So first thing is first, there were a lot of questions in my previous portfolio update about how I managed to get so much net worth in my mid-twenties. I answered in the comments section of that post but basically I have taken on my parents mortgage, but have also taken title to the house. I don’t want to go into too many details, but they are no longer in a position to earn a consistent income due to a run of bad luck and some health issues so I have taken this on myself to let them “semi-retire” early and focus on their health and well-being. I see it as an “early inheritance” if you will, and it has always been a goal of mine to provide for my parents once I was able to do so to show how much I appreciate them providing for my brother and I as we grew up.
There were a few comments also on having so much debt on the last post. I have done some thinking and have come to the conclusion that I agree to a certain extent and will be shifting my priorities for 2019 to pay down debt first, and invest into shares if the opportunity arises (i.e. if I get a nice bonus from work this year). Putting money into the share market the past 2-3 months hasn’t been as good as if I put it directly into the mortgage given how the markets have moved. I guess it’s the age old question of whether I want a ‘guaranteed return’ of paying down mortgage or if I want to take a gamble and invest into the share market given the historical returns are higher than the interest rate I would pay on my mortgage. For now, I feel as though paying down the mortgage is the safer approach so I will focus on paying down debt first on the primary residence mortgage and put investing into shares on hold for now – the goal is to pay off $36,000 on that one which would put a nice dent into it.
Over the month I have revisited and weighed up the pros and cons of both the Bogle and Thornhill approaches but I remain committed to a hybrid approach and will stick with my 100% VDHG approach for simplicity. There’s a few great pieces of content to consume here and here if you want to get some more information on both approaches so you can ultimately make the decision on what suits you.
- Aussie Firebug – Podcast with Peter Thornhill
- The FI Explorer – A Skeptical View of Listed Investment Company Investing
Furthermore, I’ve added a ‘Portfolio’ tab to the blog’s home page. I am hoping that this provides a ‘live’ update of my portfolio and potential passive income – we are all gunning for financial independence and being able to see how close I am to my goal will motivate me more and keep my on track.
Finally, here is this month’s portfolio update. People have been asking for a bit more detail and breakdown so here we are;
Mutual Funds: $11,086.34
Real Estate: $1,037,000
TOTAL: $1,129,229.32 (vs. $1,119,595.52 last month)
Mortgage 1 (PPR): $283,443.87
Mortgage 2 (IP): $381,528.81
TOTAL: $677,439.64 (vs. $678,375.55 last month)
$458,789.68 (+10,573.41 or +2.40%)
So in summary, the majority of this month’s net worth gain was from assets, which comes from a combination of my super balance and shares investments recovering from previous months, as well as putting another $3,000 towards as my final share investment before I really focus on paying down debt. Moving forward, as I stated earlier, I’m really keen on smashing down those liability numbers so let’s see how we go as we progress into the new year.