I have just updated my net worth, portfolios, dividend & interest income and savings rate pages for end of June 2016. Since the first half of the year is now over, this financial update is a good way to see how we are tracking with our goals that were set earlier in the year. This will be set out in order of how these pages appear in my blog for easier reference.
The goal is to reach S$100,000 by 31 Dec 2016. As at 30 Jun 2016, our net worth is S$98,408 and it should exceed S$100,000 by 31 Jul 2016. This is due to a combination of monthly payments to reduce the mortgage debt, cash savings, additional investments in ETFs & shares and contributions to CPF.
We have understated our net worth by using a net mortgage debt calculation based on 50% of the value of our apartment and 100% of the housing loan liability. Unless our apartment starts generating rental income, we are not likely to increase the percentage of its value in our net worth calculation. However, this does mean that our net worth figure is not as accurate when compared to the proper or textbook method of calculation.
We prefer for any increase in our net worth to be largely tied to having more liquid assets in our portfolio and less to do with the value of the apartment (an illiquid asset). There’s no point in having a high net worth if we don’t actually have much liquid funds to tap into.
This is why our net worth figure also indicates our liquidity position and gives us an idea of how much liquid assets we have to redeploy when a significant event occurs. As long as our net worth figure trends upwards, that means we are managing both our BS and P&L in the right manner.
The goal is to reach S$40,000 by 31 Dec 2016. As at 30 Jun 2016, the value of our ETF portfolio is S$44,377. This is mainly due to us investing quite a bit in the ETFs after the markets sell-off from Brexit.
We are happy to see that the change in focus of our investing strategy to ETFs is starting to take effect. However, we have decided to reset the goal to reach S$50,000 by 31 Dec 2016. Always good to keep pushing ourselves to aim higher.
The goal is to reach S$120,000 by 31 Dec 2016. As at 30 Jun 2016, the value of our Share portfolio is S$115,788. We averaged down on some of our stocks due to price weaknesses and this accounted for most of the growth in the Share portfolio.
We seem on track to meet our goal but don’t plan on increasing the value of our Share Portfolio much going forward. If anything, our belief in ETFs has grown from the recent market volatility and find them to be a more effective financial instrument for wealth generation.
The goal is to reach S$150,000 by 31 Dec 2016. As at 30 Jun 2016, the value of our Other Portfolio is S$147,800. Cash savings has largely contributed to this increase from the previous month as we have not subscribed to any corporate bonds recently and wholesale life policies’ surrender values grow really slowly. We might actually hit the target by 31 Jul 2016.
Retirement Fund and Cash On Hand
No goal was set for the 2016 year because they are functions of the monthly mandatory contributions to our CPF and cash savings. As long as we are employed, this asset component continues to grow and we are happy not to attach any targets to them. Our main aim is really just to stay employed until we figure out how to be self-employed (if ever) and try not to lose our jobs before that.
The goal is to reach S$5,000 by 31 Dec 2016. As at 30 Jun 2016, we have received S$2,631 of dividend income. This is more than 50% of the target by half year and we should hit it by end of the year given how we have invested a bit after the ex-dividend dates in 2016 of some of the ETFs and shares.
The goal is to reach S$5,000 by 31 Dec 2016. As at 30 Jun 2016, we have received S$3,098 of interest income. We don’t think there should be any issues in meeting the target by the end of the year. However, we are concerned that we are earning more interest income than dividend income.
This means we have too much cash on hand and might not have allocated our asset portfolio efficiently. It’s a nice problem to have but we still have to work on a solution. We are tempted to start investing even larger amounts of cash but the run-ups in the equity markets over the past few years is making us hesitate.
No goal was set for the 2016 year because I only recently started tracking our savings rate on my blog. The good news is that the savings rate has been increasing slightly with each month. We have started to make small adjustments to our spending habits to try and lower the monthly expenses. It’s difficult to make significant changes to our lifestyle at one time but we are taking baby steps towards it. Taking less cabs, having one less coffee/drink, eat out less etc.
Overall, we are satisfied with the way things have gone financially for the first half of this year. Work has been tough and who knows what’s going to happen in the next half of the year. But we have also enjoyed our time off by going on vacations, meeting family and friends etc.
We have also started exercising more now, especially my wife who has been running after work on weekdays, and it always helps with our moods and stress levels. It can be overwhelming to deal with our personal, professional and financial lives at times but we try to manage them in the best way we can.