November saw my net worth increase by 1.1%. Investments were pretty flat but i increased my property value and had some savings despite higher expenses.
The value of my investment portfolio was up 0.6%. There is still a fair amount of volatility in the markets but over the course of a month it ended up fairly flat. It was a decent month for dividends, although there were no new investments.
Pension unit prices were also fairly flat for the month.
Rental income on both properties was paid in full & although one was slightly late. This is the first time i've had a late rental payment but it looks like an innocent mistake. I increased the recorded value of one of my properties following continual increases in the local market. The new value is still around 8-10% lower than the supposed 'market value' but i prefer to lag market trends and also like to keep the value at a slight discount, reflecting likely costs associated with any future sale.
Cash balances were higher although savings were lower than average following some travel.
Year to date net worth growth: 17%
Year to date savings rate: 66%
Tuesday, 1 December 2015
Friday, 30 October 2015
October 2015 Review
October saw my net worth increase by 1.7%, with a rebound in equities and pension fund values along with a good level of savings.
The value of my investment portfolio was up over 2.5%, with increases across most markets, albeit with a slight pull back at the end of the month. There were also a lot of dividends received during the month, but no major investments.
Pension unit prices increased by close to 4%, following global equities markets higher.
Rental income on both properties was paid in full & on time with one small maintenance bill.
Cash balances were higher with good savings and no major investments or expenses.
Year to date net worth growth: 16%
Year to date savings rate: 67%
The value of my investment portfolio was up over 2.5%, with increases across most markets, albeit with a slight pull back at the end of the month. There were also a lot of dividends received during the month, but no major investments.
Pension unit prices increased by close to 4%, following global equities markets higher.
Rental income on both properties was paid in full & on time with one small maintenance bill.
Cash balances were higher with good savings and no major investments or expenses.
Year to date net worth growth: 16%
Year to date savings rate: 67%
Tuesday, 29 September 2015
September 2015 Review
September saw my net worth increase by 0.3%, once again most of my savings for the month were wiped out by falls in investment and pension values.
The value of my investment portfolio was down over 1%. Again it was a volatile month with falls across most markets. I made a couple of small additions to existing HK & UK index ETFs. Dividends were strong and seemingly not affected by price volatility, which is reassuring given this is predominantly a buy and hold dividend portfolio.
Pension unit prices fell by over 1% , the falls were broadly in line with wider markets although one fund is more heavily exposed to HK.
Rental income on both properties was paid in full & on time. I've just renewed the lease on my older property at slightly higher rent.
Cash balances were slightly higher as savings from income slightly exceeded new investments. Expenses were about average, including some planned travel.
Year to date net worth growth: 14.1%
Year to date savings rate: 68%
The value of my investment portfolio was down over 1%. Again it was a volatile month with falls across most markets. I made a couple of small additions to existing HK & UK index ETFs. Dividends were strong and seemingly not affected by price volatility, which is reassuring given this is predominantly a buy and hold dividend portfolio.
Pension unit prices fell by over 1% , the falls were broadly in line with wider markets although one fund is more heavily exposed to HK.
Rental income on both properties was paid in full & on time. I've just renewed the lease on my older property at slightly higher rent.
Cash balances were slightly higher as savings from income slightly exceeded new investments. Expenses were about average, including some planned travel.
Year to date net worth growth: 14.1%
Year to date savings rate: 68%
Monday, 31 August 2015
August 2015 Review
August saw my net worth fall by 1%, with a terrible month in the equities markets resulting in falls in my investment portfolio and pension funds. This was my worst month on record, with the poor investment performance more than offsetting monthly savings. However i get some comfort in knowing it could have been a lot worse. With roughly two thirds of my assets in property and cash i'm somewhat protected from the recent volatility, and if anything, view it more as a buying opportunity.
The value of my investment portfolio was down over 4%, and over the last 3 months it has fallen by over 9%. Again it was a volatile month, but generally emerging markets and asia performed very badly, which then spread to global markets. I increased my holdings of a global high yield ETF (VHYL) along with some HK & UK based equities. I also subscribed to the latest HK ibond, albeit only receiving a small allotment. The markets picked up a bit in the last week of August, but still look quite vulnerable.
Pension unit prices fell by over 6% and are now firmly negative for the year. The falls were broadly in line with wider markets although one fund is more heavily exposed to HK.
Property rental income was paid in full & on time. I received my first monthly rent from the new property although much of this was offset by expected start up costs.
Cash balances were lower as i tried to add to the investment portfolio as the markets fell. Expenses were broadly in line with expectations.
Year to date net worth growth: 13.8%
Year to date savings rate: 69%
The value of my investment portfolio was down over 4%, and over the last 3 months it has fallen by over 9%. Again it was a volatile month, but generally emerging markets and asia performed very badly, which then spread to global markets. I increased my holdings of a global high yield ETF (VHYL) along with some HK & UK based equities. I also subscribed to the latest HK ibond, albeit only receiving a small allotment. The markets picked up a bit in the last week of August, but still look quite vulnerable.
Pension unit prices fell by over 6% and are now firmly negative for the year. The falls were broadly in line with wider markets although one fund is more heavily exposed to HK.
Property rental income was paid in full & on time. I received my first monthly rent from the new property although much of this was offset by expected start up costs.
Cash balances were lower as i tried to add to the investment portfolio as the markets fell. Expenses were broadly in line with expectations.
Year to date net worth growth: 13.8%
Year to date savings rate: 69%
Saturday, 29 August 2015
Market volatility
After a fairly soft June & July in the markets, August has been pretty awful. Concerns have shifted from Greece to China and emerging markets in general, with significant falls in currencies (verses the us dollar) and equities.
Whilst it is pretty depressing to see my investment portfolio and pension funds fall in value, i'm trying to see the positive side of recent events. My investment strategy continues to be buy & hold well diversified ETFs with a focus on yield. I have no intention so sell anything and as such should not realise any actual losses. If anything, i'm viewing the falling markets as an opportunity to add to the portfolio whilst prices are low.
In recent months i've been adding to emerging markets and asian focused ETFs, which have been the hardest hit. Whilst it is tempting to keep on buying these at low prices, i'm instead focusing my attention at the moment more on the UK, US & Europe equities, which have also been dragged lower by the general concerns about China and the global economy, but in my opinion remain fairly healthy.
The main thing holding me back from some more significant additions to the investment portfolio is a lack of cashflow. After recently completing a property purchase my cash reserves are relatively low and much is tied up in longer tenor time deposits to boost yield. This is forcing me to take a slow and steady approach to investing, which is not a bad thing with such volatility and uncertainty in the markets.
Whilst it is pretty depressing to see my investment portfolio and pension funds fall in value, i'm trying to see the positive side of recent events. My investment strategy continues to be buy & hold well diversified ETFs with a focus on yield. I have no intention so sell anything and as such should not realise any actual losses. If anything, i'm viewing the falling markets as an opportunity to add to the portfolio whilst prices are low.
In recent months i've been adding to emerging markets and asian focused ETFs, which have been the hardest hit. Whilst it is tempting to keep on buying these at low prices, i'm instead focusing my attention at the moment more on the UK, US & Europe equities, which have also been dragged lower by the general concerns about China and the global economy, but in my opinion remain fairly healthy.
The main thing holding me back from some more significant additions to the investment portfolio is a lack of cashflow. After recently completing a property purchase my cash reserves are relatively low and much is tied up in longer tenor time deposits to boost yield. This is forcing me to take a slow and steady approach to investing, which is not a bad thing with such volatility and uncertainty in the markets.
Property update
My new investment property is now occupied, with tenants moving in earlier in August. The rent was at the high end of expectations, with a gross yield close to 6.5%. The combined yield of my properties after agency fees, regular costs and taxes is around 4%.
Property is once again my largest asset class at around 44% of total assets. The investment reduced my cash position to around 28% of total assets, much closer to my long term target of around 20%.
The only slight concern is the tenancy agreement is only for 6 months. I'm hoping this will be extended, but if not it could mean a load more agency costs on a more regular basis than i would hope for.
Also some good news with my other property. The existing tenant has just signed up for another year, with a rent increase of 4%. This is particularly good news as it means there shouldn't be any immediate need for any maintenance costs / refurbishment. In the 5 years or so of renting out this property it has only been vacant for about 5 days between tenancies.
Property is once again my largest asset class at around 44% of total assets. The investment reduced my cash position to around 28% of total assets, much closer to my long term target of around 20%.
The only slight concern is the tenancy agreement is only for 6 months. I'm hoping this will be extended, but if not it could mean a load more agency costs on a more regular basis than i would hope for.
Also some good news with my other property. The existing tenant has just signed up for another year, with a rent increase of 4%. This is particularly good news as it means there shouldn't be any immediate need for any maintenance costs / refurbishment. In the 5 years or so of renting out this property it has only been vacant for about 5 days between tenancies.
Friday, 31 July 2015
July 2015 Review
July saw my net worth fall by 0.1%, with a second bad month in a row for my investments pensions wiping out all my savings in the month. Expenses here higher than usual too.
The value of my investment portfolio was down just under 2%, wiping out all the year to date gains, even after dividends. Again it was a volatile month, but generally emerging markets and asia performed badly. I topped up my HK, emerging markets and Europe investments, whilst Europe seemed to stabilise, emerging markets continued to fall.
Pension unit prices fell by over 2% in a second poor month in a row. The falls were broadly in line with wider markets.
Property rental income was paid in full & on time. Whilst my new property remains vacant some potential tenants have been identified and i'm hoping they'll me moving in and paying rent in August.
Cash balances were flat, with savings invested in ETFs. Expenses were higher than planned, partly a one off but i do need to monitor some monthly costs which seem to be creeping up.
Year to date net worth growth: 14.9%
Year to date savings rate: 71%
The value of my investment portfolio was down just under 2%, wiping out all the year to date gains, even after dividends. Again it was a volatile month, but generally emerging markets and asia performed badly. I topped up my HK, emerging markets and Europe investments, whilst Europe seemed to stabilise, emerging markets continued to fall.
Pension unit prices fell by over 2% in a second poor month in a row. The falls were broadly in line with wider markets.
Property rental income was paid in full & on time. Whilst my new property remains vacant some potential tenants have been identified and i'm hoping they'll me moving in and paying rent in August.
Cash balances were flat, with savings invested in ETFs. Expenses were higher than planned, partly a one off but i do need to monitor some monthly costs which seem to be creeping up.
Year to date net worth growth: 14.9%
Year to date savings rate: 71%
Monday, 29 June 2015
June 2015 Review
June saw my net worth increase by 0.2%, with a very bad month for investments just about offset by savings and property valuations.
The value of my investment portfolio was down over 3%, and this was after taking into account a lot of dividends received in the month. There was a lot of volatility during June, with a sharp drop at the month end given market concerns about Greece possibly exiting the Euro. I made one small purchase in the month an may look to make further purchases in July if opportunities arise.
Pension unit prices fell by over 1% and with the usual time lag i expect them to fall further in early July.
Property rental income was paid in full & on time. I've recorded a further small increase in the value of my existing property and added a new property at its purchase price less the costs that would be involved in selling it again. I'm hoping to increase the rent on my original property later in the year and will look to get the new property on the rental market in a couple of weeks.
Cash balances were materially lower following the completion of a property investment. Expenses were high due to the property purchase and some travel, but i did manage to maintain a reasonable savings rate.
Year to date net worth growth: 15%
Year to date savings rate: 73%
The value of my investment portfolio was down over 3%, and this was after taking into account a lot of dividends received in the month. There was a lot of volatility during June, with a sharp drop at the month end given market concerns about Greece possibly exiting the Euro. I made one small purchase in the month an may look to make further purchases in July if opportunities arise.
Pension unit prices fell by over 1% and with the usual time lag i expect them to fall further in early July.
Property rental income was paid in full & on time. I've recorded a further small increase in the value of my existing property and added a new property at its purchase price less the costs that would be involved in selling it again. I'm hoping to increase the rent on my original property later in the year and will look to get the new property on the rental market in a couple of weeks.
Cash balances were materially lower following the completion of a property investment. Expenses were high due to the property purchase and some travel, but i did manage to maintain a reasonable savings rate.
Year to date net worth growth: 15%
Year to date savings rate: 73%
Property purchase complete
I've now completed the purchase of a new rental property. The cost was a lot less than my existing rental property due to its location away from big cities, but knowing the area, the property should be ideal for young families close to a local school.
I expect the net yield after costs and tax to be around 4%, which is higher than my existing property yield, although it probably doesn't have as much potential for capital appreciation.
There are a few odd jobs to complete but i hope to have it on the market with 2 weeks. I had not fully factored in the costs associated with the purchase into my annual plan, so June expenses were higher than usual.
This has helped to reduce my cash reserves to under 30% of net worth, the lowest proportion it has been for around 3 years.
I expect the net yield after costs and tax to be around 4%, which is higher than my existing property yield, although it probably doesn't have as much potential for capital appreciation.
There are a few odd jobs to complete but i hope to have it on the market with 2 weeks. I had not fully factored in the costs associated with the purchase into my annual plan, so June expenses were higher than usual.
This has helped to reduce my cash reserves to under 30% of net worth, the lowest proportion it has been for around 3 years.
3101.HK purchased
After a long while away from investing, the problems in Greece seem to be presenting some potential buying opportunities.
This triggered some research to see if there are any new ETFs on the market that fit my portfolio aims of a decent yield and broad diversification. I was pleased to find Vanguard have expanded their range of low cost ETFs listed in HK. Whilst i wasn't trying to catch a falling knife just yet, i couldn't resist a small purchase of 3101.HK, a HK listed Europe ETF. The costs are lower than the UK listed ETF i had been using for Europe exposure, and it should yield well over 3%.
The purchase pre-dates the recent increasing severity of the Greece situation so this may start somewhat underwater, but the size was very small and i'll keep an eye on the market and look for opportunities to add to either this or other positions.
Purchase price: HKD18.58
Sunday, 31 May 2015
May 2015 Review
May saw my net worth increase by 1.1%, due to positive savings and higher pension & property valuations.
The value of my investment portfolio was down around 0.5%, with decreases in Europe and emerging markets ETFs. There were a number of dividends received in the month, but not enough to offset the lower portfolio value.
My pension fund unit values were up around 1% in what seemed to be quite a volatile month.
Property rental income was paid in full & on time. I've recorded a small increase in the value of my existing property following a recent valuation. My new property investment is expected to complete in June or July, at which point i'll be looking to rent it out as soon as possible.
Cash balances were higher, with average savings and no new investments. There was a reasonable amount of planned travel expense in the month.
Year to date net worth growth: 15%
Year to date savings rate: 76%
The value of my investment portfolio was down around 0.5%, with decreases in Europe and emerging markets ETFs. There were a number of dividends received in the month, but not enough to offset the lower portfolio value.
My pension fund unit values were up around 1% in what seemed to be quite a volatile month.
Property rental income was paid in full & on time. I've recorded a small increase in the value of my existing property following a recent valuation. My new property investment is expected to complete in June or July, at which point i'll be looking to rent it out as soon as possible.
Cash balances were higher, with average savings and no new investments. There was a reasonable amount of planned travel expense in the month.
Year to date net worth growth: 15%
Year to date savings rate: 76%
Thursday, 30 April 2015
April 2015 Review
April saw my net worth increase by 1.4%, with strong savings, pension & investment performance.
The value of my investment portfolio was around 2% higher, despite a fall in the last couple of days. Equities and currencies (with affect a number of my ETFs) have been very volatile in the past week or so, so i'm on the look out for investment opportunities (despite most of my cash being tied up in a potential property purchase).
My pension fund unit values were up around 3% following a strong month in a number of major equities markets.
Property rental income was paid in full & on time. A new property investment is in progress but i expect it will take a few months to complete. There are likely to be some one off costs associated with the purchase but all should easily be absorbed by monthly savings.
Cash balances were lower following a tax payment and a small investment, although savings were quite reasonable. Income was strong but this was offset by some travel and entertainment costs during the month.
Year to date net worth growth: 14%
Year to date savings rate: 79%
The value of my investment portfolio was around 2% higher, despite a fall in the last couple of days. Equities and currencies (with affect a number of my ETFs) have been very volatile in the past week or so, so i'm on the look out for investment opportunities (despite most of my cash being tied up in a potential property purchase).
My pension fund unit values were up around 3% following a strong month in a number of major equities markets.
Property rental income was paid in full & on time. A new property investment is in progress but i expect it will take a few months to complete. There are likely to be some one off costs associated with the purchase but all should easily be absorbed by monthly savings.
Cash balances were lower following a tax payment and a small investment, although savings were quite reasonable. Income was strong but this was offset by some travel and entertainment costs during the month.
Year to date net worth growth: 14%
Year to date savings rate: 79%
Thursday, 23 April 2015
IAPD.L Purchased
After spending most of the year sitting on the sidelines & watching most equities markets rally, i've decided to re-enter the market to top up an existing holding.
IAPD is an Asia Pacific high dividend ETF, with a heavy weighting towards Australia & New Zealand. Its price has fallen recently, i think largely due to fx movements, as the Australian Dollar has weakened to a multi year low against GBP.
It yields well over 5%, and my long term views for Australia remain positive given its core economic strength. It therefore offered relatively good value in comparison to the other main core holdings in my portfolio, and now becomes one of the largest individual holdings.
The purchase price of this tranche was around GBP20.05.
IAPD is an Asia Pacific high dividend ETF, with a heavy weighting towards Australia & New Zealand. Its price has fallen recently, i think largely due to fx movements, as the Australian Dollar has weakened to a multi year low against GBP.
It yields well over 5%, and my long term views for Australia remain positive given its core economic strength. It therefore offered relatively good value in comparison to the other main core holdings in my portfolio, and now becomes one of the largest individual holdings.
The purchase price of this tranche was around GBP20.05.
Wednesday, 1 April 2015
Property investment update - offer accepted
I've mentioned a few times in the last year my plans to use some of my cash reserves to add a new property investment to my assets.
This is partly due to a positive experience with my existing property investment, partly my reluctance to materially increase my stock market investments, and partly due to my desire to earn a greater yield than that available on cash. My cash reserves have also been well above my target for some time.
Following some on and off research starting last summer i've finally got around to putting in an offer on a property, which has just been accepted.
In terms of numbers, it isn't huge, but does yield well above my existing property with a potential gross yield over 6% and a net yield after taxes & costs over 4%. It looks to be in excellent condition so it should be possible to get it onto the rental market quickly after completion.
Away from the numbers, i found it refreshingly easy & emotionless bidding for a property purely as an investment rather than somewhere i would be living. Hopefully the legal side will run as smoothly over the coming weeks.
This is partly due to a positive experience with my existing property investment, partly my reluctance to materially increase my stock market investments, and partly due to my desire to earn a greater yield than that available on cash. My cash reserves have also been well above my target for some time.
Following some on and off research starting last summer i've finally got around to putting in an offer on a property, which has just been accepted.
In terms of numbers, it isn't huge, but does yield well above my existing property with a potential gross yield over 6% and a net yield after taxes & costs over 4%. It looks to be in excellent condition so it should be possible to get it onto the rental market quickly after completion.
Away from the numbers, i found it refreshingly easy & emotionless bidding for a property purely as an investment rather than somewhere i would be living. Hopefully the legal side will run as smoothly over the coming weeks.
Monday, 30 March 2015
March 2015 Review
March saw my net worth increase by 8.9%, mainly a result of larger than expected lump sum income.
The value of my investment portfolio was around 1% higher, with a lot of volatility during the month. There were no new purchases as i struggle to see value following rallies across most markets. A lot of my ETFs also paid dividends during the month.
My pension fund unit values were fairly flat, there seems to be some time lag for equities market movements flowing into to the pension unit prices, so these don't always move in line with the market on a day to day basis. They are up over 4% for the year though, which is consistent with the year to date increase in my investment portfolio.
Property rental income was paid in full & on time. I've been actively pursuing new property investments during the month. I'll separately post about these should there be any progress.
Cash balances were materially higher due to a large lump sum income. I've spent a lot of time this month updating how i manage my cash in light of this increase. This has seen all funds not being held back for emergencies & investments being placed in longer term time deposits at higher interest rates. That being said, i've kept a lot of cash available at short notice for a potential property investment, so the overall cash yield has stayed fairly flat.
The spike in income has temporarily distorted up my year to date savings rate to 82%. This should drift back down towards 60% as the year progresses.
Year to date net worth growth: 12%
Year to date savings rate: 82%
The value of my investment portfolio was around 1% higher, with a lot of volatility during the month. There were no new purchases as i struggle to see value following rallies across most markets. A lot of my ETFs also paid dividends during the month.
My pension fund unit values were fairly flat, there seems to be some time lag for equities market movements flowing into to the pension unit prices, so these don't always move in line with the market on a day to day basis. They are up over 4% for the year though, which is consistent with the year to date increase in my investment portfolio.
Property rental income was paid in full & on time. I've been actively pursuing new property investments during the month. I'll separately post about these should there be any progress.
Cash balances were materially higher due to a large lump sum income. I've spent a lot of time this month updating how i manage my cash in light of this increase. This has seen all funds not being held back for emergencies & investments being placed in longer term time deposits at higher interest rates. That being said, i've kept a lot of cash available at short notice for a potential property investment, so the overall cash yield has stayed fairly flat.
The spike in income has temporarily distorted up my year to date savings rate to 82%. This should drift back down towards 60% as the year progresses.
Year to date net worth growth: 12%
Year to date savings rate: 82%
Friday, 27 February 2015
February 2015 Review
February saw my net worth increase by 1.3%, mainly a result of strong pensions performance and high savings.
The value of my investment portfolio was flat, with only a small amount of dividends and no significant investments during the month. Many equities markets are looking quite high at the moment (with a new high reached in the FTSE100), so i'm sitting on the sidelines for now.
My pension fund unit values increased by around 2% from strength in the HK and UK equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with healthy income, low expenses and a lower tax accrual (i'd over accrued). Cash should spike up again in March from an expected lump sum of income.
Year to date net worth growth: 2.8%
Year to date savings rate: 61%
The value of my investment portfolio was flat, with only a small amount of dividends and no significant investments during the month. Many equities markets are looking quite high at the moment (with a new high reached in the FTSE100), so i'm sitting on the sidelines for now.
My pension fund unit values increased by around 2% from strength in the HK and UK equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with healthy income, low expenses and a lower tax accrual (i'd over accrued). Cash should spike up again in March from an expected lump sum of income.
Year to date net worth growth: 2.8%
Year to date savings rate: 61%
Thursday, 29 January 2015
January 2015 Review
January saw my net worth increase by 1.5%, mainly a result of a good month for my investments & lower expenses.
The value of my investment portfolio increased by around 3% with strong performance across many markets, albeit with increased volatility and some pull backs at the end of the month. Favourable fx movements also impacted the value of a number of my ETFs. There were no notable investments during the month.
I also updated the fx rates used to assess net worth, following further strengthening of HKD & USD against GBP. This had a favourable impact.
My pension fund unit values increased around 2% from strength in equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with healthy income & relatively low expenses to start the year. Lets hope the rest of the year continues in this manner.
Year to date net worth growth: 1.5%
Year to date savings rate: 54%
The value of my investment portfolio increased by around 3% with strong performance across many markets, albeit with increased volatility and some pull backs at the end of the month. Favourable fx movements also impacted the value of a number of my ETFs. There were no notable investments during the month.
I also updated the fx rates used to assess net worth, following further strengthening of HKD & USD against GBP. This had a favourable impact.
My pension fund unit values increased around 2% from strength in equities markets.
Property rental income was paid in full & on time.
Cash balances were higher, with healthy income & relatively low expenses to start the year. Lets hope the rest of the year continues in this manner.
Year to date net worth growth: 1.5%
Year to date savings rate: 54%
Sunday, 25 January 2015
2015 Planning
Looking ahead to 2015, i'm hopeful it can be another successful year for my personal finances.
Based on my projections i'm expecting a fairly similar year to 2014 in terms of income & expenses. This would translate to a net worth growth of roughly 15% and a savings rate just over 60%. Whilst employment income is to some extent uncertain, it is comforting to see my passive income (from property investments & cash) continue to grow as my asset base grows.
In expenses, there may be some increases as the rental contract on my current accommodation is due for renewal. In addition, travel and other personal expenses are somewhat uncertain at this stage, although nothing major is planned.
Regarding my investment outlook, i'm conscious of the recent rallies across many equities markets, which may slow down the rate of growth in my investment portfolio. However, i'll be looking to take advantage of any market corrections.
In addition, it is looking more likely that i'll make a further property investment during the year, as i look to manage down my cash reserves, which are currently running at around 34% of total assets.
Away from personal finances, i'll also be continuing my long standing objective of improving fitness, which has proved less successful than my financial objectives in recent years!
Saturday, 3 January 2015
2014 Annual Review
2014 was another great year for my finances. Here's a more detailed review of the year:
Net worth:
Net worth grew by 28%, well ahead of the 17% i had planned. The main reasons for the higher growth were strong performance across all asset categories, along with higher than expected income. Within the year, each individual month also resulted in positive net worth growth. FX movements were fairly neutral, worsening during the first half of the year but then improving rapidly towards the end of the year.
Savings rate:
This was 64% for the full year (calculated by residual savings after all expenses and tax, divided by gross income). The was almost exactly in line with plan (63%), however given income was higher, this demonstrates that expenses were also higher than expected.
Income:
Income was well ahead of plan, mainly through higher employment income. Interest on cash and dividends from investments were also higher, as i continued to grow my asset base and invest in higher yielding products.
Expenses:
Expenses were around 10% ahead of plan, mainly due to slightly higher travel costs and a few personal treats. I made a conscious decision to improve my quality of life in a few areas (in particular travel), given continually higher income and an already very healthy savings rate. I expect this to continue at a similar level going forward.
Property:
The value of my rental property continued to increase materially (up around 15% in 2014) and remained fully occupied for the full year. In terms of income & capital growth, my property has returned well over 15% a year for the last 4 years, and continues to be my most successful asset category. I am considering additional property investments for 2015.
Investment portfolio:
The size of my portfolio grew by around 50% with regular investments throughout the year, mainly adding to existing ETFs. The annual return (capital plus income) was roughly 9%, a lot better than the prior year, with particular strength in US, Europe & China equities, partly offset by weakness in emerging markets.
Pension funds:
In additional to regular monthly contributions, unit values increased by around 8.5% during the year, driven by increases in global equities markets.
Cash:
Despite a number of investments during the year, cash continued to grow and remains above my desired asset allocation. This is mainly a result of strong income and a high savings rate. I've been pushing the maturity profile out a bit further to boost the average cash yield to over 2.5%, but still keeping a large amount of cash immediately available for investment opportunities.
So in conclusion, net worth, savings and all asset categories exceeded expectations for the year, making it a very successful year. I'll post separately on the outlook for 2015.
Net worth:
Net worth grew by 28%, well ahead of the 17% i had planned. The main reasons for the higher growth were strong performance across all asset categories, along with higher than expected income. Within the year, each individual month also resulted in positive net worth growth. FX movements were fairly neutral, worsening during the first half of the year but then improving rapidly towards the end of the year.
Savings rate:
This was 64% for the full year (calculated by residual savings after all expenses and tax, divided by gross income). The was almost exactly in line with plan (63%), however given income was higher, this demonstrates that expenses were also higher than expected.
Income:
Income was well ahead of plan, mainly through higher employment income. Interest on cash and dividends from investments were also higher, as i continued to grow my asset base and invest in higher yielding products.
Expenses:
Expenses were around 10% ahead of plan, mainly due to slightly higher travel costs and a few personal treats. I made a conscious decision to improve my quality of life in a few areas (in particular travel), given continually higher income and an already very healthy savings rate. I expect this to continue at a similar level going forward.
Property:
The value of my rental property continued to increase materially (up around 15% in 2014) and remained fully occupied for the full year. In terms of income & capital growth, my property has returned well over 15% a year for the last 4 years, and continues to be my most successful asset category. I am considering additional property investments for 2015.
Investment portfolio:
The size of my portfolio grew by around 50% with regular investments throughout the year, mainly adding to existing ETFs. The annual return (capital plus income) was roughly 9%, a lot better than the prior year, with particular strength in US, Europe & China equities, partly offset by weakness in emerging markets.
Pension funds:
In additional to regular monthly contributions, unit values increased by around 8.5% during the year, driven by increases in global equities markets.
Cash:
Despite a number of investments during the year, cash continued to grow and remains above my desired asset allocation. This is mainly a result of strong income and a high savings rate. I've been pushing the maturity profile out a bit further to boost the average cash yield to over 2.5%, but still keeping a large amount of cash immediately available for investment opportunities.
So in conclusion, net worth, savings and all asset categories exceeded expectations for the year, making it a very successful year. I'll post separately on the outlook for 2015.
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