Hope everyone is enjoying their Sunday evening! Are you all psyched for Monday? Woot woot! At the very least, I hope you basked in the beautiful Spring weather today.
After the last post on feedback I received a goodly number of well, feedback and the consistent theme is to continue to make it personable – “treat it like Reality TV”.
Reality TV? I can’t cook for scary chefs or sing in front of artists named after animals – what do you mean reality TV?
Then it hit me – just talk about yourself, people love peering into other people’s lives. So easy, so simpaul.
Being a personal finance and development blog, it wouldn’t do any of you justice without having me disclose my own personal finances and development so big breath, here goes:
Currently my portfolio is made up of predominantly real estate, shares, superannuation (similar to the 401k my American friends) and cash.
The real estate portfolio is where the bulk majority of my net wealth is. It sits just shy of $2m with pretty much bang on $1m of debt. So around 50-55% loan to value (LVR) ratio. I consider this gearing at a conservative level and as all loans are on principal + interest repayments, they are amortising as we speak. Ideally I would like to bring this gearing to around the 60-70% level which would mean another property or two.
Mind you, my income servicing levels are almost at their peak so it would be interesting to see how I can juggle this with the various lenders going forward. Juggling is so cool, you throw many things (ideas, oranges, your hands, sharp objects etc) in the air and then catch them and then throw them in the air again and then repeat until you either become too fatigued or get killed by said objects. It’s a favourite pastime of the Ancient Incas.
Enough about juggling, back to it. The share portfolio is nowhere near as solid as the real estate portfolio. Outside super, it’s been smashed to hell and back in the aftermath of the GFC and Eurozone Crisis and hasn’t yet recovered.
This is because being young and naive at the time, I invested in bitcoi… I mean I invested in highly speculative, no fundamentals, micro-cap “companies” which either nuked the moon or turned into infinity divided by zero. I escaped with around $40k capital loss overall during this period. Still hold some, they’ll come good, they always come good. Current value is enough to last me maybe 3 weeks if I wanted to give everything up and concentrate on juggling.
Superannuation – hands up who knows what their super balance is? You know the one which you get to access in 40 years time? Yes, 40 years, FORTY long, hard years. Most prison sentences don’t last that long.
Aha – you see that’s how I thought too, but then I came to realise one important aspect – it’s my money so damnit man if I’m not going to take charge of it. I researched which fund is most suitable for my needs and rolled everything in one (please do yourself a favour and consider changing to an industry or non-retail fund, the returns are so much better with lower fees, compare it yourself).
Personally I am with Australian Super because of the flexibility of Member Direct – this is a platform which allows direct share investment into the ASX200. You need to stay diversified and keep a liquid cash balance with slightly higher fees and brokerages, but I don’t mind – I’ve bought 5 stocks and haven’t sold since, a healthcare company, funeral home specialist, large resources conglomerate, gold mining equipment supplier and another mining services specialist. Mixed results in there but all long term holds. Sitting around $75k overall.
Finally onto cash. Cash is king baby, seriously, people who tell you otherwise either do not have it or do not know the fundamentals of being LIQUID.
Without cash, there’s no point in having assets – they are just words on paper or numbers on the screen. This is one of the biggest lessons which I have learnt in my journey so far. I always ensure to keep a healthy cash balance at all times. I have around $150k swishing around in the various loan accounts and savings accounts.
So there you have it, that’s me finances, around $1.1m in net assets so far. Not too bad for 30 years of work and here’s hoping for better in the next 30.
How are you travelling along in your financial journey? I started this blog to share what I have learnt so far so you can achieve much better than I, in a much faster time-frame. After all, I’m just an ordinary guy with nothing to lose so if I can do it, you definitely can too!
Going forward, I’ll be posting how I did it and the biggest lessons along the way, so stay tuned.
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P.S. Let me know if there’s any topics you guys are interested in specifically as well!