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Time for another net wealth update!
Before I begin, I wanted to put it out there that these updates are just a way for me to stay accountable to my personal FIRE journey, nothing more nothing less.
I put my goals public and keep it transparent so I can get out of my comfort zone – something 2010 TheFrugalSamurai would NEVER have imagined doing.
Anyway, if you like the updates – let me know in the comments below!
Oh and another thing, some people have asked me why I don’t use a fancier calculator to work out my net wealth and make it look prettier…
Why bother though? End of the day, they’re just numbers on a screen and don’t really mean anything month-to-month. I’d rather figure out ways to increase them.
You can read the March update here.
The numbers (apart from the individual shares), are rounded given property is an illiquid asset (meaning values are not representation of sale price), and superannuation is a long-long-term asset.
Also, it is extremely difficult to mark-to-market real estate values on a monthly basis. This is because without any comparable sales, you can only guesstimate.
However for April, I have marked the real estate values down 5% across the board, to reflect the impact of COVID-19.
Given the lack of comparables, whether it has gone down by 5% (or more), or remained flat, or even gone up (highly unlikely) is very hard to tell.
But I’m not kidding myself, there has got to be a detrimental impact to property values from COVID-19.
- After the craziness of March, April has been relatively “OK” in terms of volatility.
- The thing is, for me – most of my net wealth is tied to real estate, and there has been increasing negative forecasts as to how much the market will fall, some say 10%, some say 30% (wtf!)
- Although, I could care less about valuations and short-term growth prospects, as my real estate investment horizon is multi-decades. I’d wager valuations will be higher in 2040.
- What I am focused about, is rent and cash-flow. Because cash-flow keeps you in the game. Thank fook the Australian government pumped billions into the economy to prop up household income, without which many landlords will be in a WORLD of hurt.
- Also, we got an offer for the property listed for sale! Unfortunately, it was about $20k short of where I’d accept, so no dice. Increasingly looks like I’ll have to rent it out again.
- Another point to note, I always use the investment options in my superfund as a benchmark against my “active” stock portfolio. It is up from $4,500 in March to $6,000 in April… a 33% return, yet the overall portfolio has barely moved.
- Should I have just left my entire balance under passively managed investment options? Yet another argument for ETF’s and passive investing…hm something for me to ponder.
That’s it for another month boys and girls.
Ooo before I go, a few of you thought the joke I inserted at the end of last month’s update (here), was pretty good, so here’s another one:
Hmm, let’s see, ah yes… Do you want to hear a joke about a piece of paper?
Never mind… it’s tearable.
Hahahaha… oh dear.
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P.S. If you are reading this on the mobile version, for some reason some images don’t pop up, if you can’t see the spreadsheet, try it on tablet or desktop.