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%
Thursday, 29 January 2015
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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