December saw my net worth flat, as investment gains and savings were offset by updating the fx rates used on my assets. In particular GBP has strengthened around 5% against USD & HKD since i last updated the rate, so the value of all my HKD & USD assets dropped when translated back to my base currency GBP.
The value of my investment portfolio was flat. Whilst equities performed strongly, the fx adjustment offset these gains.
Pension unit values were also flat, with valuation increases offset by fx adjustments.
Property income was good. One property remains unoccupied, whilst there have been viewing the market tends to be flat over the holiday period. There's a potentially large maintenance expense currently under discussion which may happen in early 2018. I'm also looking into additional potential property investments given my growing cash position.
Cash balances were higher with strong income and reasonable expenses considering a lot of travel and the holiday season. A full 2017 report will follow.
Year to date net worth growth: 20.3%
Year to date savings rate: 67%
Saturday, 30 December 2017
Monday, 27 November 2017
November 2017 Review
November saw my net worth increase by 1% driven by good income, lower expenses and investment gains
The value of my investment portfolio was fairly flat. Equities seemed a bit more choppy and some fx swings made it difficult to read underlying performance. I am considering stepping back into the market in a targeted manner if i see any pockets of value, but it is unlikely to be significant in scale.
Pension unit values were also around 2% higher although there has been some volatility in valuations
Property income was lower than usual but most of that was timing as i've had to close the month-end early. After quite a lot of maintenance work my one empty property is back on the market with viewings arranged. I'm considering another property investment in the new year, yields are holding up well and prices seem steady in my target locations.
Cash balances were higher on good income and more typical expenses. Cash is back above 30% of total assets which is usually an indicator to invest, with property looking more likely than equities at this stage.
Year to date net worth growth: 20.4%
Year to date savings rate: 68%
The value of my investment portfolio was fairly flat. Equities seemed a bit more choppy and some fx swings made it difficult to read underlying performance. I am considering stepping back into the market in a targeted manner if i see any pockets of value, but it is unlikely to be significant in scale.
Pension unit values were also around 2% higher although there has been some volatility in valuations
Property income was lower than usual but most of that was timing as i've had to close the month-end early. After quite a lot of maintenance work my one empty property is back on the market with viewings arranged. I'm considering another property investment in the new year, yields are holding up well and prices seem steady in my target locations.
Cash balances were higher on good income and more typical expenses. Cash is back above 30% of total assets which is usually an indicator to invest, with property looking more likely than equities at this stage.
Year to date net worth growth: 20.4%
Year to date savings rate: 68%
Sunday, 29 October 2017
October 2017 Review
October saw my net worth increase by 1% driven by very strong income and investment gains
The value of my investment portfolio was up over 1% with continues strength in equities markets. There were noticeably more down days in the month, possibly a sign sentiment is turning? I guess we'll see but markets have been remarkably strong this year so a correction seems long overdue.
Pension unit values were also around 1% higher in line with equities performance
Property income was high. One tenant paid another 6 months rent upfront, 2 others paid on time and my problem tenants in the remaining property have now left. Once some maintenance issues are addressed this property should be back on the market within a couple of weeks.
Cash balances were higher on strong income although expenses were high. Despite this including some travel expense and another two years of gym membership, underlying expenses were also higher than usual. Something to keep an eye on.
Year to date net worth growth: 19.1%
Year to date savings rate: 68%
The value of my investment portfolio was up over 1% with continues strength in equities markets. There were noticeably more down days in the month, possibly a sign sentiment is turning? I guess we'll see but markets have been remarkably strong this year so a correction seems long overdue.
Pension unit values were also around 1% higher in line with equities performance
Property income was high. One tenant paid another 6 months rent upfront, 2 others paid on time and my problem tenants in the remaining property have now left. Once some maintenance issues are addressed this property should be back on the market within a couple of weeks.
Cash balances were higher on strong income although expenses were high. Despite this including some travel expense and another two years of gym membership, underlying expenses were also higher than usual. Something to keep an eye on.
Year to date net worth growth: 19.1%
Year to date savings rate: 68%
Sunday, 1 October 2017
September 2017 Review
September saw my net worth increase by 0.8% driven by good income, moderate expenses and a flatter month in the markets.
The value of my investment portfolio was marginally lower, i think this was more to do with fx (strengthening GBP against HKD assets) than the underlying performance of equities
Pension unit values were slightly higher, but not a significant movement
Property income was in line with expectations. Two tenants paid on time and the eviction of a problem tenant is still rumbling on longer than hoped. One tenant has just extended for another year, which helps to keep costs down.
Cash balances were higher on strong income and moderate expenses. Cash is creeping above 30% of gross assets again which is usually a sign its time to look at new investment opportunities!
Year to date net worth growth: 17.9%
Year to date savings rate: 70%
The value of my investment portfolio was marginally lower, i think this was more to do with fx (strengthening GBP against HKD assets) than the underlying performance of equities
Pension unit values were slightly higher, but not a significant movement
Property income was in line with expectations. Two tenants paid on time and the eviction of a problem tenant is still rumbling on longer than hoped. One tenant has just extended for another year, which helps to keep costs down.
Cash balances were higher on strong income and moderate expenses. Cash is creeping above 30% of gross assets again which is usually a sign its time to look at new investment opportunities!
Year to date net worth growth: 17.9%
Year to date savings rate: 70%
Wednesday, 30 August 2017
August 2017 Review
August saw my net worth increase by 0.7% driven by good income, moderate expenses and a flatter month in the markets.
The value of my investment portfolio increased close to 2% as equities markets performed well despite some volatility from political and economic events
On the other hand, Pension unit prices were fairly flat. I suspect the divergence with equities and pension performance in the month is a function of valuation timing and fx fluctuations. I'm trying not to read too much into pension valuations from month to month given access to the funds is probably a long way off in the future!
Property income was in line with expectations. Two tenants paid on time and the eviction of a problem tenant is still rumbling on longer than hoped.
Cash balances were higher on strong income and moderate expenses. There were some higher than planned travel costs but nothing to be too concerned about.
Year to date net worth growth: 16.9%
Year to date savings rate: 71%
The value of my investment portfolio increased close to 2% as equities markets performed well despite some volatility from political and economic events
On the other hand, Pension unit prices were fairly flat. I suspect the divergence with equities and pension performance in the month is a function of valuation timing and fx fluctuations. I'm trying not to read too much into pension valuations from month to month given access to the funds is probably a long way off in the future!
Property income was in line with expectations. Two tenants paid on time and the eviction of a problem tenant is still rumbling on longer than hoped.
Cash balances were higher on strong income and moderate expenses. There were some higher than planned travel costs but nothing to be too concerned about.
Year to date net worth growth: 16.9%
Year to date savings rate: 71%
Sunday, 30 July 2017
July 2017 Review
July saw my net worth increase by 1.2% driven by high income, lower expenses and investment gains.
The value of my investment portfolio increased by over 2% as equities markets performed well and a few large dividends were received.
Pension unit prices were also up over 2% driven by equities market increases. Every month so far this year has seen an increase, i'm finding it hard to see how much longer this can go on!
Property income was lower than expected. Two tenants paid on time and i'm hoping to evict a problem tenant as soon as possible.
Cash balances were higher on strong income and relatively lower expenses.
Year to date net worth growth: 16.2%
Year to date savings rate: 74%
The value of my investment portfolio increased by over 2% as equities markets performed well and a few large dividends were received.
Pension unit prices were also up over 2% driven by equities market increases. Every month so far this year has seen an increase, i'm finding it hard to see how much longer this can go on!
Property income was lower than expected. Two tenants paid on time and i'm hoping to evict a problem tenant as soon as possible.
Cash balances were higher on strong income and relatively lower expenses.
Year to date net worth growth: 16.2%
Year to date savings rate: 74%
Thursday, 29 June 2017
June 2017 Review
June saw my net worth increase by 0.9% driven by high income, investment and pension gains.
The value of my investment portfolio increased by around 2% as equities markets performed well. Despite materially downsizing the portfolio, given continued strength in the markets it is continuing to have a positive impact on net worth
Pension unit prices were also up just under 2% driven by equities market increases.
Property income was lower than expected. Two tenants paid on time, although a lot of the rent was wiped out by some unexpected maintenance costs. One tenant continued to miss payments and we're working on an exit plan.
Cash balances were higher on strong income partly offset by higher than average expenses. This included some travel costs.
Year to date net worth growth: 14.8%
Year to date savings rate: 75%
The value of my investment portfolio increased by around 2% as equities markets performed well. Despite materially downsizing the portfolio, given continued strength in the markets it is continuing to have a positive impact on net worth
Pension unit prices were also up just under 2% driven by equities market increases.
Property income was lower than expected. Two tenants paid on time, although a lot of the rent was wiped out by some unexpected maintenance costs. One tenant continued to miss payments and we're working on an exit plan.
Cash balances were higher on strong income partly offset by higher than average expenses. This included some travel costs.
Year to date net worth growth: 14.8%
Year to date savings rate: 75%
Tuesday, 30 May 2017
May 2017 Review
May saw my net worth increase by 1.2% driven by high income and pension gains.
The value of my investment portfolio increased by around 2% as equities markets performed well.
Pension unit prices were also up around 2% driven by equities market increases.
Property income was very high. One property paid on time, one became occupied and paid the full contractual rent in advance. One continued to miss rental payments but the tenant should be leaving soon and i expect to recover some if not all of the missed rent. A tenant was also found for the recently completed property purchase which should be occupied very soon.
Cash balances were a lot higher on strong income and property income in particular, offset by moderate expenses.
Year to date net worth growth: 13.7%
Year to date savings rate: 78%
The value of my investment portfolio increased by around 2% as equities markets performed well.
Pension unit prices were also up around 2% driven by equities market increases.
Property income was very high. One property paid on time, one became occupied and paid the full contractual rent in advance. One continued to miss rental payments but the tenant should be leaving soon and i expect to recover some if not all of the missed rent. A tenant was also found for the recently completed property purchase which should be occupied very soon.
Cash balances were a lot higher on strong income and property income in particular, offset by moderate expenses.
Year to date net worth growth: 13.7%
Year to date savings rate: 78%
Sunday, 30 April 2017
April 2017 Review
April saw my net worth increase by 0.7% with a good savings rate and pension gains more than offsetting property costs.
The value of my investment portfolio was fairly flat and is now having minimal impact on net worth following a number of disposals. I need to give some thought to investment strategy going forward as i am likely to have some residual cash spare to invest again following a property purchase.
Pension unit prices were up around 1.5% driven by equities market increases.
Property income was lower than plan. One property paid on time, one continued to miss rent as they serve notice (i have a claim on an insurance policy to cover the missed rent) and one remained vacant. Another property investment was completed and should be on the rental market shortly. There were a number of one off costs associated with the investment.
Cash balances were significantly lower following the property purchase and is now broadly in line with my longer term target.
Year to date net worth growth: 12%
Year to date savings rate: 80%
The value of my investment portfolio was fairly flat and is now having minimal impact on net worth following a number of disposals. I need to give some thought to investment strategy going forward as i am likely to have some residual cash spare to invest again following a property purchase.
Pension unit prices were up around 1.5% driven by equities market increases.
Property income was lower than plan. One property paid on time, one continued to miss rent as they serve notice (i have a claim on an insurance policy to cover the missed rent) and one remained vacant. Another property investment was completed and should be on the rental market shortly. There were a number of one off costs associated with the investment.
Cash balances were significantly lower following the property purchase and is now broadly in line with my longer term target.
Year to date net worth growth: 12%
Year to date savings rate: 80%
Sunday, 2 April 2017
March 2017 Review
March saw my net worth increase by 7.4% with very high income along with pension gains.
The value of my investment portfolio was fairly flat and is now having minimal impact on net worth following a number of disposals. I need to give some thought to investment strategy going forward as i am likely to have some residual cash spare to invest again following a planned property purchase.
Pension unit prices were up around 2% driven by equities market increases.
Property income was lower than plan. One property paid on time, one missed their rent payment (i now expect them to leave soon) and one remained vacant. A tenant for the vacant property had been found but appears to have pulled out, so it will go back on the market. A fourth property investment is planned to complete in the next month or so.
Cash balances were significantly higher following a lump sum of income. Whilst this will come down with a planned property purchase it is still likely to remain on the high side for now.
Year to date net worth growth: 12%
Year to date savings rate: 82%
The value of my investment portfolio was fairly flat and is now having minimal impact on net worth following a number of disposals. I need to give some thought to investment strategy going forward as i am likely to have some residual cash spare to invest again following a planned property purchase.
Pension unit prices were up around 2% driven by equities market increases.
Property income was lower than plan. One property paid on time, one missed their rent payment (i now expect them to leave soon) and one remained vacant. A tenant for the vacant property had been found but appears to have pulled out, so it will go back on the market. A fourth property investment is planned to complete in the next month or so.
Cash balances were significantly higher following a lump sum of income. Whilst this will come down with a planned property purchase it is still likely to remain on the high side for now.
Year to date net worth growth: 12%
Year to date savings rate: 82%
Tuesday, 28 February 2017
February 2017 Review
February saw my net worth increase by 2.3% with high income along with investment and property valuation gains.
The value of my investment portfolio was fairly flat but there were a lot of disposals in the month. I've decided to cash in on large capital gains in emerging markets, asia and europe ETFs, just holding on to a handful of core holdings. The proceeds from these disposals may be diverted towards further property investments as equity valuations seem on the high side.
Pension unit prices were up around 1% as markets seemed a little calmer than recent months.
Property income was back on track although my most recent acquisition is still vacant. There have been few viewings in the last couple of weeks so i'm hoping for a tenant to be in place soon. I've also updated the values of my properties for the first time in over a year. One had increased (with lots of observable market references to go by) but i also lowered another which was more subjective. Overall this resulted in an upwards revaluation of around 3%.
Cash balances were significantly higher following strong income and investment disposals. Whilst i'm less inclined to get straight back into equities with this surplus cash, another property investment is a possibility in the coming months.
Year to date net worth growth: 4%
Year to date savings rate: 67%
The value of my investment portfolio was fairly flat but there were a lot of disposals in the month. I've decided to cash in on large capital gains in emerging markets, asia and europe ETFs, just holding on to a handful of core holdings. The proceeds from these disposals may be diverted towards further property investments as equity valuations seem on the high side.
Pension unit prices were up around 1% as markets seemed a little calmer than recent months.
Property income was back on track although my most recent acquisition is still vacant. There have been few viewings in the last couple of weeks so i'm hoping for a tenant to be in place soon. I've also updated the values of my properties for the first time in over a year. One had increased (with lots of observable market references to go by) but i also lowered another which was more subjective. Overall this resulted in an upwards revaluation of around 3%.
Cash balances were significantly higher following strong income and investment disposals. Whilst i'm less inclined to get straight back into equities with this surplus cash, another property investment is a possibility in the coming months.
Year to date net worth growth: 4%
Year to date savings rate: 67%
Monday, 30 January 2017
January 2017 Review
January saw my net worth increase by 1.6% with high income, lower than average expenses and a strong month in the markets.
The value of my investment portfolio increased around 3% as equities continued to rally. I've sold all my remaining fixed income ETFs given the increased expectations of USD rate rises through 2017, and continued devaluation of RMB (the RMB bond ETF was closed down as it seemed everyone was heading for the door!).
Pension unit prices were also up over 3% in line with strong equities performance.
Property income was a mixed picture. One paid on time, but some large maintenance costs are expected over the month. One was late, but are making an effort to catch up - we're staying on a short term rolling contract for now at the mutual agreement of the tenant and landlord. The recent purchase remains vacant but had a few viewings. If the market looks quiet i may consider lowering the rent to get it occupied as soon as possible.
Cash balances were lower with a lumpy tax bill more than offsetting high income, lower expenses and an investment disposal. The tax had been fully accrued for so no impact to net worth.
Year to date net worth growth: 1.6%
Year to date savings rate: 62%
The value of my investment portfolio increased around 3% as equities continued to rally. I've sold all my remaining fixed income ETFs given the increased expectations of USD rate rises through 2017, and continued devaluation of RMB (the RMB bond ETF was closed down as it seemed everyone was heading for the door!).
Pension unit prices were also up over 3% in line with strong equities performance.
Property income was a mixed picture. One paid on time, but some large maintenance costs are expected over the month. One was late, but are making an effort to catch up - we're staying on a short term rolling contract for now at the mutual agreement of the tenant and landlord. The recent purchase remains vacant but had a few viewings. If the market looks quiet i may consider lowering the rent to get it occupied as soon as possible.
Cash balances were lower with a lumpy tax bill more than offsetting high income, lower expenses and an investment disposal. The tax had been fully accrued for so no impact to net worth.
Year to date net worth growth: 1.6%
Year to date savings rate: 62%
2017 financial plan
After a very successful 2016 for my finances i'll be hoping for more of the same in 2017. In preparing a simple financial plan for 2017 my working assumption for most items will be to expect income and expenses to be broadly consistent with last year.
Regarding income, overall this is expected to be quite flat. Employment income will likely be a little lower, but hopefully property income will hopefully be higher if i can rent out my recent property investment. The big unknown will be if there are further foreign exchange movements, which were a big factor last year, but my working assumption is flat fx rates against current levels.
In expenses, tax and rent are expected to be similar, although my own rental agreement is up for renewal in the summer. Investment property expenses will likely be higher but should hopefully be covered by income. I've put some buffer in general day to day expenses as i've had my eye on a few luxuries for a while now. Travel costs are also a bit of an unknown for now, probably not as high as last year but i've budgeted for a similar number of trips.
Overall, if this goes to plan it should be another year with a savings ratio in the mid 60%s range and net worth growth of 18%. All investment, pension and property values are assumed to be flat, and will no doubt bring some volatility given all the political and market issues unfolding around the world...
Regarding income, overall this is expected to be quite flat. Employment income will likely be a little lower, but hopefully property income will hopefully be higher if i can rent out my recent property investment. The big unknown will be if there are further foreign exchange movements, which were a big factor last year, but my working assumption is flat fx rates against current levels.
In expenses, tax and rent are expected to be similar, although my own rental agreement is up for renewal in the summer. Investment property expenses will likely be higher but should hopefully be covered by income. I've put some buffer in general day to day expenses as i've had my eye on a few luxuries for a while now. Travel costs are also a bit of an unknown for now, probably not as high as last year but i've budgeted for a similar number of trips.
Overall, if this goes to plan it should be another year with a savings ratio in the mid 60%s range and net worth growth of 18%. All investment, pension and property values are assumed to be flat, and will no doubt bring some volatility given all the political and market issues unfolding around the world...
Wednesday, 4 January 2017
2016 Annual Review
2016 was an excellent year for my finances and exceeded expectations. These are a few of the key points:
Net worth
Net worth increased by 24%, compared to 16% plan and 18% in the prior year. This was driven by a combination of (a) higher than expected income, (b) strong equities performance supporting the investment portfolio and pension valuations, and (c) the impact of a large movement in foreign exchange rates post brexit increasing the value of my hkd assets in gbp terms.
Savings rate
Savings rate (net income after all expenses divided by gross income) was a very high 65%. This was in line with plan, but within this number both income and expenses were higher than expected, but in this constant proportion. My savings rate has been in the 60-70% range for five years in a row (since detailed records commenced), and although expenses have been increasing during this period, it has always been proportionate to increases in income. Whilst this is clearly a high savings percentage, it does not feel like i've been particularly frugal and expenses reached a record high this year.
Income
Income reached a record high, driven largely by higher than expected employment income, of which a growing portion is variable and may not all recur. Aside from employment income, the passive income from my assets (property, cash savings and dividends on investments) continued to rise as my net worth and assets increased. Throughout the year i also crystallised some foreign exchange gains and realised some gains on the disposal of non core parts of my investment portfolio, taking the opportunity to simplify my range of ETFs as many markets hit long term highs.
Expenses
Expenses also reached a record high. Roughly half of the increase was unavoidable - home rental and taxation related, the other half was more discretionary. In particular travel costs were a lot higher than previous years with around 7 separate trips enjoyed during the year. Property investment costs and bills were also higher than expected, including some costs associated with acquiring a new rental property towards the end of the year. General living expenses were also slightly over plan but with nothing significant driving the increase.
Overall there are far more positives than negatives here, along with a few one off factors i don't expect to recur consistently in the years to come. I will dig into expenses a little further to see if there are opportunities to reduce, or at least stabilise some of the increases, but overall i don't see much cause for concern. Income is less predictable so i can only hope for the best and keep maximising the parts i can control.
A 2017 plan will follow shortly.
Net worth
Net worth increased by 24%, compared to 16% plan and 18% in the prior year. This was driven by a combination of (a) higher than expected income, (b) strong equities performance supporting the investment portfolio and pension valuations, and (c) the impact of a large movement in foreign exchange rates post brexit increasing the value of my hkd assets in gbp terms.
Savings rate
Savings rate (net income after all expenses divided by gross income) was a very high 65%. This was in line with plan, but within this number both income and expenses were higher than expected, but in this constant proportion. My savings rate has been in the 60-70% range for five years in a row (since detailed records commenced), and although expenses have been increasing during this period, it has always been proportionate to increases in income. Whilst this is clearly a high savings percentage, it does not feel like i've been particularly frugal and expenses reached a record high this year.
Income
Income reached a record high, driven largely by higher than expected employment income, of which a growing portion is variable and may not all recur. Aside from employment income, the passive income from my assets (property, cash savings and dividends on investments) continued to rise as my net worth and assets increased. Throughout the year i also crystallised some foreign exchange gains and realised some gains on the disposal of non core parts of my investment portfolio, taking the opportunity to simplify my range of ETFs as many markets hit long term highs.
Expenses
Expenses also reached a record high. Roughly half of the increase was unavoidable - home rental and taxation related, the other half was more discretionary. In particular travel costs were a lot higher than previous years with around 7 separate trips enjoyed during the year. Property investment costs and bills were also higher than expected, including some costs associated with acquiring a new rental property towards the end of the year. General living expenses were also slightly over plan but with nothing significant driving the increase.
Overall there are far more positives than negatives here, along with a few one off factors i don't expect to recur consistently in the years to come. I will dig into expenses a little further to see if there are opportunities to reduce, or at least stabilise some of the increases, but overall i don't see much cause for concern. Income is less predictable so i can only hope for the best and keep maximising the parts i can control.
A 2017 plan will follow shortly.
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