year, as the Jag dealer service centre has been unable to repair the electrical/security system fault which locked up the steering, so it is now past the overdue registration renewal deadline. I'll have to hand the rego plates in to the RTA (although I can put the rego number 'on hold' for 12 months, it will then cost me another $150 or so to have the plates remade if I do eventually get the Jag fixed, or else buy a different car to use the rego plates number on).

The stamp duty for my 'off the plan' unit purchase will be due in January and is roughly the same as this month's NW increase. If my NW ends up above $2.5m by the end of next year I'll be quite happy. The $100K deposit for the unit, and the $42K stamp duty, have both been funded with some of my available home equity loan, so I'll try to earn enough 'side income' from doing Uber Eats deliveries on the weekend evenings to cover that additional cash flow expense. As the interest is tax deductible I won't have to worry about any extra tax liability due to the extra income.

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Net Worth: October 2019

My NW increased by $15.6K during October (0.66%) due to the continued improvement in global and local stock markets adding value to my geared share portfolio and also our SMSF investment. Our house valuation also improved slightly (0.75%) as the recent improvement in the Sydney real estate market flowed through into our suburb. I think that is technically an 'all time high' for my NW, but it has been fairly flat during the past couple of years due to the correction in Australia real estate and a subdued local stock market.

I've decided to report the amount borrowed to fund the 10% deposit for my 'off-the-plan' investment apartment in the 'other mortgages' total. I will continue to report the cost base for the 'other real estate' holdings until the apartment development is completed (in 2023) and I get the unit valued to obtain a mortgage to fund the balance due at settlement. There will be some stamp duty (about $42K) payable in a couple of months - I'll add the amount to the 'other mortgage' figure, and also increase the cost base by the same amount, so it won't have any impact on my NW figure until settlement.

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Net Worth: September 2019

My NW increased by $33.6K during September (1.45%) mostly due to the gains in the local and global stock markets flowing through to my geared share portfolio and also our SMSF investment. Our house valuation was slightly lower, based on sales data for our suburb, whereas the overall Sydney market has shown a rebound in property values (likely due to the two interest rate cuts by the RBA in recent months).

My NW data for this month includes a $1m increase in 'other real estate' as an asset, and a corresponding increased liability of approx. $1m in 'other mortgages' - this is due to my purchase 'off-the-plan' of a one bedroom apartment in a high rise apartment development (88byJQZ) in St Leonards. I paid the initial $5K 'holding deposit' using my 'portfolio loan', so that debt has actually been reflected in the net value of my 'Stocks' position, leaving $995K liability. When the balance of the 10% deposit gets paid when I exchange contracts this month, the 'other mortgages' figure will reduce to $900K (that balance will fall due when the apartment construction is completed and 'settlement' occurs - currently scheduled for Q1 2023), and the full $100K deposit amount will be reflected in my 'portfolio loan' balance as I am using that to pay the deposit. This will reduce the net value of my 'Stocks'  portfolio by $100K, which is a bit misleading, so I may do an ongoing adjustment to the portfolio loan figure and include the $100K 'deposit' amount as part of the 'other mortgages' figure.

I'll probably also add the stamp duty (payable 3 months after exchange of contracts) as part of the 'valuation' of my apartment, as this will probably be similar to the price differential for a completed unit compared to 'off-the-plan' pricing. In the unlikely event that the apartment development does not complete, I should get my deposit refunded and also be able to claim back the stamp duty payment.

Hopefully the property market 'correction' in Sydney is indeed over, and between now and settlement in 2023 the valuation of my apartment will have risen (so it shouldn't be a problem getting a mortgage for the balance due on settlement - I will have paid a 10% deposit, and banks usually prefer to only lend 80% of valuation).

As with all geared investments there are several risks in making this investment, including:
* property prices may not appreciate, or may decline (as was the case during the recent property slump) - but historically St Leonards has enjoyed an average gain around 6% pa. I've calculated that I would make some gain as long as prices appreciate by at least 2%pa during my holding period (10-15+ years).
* I may not be able to arrange finance (a mortgage) when the development is completed in 2023 and I need to 'settle' the balance. This seems unlikely as I have another unencumbered property that could be used as collateral for the loan. But if I am no longer employed it may be more difficult to obtain a mortgage.
* Interest rates may increase substantially - currently investor mortgage rates are around 3.5%-4.0%, and interest rates are currently being reduced. On the other hand, interest rates are at historic lows, so a substantial rise in interest rates is a distinct possibility in the medium-long term.
* I may not be able to achieve typical rental returns ($560/wk for a one bedroom apartment), or may experience high vacancy rates. However, as a new, 'luxury' apartment on the 39th floor with views towards the city, harbour, and harbour bridge it should be relatively easy to rent out and obtain above average rent.

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Net Worth: August 2019

Although the equities markets recovered slightly towards the end of August, this did not completely offset the sharp declines experienced when the US-China 'trade war' became more intractable earlier in the month. Therefore, my geared stock portfolio and superannuation (which is mostly invested in Australian and International share markets via the Vanguard High Growth fund) investments declined by $11,061 and $10,163 respectively.

The net value of my geared stock portfolio continues to reflect the ~$2,600/mo of startup costs for my financial planning business that are being funded using my 'portfolio loan'. I haven't got any clients yet, but my goal is still to get a few clients by the end of 2019, and (hopefully) enough clients by the end of 2020 to at least cover the running costs of my home business. The major costs are the monthly fee to the AFSL ($1,150/mo), the monthly fee for Midwinter (admin) basic subscription (~$200/mo), and the costs of my uni studies (about $1,200/mo on average) and FPA and AFA memberships (~$100/mo).

The estimated value of my half of our home remained unchanged, as the local sales data was not updated last month, but the CoreData index of Sydney house prices showed a 1.5% gain during August, so it definitely appears that the decline in property prices has bottomed out after the two consecutive cuts in the cash rate by the RBA, and the introduction of personal income tax cuts by the Federal government.

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Net Worth: July 2019

My net worth total was marginally higher at the end of July (+$1,873 or 0.08% compared to last month) at $2,382,540. This was due to a significant increase in the balance of my retirement savings (SMSF and ColonialFirstState superannuation accounts) that was largely offset by a drop in the estimated value of our home. In reality, Sydney house prices stabilized during June/July, but this was masked by the fact that last month I didn't have updated local sale price data, so I had used the previous month's estimate. So I basically included the June decline in house price in the July figures.

My direct stock and managed fund investments (via margin loan accounts) also showed a slight decline during July, but the reality was the stock markets rose during July, but my net stock portfolio total also included some draw downs on my 'portfolio loan' for payment of uni fees, a monthly transfer of $1,500 to cover my financial planning business fixed costs, and payment for an unlisted investment of $4,215 in the company Adviser Ratings (via a crowdfunding campaign). Theoretically I should include the value of the Adviser Ratings shares in my portfolio, but I can't be bothered (it is probably also prudent to 'write down' the value of this investment to $0, as they are illiquid and of dubious value unless the company does well and eventually floats on the ASX (or gets sold to an investment company).

Overall, the stock market gains of 2019 have been largely consumed by my expenses relating to my financial planning business running costs (~$2,000/month) and my university fees (~$1,000/month) for the Master of Financial Planning degree. Hopefully within two years my business will have reached 'break even' and I will have completed the Masters degree (if I decide to continue on to do a PhD in financial planning the fees should be covered by RTS government funding).

The $7,900 valuation of the S type Jaguar I bought last year might also be optimistic - it has an electrical issue (the new battery keeps going flat within 1-2 weeks of being charged up - probably due to the fact the the brake lights stay on even when the engine is off and the key removed from the ignition!). This car is due for registration renewal this month, so I'll have to arrange for it to be towed to the local mechanic to get repaired and obtain an inspection report ('pink slip') so I can renew the registration before it expires... getting the car towed will be a little bit tricky as the anti-theft system locked up the steering when the battery was disconnected for charging, and the NRMA road service mechanics were unable to unlock the steering. So it will be hard for a tow truck to get it out of the garage and onto the street...

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Net Worth: June 2019

The positive performance of the Australian and global share markets during June resulted in my geared share portfolio gaining $22,317 (10.34%) and my superannuation savings rising by $40,058 (3.88%). I don't have new sales data for calculating our house price estimate this month, but the overall Sydney property market data showed practically no change in average prices during June, suggesting that the market has 'bottomed out' in response to the RBA lowering interest rates (which flowed on to home mortgage interest rates) and the election result ruling out the proposed changes to negative gearing that had been Labor policy. While most pundits don't expect a strong rebound in house prices during the remainder of 2019, I don't expect out home price estimate to be a major drag on my NW during the financial year (and may even have modest gains during 2020).

My NW estimate $2,336,288 rose $62,606 (2.75%) during June and has recovered to be within $2,500 of my previous all-time-high (in August 2018). While dropping interest rates suggest that the economy is weak (a negative for the prospects of the stock market), on the other hand they make dividends more attractive relative to bond yields, which may support stock prices. Hopefully the tax cut legislation will be passed this week, which should provide some economic stimulus during the latter part of 2019, and should help bolster consumer sentiment despite the ongoing lack of any significant real wage growth.

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Net Worth: May 2019

"Sell in May and go away" - one of the old stock market sayings that hadn't been reliable in recent years, but certainly would have been worth heeding towards the end of May 2019. My overall net worth declined by $39,729 (-1.72%) during May, which isn't much fun considering it is around half my annual after-tax salary, or the equivalent of my total expected start-up/running costs for my financial planning business for two years! The decline in the stock markets saw my geared share portfolio decline by -$8,310 (-3.71%) and my retirement savings decline by -$18,695 (-1.78%). While the rate of decline in the Sydney housing market appears to be slowing, our estimated house price was down by -$12,956 (-1.75%), the size of the drop being partly due to no sales data being available last month (so this was essentially two months of price change in one hit). The election result and the likely cut in interest rates by the RBA will hopefully put a floor under Sydney house prices.

The ongoing trade war between the US-China is expanding to include Europe and Mexico (Trump seems to think Tariffs are a multi-purpose blunt instrument to beat everyone into submission) is starting to look like it could bring an end to the US economic growth cycle just as the global economy is quite anemic. So in the current situation it doesn't look like the rest of 2019 is going to be particularly kind to my net worth situation.

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Net Worth: April 2019

The continued strength in the Australian and International share markets during the past month resulted in improved superannuation and  geared share portfolio valuations as at the end of April. Our house price valuation is unchanged as the suburb average sales data for our area had not been updated this month, but as the Sydney Index data from CoreLogic only showed a small fall in average sales prices for homes during April this should not have much impact on the total NW estimate. Overall my NW increased by $47,874 (or 2.11%) during April, not quite reaching a new 'peak NW' value.

I'm currently planning on remaining in my current job (unless I get retrenched - which is always a possibility in the modern workplace) while I get my Financial Planning business up and running, and try to achieve profitability while running it part-time in the evenings and weekends for the next 2-3 years (while finishing of the Master of Financial Planning degree and then possibly the CFP certification and start on a PhD in Financial Planning). Depending on how things look in 3-4 years time, I might either keep running the FP business part-time while keeping my full-time salaried job (until I reach 65 or so), or else see if I can reduce my salaried job to 4 days/week and increase the amount of time devoted to my own 'business'. I might also need to switch to 4 days/week if I commence PhD research part-time after completing the Master of FP degree, as I had found it quite difficult to spend enough time on my astrophysics research degree while also working full-time (one of the reasons I ended up 'dropping out' of my Master/PhD enrolment).

If the FP business is going well I'll probably think about 'retiring' from my salaried job when I around 65 and then continue to run my FP business for a while. How long I do that for will depend on a) if I still want to work (at least part-time) until 70+, b) if the business is profitable (and how profitable), and, most importantly, c) if I'm still healthy enough. One of my great-great-Aunts lived past 100, my father's parents both lived until almost 95, and my parents are both reasonably fit and active as they approach 90, so I have a realistic expectation of being able to continue working past 65. I do need to loose quite a lot of weight and do more exercise though! If the FP business is a going concern, I can probably sell it for around 2-2.5x annual revenues when/if I decide to retire. That might provide an extra 'nest egg' for my retirement, if I can get the business up and running ;)

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Net Worth: March 2019

There was a modest rise in the valuations of my retirement savings and geared shared portfolio (both up around 1.3%) which was offset by another -1.85% decline in the valuation of my half of our home. Overall, my net worth was almost unchanged, gaining $1,824 (0.08%) during the month to $2,265,537. Still below my all time peak, with my NW tracking sideways for the past 18 months or so.

Funding my university studies and running costs of my start-up financial planning business continue to cost around $2,500 per month. I completed the second course (out of twelve) for my Master of Financial Planning degree. So far I've received on HD and one D, with a GPA so far of 6.5/7 - coincidentally exactly the same as my average for the Master of Astronomy I did previously ;) I'm aiming to average 6.5 or above, and would like to get on the "Dean's List" each year and possibly get another academic medal for Masters by Coursework.

I didn't get my website finished off during March, so that is my immediate business development goal. I've printed off a couple of hundred brochures to direct mail to local addresses (I'll do the letter box deliveries myself, as I need the exercise) and will see if they achieve the typical response rate of 2-4% (ie. I should get around 2-4 phone calls or bookings for a free initial appointment for every 100 brochures I deliver). I plan of delivering around 50 brochures each week, testing minor variations, and hope to achieve around 4-8 responses per month, which *should* result in 1-2 new clients each month. Since I haven't had a client yet, this is all very theoretical at the moment.

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Net Worth: FEB 2019

The continued rebound in local and international share markets meant that my retirement savings balance increased $43,045 (4.47%) and my geared share portfolio increased $29,660. The continued deflation of the property bubble nationwide, and especially Sydney, meant that the gain in my share portfolio was somewhat offset by the valuation of our home decreasing by $4,198 (0.55%) during the month. The rate of decline in house prices appears to be moderating slightly, suggesting a normal house price cyclical decline rather than a 'crash' or deflation of a 'bubble'. Overall, my net worth recovered $68,732 (3.13%) during the month to $2,263,713. Still below my all time peak.

Funding my university studies and running costs of my start-up financial planning business continue to cost around $2,500 per month. I received my annual bonus last month (approx. $9K after tax), which will help with cash flow for a while. I setup a free business entry in the 'yellow pages' yesterday and was immediately called by a couple of charity fund-raisers this morning seeking sponsorship/advertising support this morning. I agreed to sponsor the local Neighbourhood Watch (via a $440 ad in the local youth support magazine they produce annually) but I will have to decline supporting any other local groups (at least until I have my first paying client!) I'm still working on the website for my business, but should get that up and running by the end of March.

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Net Worth: JAN 2019

A rebound in local and international share markets meant that my retirement savings balance increased $42,724 (4.64%) and my geared share portfolio increased $19,533. The continued deflation of the property bubble nationwide, and especially Sydney, meant that the gain in my share portfolio was more or less offset by the valuation of our home decreasing by $18,397 (2.37%) during the month. Overall, my net worth recovered $44,081 (2.05%) during the month to $2,194,981. Still well below my all time peak.

I've started using some of the credit available in my St George 'portfolio loan' facility to fund my financial planning expenses (the self-education costs of the Masters degree, and the monthly licencee fee and CRM/admin package fee for the basic module of 'Midwinter'). Until I start receiving some client fee income, this debt will accrue at a rate of about $2,430 per month. Using the one loan facility to fund the major business running costs and self-education costs will make it easy to keep track of the amount of (tax deductible) interest I pay.

My goal is to start generating business income during 2019, and to generate enough business income during 2020 to cover running costs ('break even'). Hopefully by 2021 the business will be profitable, or at least cover the running costs and related self-education costs (the Masters, then possible a MRes degree followed by a PhD in Financial Planning). We'll see how things pan out.

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Net Worth: Dec 2018

Another negative month, with my geared share portfolio and retirement savings balances each dropping by more than $20K, while our house price estimate stabilized. Still waiting (and hoping) that the global stock market 'correction' is over, but it appears that there may be further weakness ahead. The Australian economy is still growing quite well, so there may soon be a buying opportunity. Our Superannuation is already fully invested in growth, but my gearing is currently very low, so I could use my available margin loan facilities to invest in the local stock market when it seems to have reached the 'bottom'. However, as I am currently funding around $1,200 per month for my Financial Planning registration fees (without any clients so far) from my wage cash flow, I don't really want to add margin loan interest payments at this stage.

My goals for 2019 are:
- lose weight and exercise more (a perennial goal it seems) - I'm currently ~108kg and need to lose about 30-35kg! I also need to start using the Gym membership I took out in July...
- startup my financial planning business and get my first clients during 2019 (my target is 1 per month)
- complete the two 'specialisation' modules ('Self-Managed Superannuation Funds' and 'Margin Lending') that I enrolled in when I finished the Diploma of Financial Planning course in early December
- start and complete the Adavanced DFP course that I enrolled in recently
- complete the four courses for the Master of Financial Planning degree I've enrolled in for 2019 (1 per quarter).

So, it looks like I'll be quite busy during 2019 ;)

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Net Worth: Nov 2018

Another negative month, with my geared share portfolio and retirement savings balances each dropping by about $10K, and our house price estimate declining by about $10K (so my share dropped about $5K). The global (and local) stock markets recovered a bit yesterday (due to the 'ceasefire' in the US-China trade 'war'). Whether the 'correction' is over is anyone's guess. Hopefully the markets will have decent performance over the next 5-10 years until I 'retire' (the past ten years haven't been too flash). The Sydney housing market looks likely to continue to decline for another 12-18 months, so that won't be helping my net worth figures during 2019.

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Net Worth: October 2018

Things that make you go hmmmm...

Oh well, the random walk down wall street took us head-first into a lamp-post last month. My NW is back down to where it was in September 2017, having dropped almost $100,000 during October. Up by the stairs, down by the elevator, as they say. It could have been even worse if I hadn't sold up a lot of my geared share holdings in June, so thank Plutus I decided to de-leverage rather than gear-up. The poor stock market performance was complimented by the continued decline in house prices in Sydney, so the only positive contribution to my net worth during October was the $225 reduction in our home mortgage.

Although I'd been aware of the market 'correction' happening during October, I didn't really pay much attention as I've been busy trying to finish off my assignments for the Diploma of Financial Planning course I'm doing (nearly there!) and the first subject of the Masters in Financial Planning course I'm enrolled in this semester. The Hayne Royal commission interim report has been laying bare the rampant greed and unethical behavior in the financial planning 'industry' in Australia, with the Big 4 banks coming in for special attention, along with the large financial planning 'groups' like IOOF and AMP. Several well-known ('celebrity') financial planners/firms closed up shop after having to front the Royal Commission. Combined with the major changes to regulation and education requirements for 'financial planners' coming into effect on 1 Jan 2019 I expect a lot of the 'old school' planners will be exiting the 'industry' during the next few years. Many of them had business models reliant of hefty commissions received when selling life insurance products, which is being wound back and is under pressure to be completely eliminated (like commissions on non-insurance investment products), and they would struggle to move to a fee-for-service business model. In addition, many of them do not have a uni degree, so would have to go 'back to school' to meet the education requirements for existing planners by the 2024 deadline. I'm trying to get my DFP and become a 'registered' financial planner before 31 Dec so I don't have to meet the supervision requirements for 'new' planners that comes into effect on 1 Jan 2019. There seems to have been a recent addition of the category 'career changer' that might spare me from the supervision requirement if I don't get registered before 1 Jan 2019, but it isn't clearly defined, and I'd still need to complete the Graduate Diploma in Financial Planning before being able to get registered in that case. So, full steam ahead with finishing off my DFP asap...

Hopefully the changes will 'professionalize' the financial planning industry in the next few years, and the exodus of existing planners and barriers to entry for new planners may reduce competition and increase demand - all good things for my intention to set up my own (part-time) financial planning business next year. We'll see how it goes.

ps. no diet updates at the moment, as I haven't been sticking to my diet plan, and haven't had time to go to the gym. Hopefully I'll get back on track after my uni exam at the end of this month.

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