Finance Smiths

Personal finance apprentices-in-training

Feb 2018 Net Worth Update

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There has been a few small dips in the equity markets and I took the opportunity to invest some of our cash. Not much, about S$1,500 of manual investments on top of our automatic investments. It’s good practice for how I will utilise our cash funds when the dips in the equity markets become bigger. I’m also realising the benefit of having a larger cash balance in that I can take my time to invest it.

The important thing is I don’t feel the urgency of having to build my investment portfolio up quickly. Because we can still rely on our jobs for salary income for now. Which is why I reckon it’s more essential to find roles that you are fine being in that pay you enough to build an investment portfolio slowly. Rushing this process because I don’t like my job is going to get me into more financial trouble. Being patient seems to be the key theme for us in 2018.

Feb 2018 Net Worth: S$379,841 (S$6,589 and +1.77%)

Cash, investments and retirement funds all went up by varying degrees with the reduction in housing loan liability to increase our net worth. The dollar amount and percentage of the increase is the lowest it has been for the past several months. Especially when compared to the Dec 2017 and Jan 2018 Net Worth Updates with the annual performance bonus cash payout and CPF contributions. The flat equity markets and paying off the ski trip expenses didn’t help.

Anyway, the outcome of my remuneration outcome based on my performance review for 2017 is likely to be released to me by the end of this month. It’s my first time at a bank and I wonder how it will compare to my previous experience at an accounting firm. The profits earned by the bank in 2017 may have been higher than 2016 but our team has gotten bigger. A larger pie to be divided by more people may result in the same slice for everyone despite achieving better results. I shall wait and see before writing about it when I receive the letter.

Jan 2018 Net Worth Update

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I decided to add our StocksCafe portfolio back onto the blog. After all, I’m now a paid subscriber and I might as well display it as a monitoring tool for myself too. Anyway, I added in several USX transactions to simulate the StashAway and Smartly robo-advisor accounts investments in US-listed ETFs. They are not going to be accurate in terms of average purchase prices and number of units since I’m only entering them in at the end of each month to approximate the accounts values.

The useful part about having these US-listed ETFs on our StocksCafe portfolio is that I can better track the dividend payout dates and amounts. I know the dividends are being re-invested but I might still include them as passive income on my Google Sheet. And I get a more complete view of the local and global components of our portfolio in one snapshot i.e. Singapore ETFs vs Foreign ETFs.

Jan 2018 Net Worth: S$373,252 (+S$40,140 and +12.05%)

There is a big drop in our investments because I sold out of a number of major positions to lock in the profits. As a result, this has increased our cash holdings significantly. My retirement funds also went up by quite a bit due to the higher than normal Central Provident Fund (CPF) contributions and interest earned. Consequently, this combination of factors has pushed our total assets above S$1 million.

However, our sizeable mortgage continues to be a drag on our net worth. I keep reading about how overpaying for a property can really dampen your wealth-building efforts and I totally agree with it. I know owning and staying in an apartment relatively close to my parents-in-law has many benefits but it has come at a financial cost that we continue to grapple with each month. The problem is the current property market in Singapore is not easy to navigate. It has stayed at elevated levels for several years now mainly due to a low interest rate and low unemployment rate environment. Still not sure what is the right move for us now.

Dec 2017 Net Worth Update and Wrap Up

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This is my last net worth update for the year 2017 in Dec. Just updated the figures in our Net Worth Google Sheet and we now officially have 2 years worth of accurate data to look back on starting from Dec 2015. Yearly patterns in behaviour when it comes to our expenses, savings, investments and retirement funds are starting to emerge.

The data tracking for the past 2 years has been beneficial and I would most likely continue with it. However, I have to say it takes a long time for daily and weekly actions to take effect. There are plans that we put in place 1 to 2 years ago that are only just beginning to show results. And it would take the same amount of time for the outcome of any changes to these plans to be reflected.

Patience and the understanding that some things cannot be rushed is an important personality trait we are still trying to develop. Anyway, I enjoyed reading the 2017 annual reviews of various bloggers. Generally, I reckon 2017 has been a good year for most of us financially and even personally. It would be nice to have more years like that where we are happier with what we have achieved.

I considered changing the format of this final monthly Dec net worth update into a yearly one for 2017. Just so I can do it together with a review of our successes and failures for the year. But I might do a wrap-up instead because I’m not sure how much I want to write on the year-to-year comparison and our reflections. I get it’s essential for goal-setting in 2018 so I will see how it goes.

Cash: +S$27,736 and +5.90%

It’s a strong performance for our cash holdings in Dec 2017. My wife’s annual performance bonus and salary was credited into her bank account and my salary was credited into my bank account on the same day. And the sale proceeds from selling my wife’s employee shares in Australia was credited around the same time. It’s the biggest injection of cash funds we have experienced in one week so far.

I have set aside a portion of it to pay for our upcoming ski trip to Austria in Feb 2018 and our credit card bills from all the recent wedding anniversary and Christmas spending. I only input the net cash amount in our Google Sheet to be conservative.

Investments: -S$305 and -0.15%

This is largely due to the sale transaction of my wife’s employee shares in Australia. The investing cash inflows for our monthly investment plans and robo-advisors were not enough to offset the decline in our portfolio. Flat equity markets didn’t help much as well. Disappointing to say the least. Regular capital injections are crucial to the long-term success of our ETF strategy and they have to be of sufficient size to make it work. Which is why I increased the monthly investing cash inflows even more from Jan 2018.

Retirement & Medical: +S$4,151 and +1.58%

Central Provident Fund (CPF) Ordinary Account (OA), Special Account (SA) and Medisave Account (MA) mandatory contributions are behind this increase. A portion of my wife’s annual performance bonus is to be contributed to her CPF but this should happen in Jan 2018. Coupled with the end of year interest to be credited for our CPF then, we are expecting a bigger increase in our Retirement & Medical funds when doing the Jan 2018 Net Worth Update.

Total Assets: S$31,582 and +3.35%

Net Worth: +S$33,974 and +11.36%

A big jump in our total assets and net worth (difference comes from paying down our mortgage with the housing loan monthly instalment payment). I have continued to exclude our owner-occupied property from the total assets calculation because it’s going to unnecessarily inflate the numbers. Which will do more harm than good when we are still at the wealth-building stage.

We are getting closer to our S$1 million total assets target. By my calculations, we are likely to reach it before my wife’s 30th birthday in April 2018. It would be a great financial achievement to cap off our first decade together as a couple. Theoretically, the snowball and compounding effect suggests that we should reach our next target in a shorter time. But I wonder whether it accounts for exhaustion and kids. Because it’s easy to get tired in a financial pursuit for wealth while trying to build a family.

Wrap Up

I’m too lazy to do a full on review of what we did well and what we did poorly for the year 2017. Our health has improved in the last few months as we strived to increase our exercise/gym sessions each week. We travelled to Bali & US in the first half of the year and went to France in the second half. We are comfortable with the extent of our current social & professional circles and work got busier but we managed. We have grown financially stronger from the back of higher salary & bonus income and bull markets driving our investments upward.

This has come at a cost of less personal time for my wife and I. As you can imagine, the more time we schedule for everything else we are trying to accomplish, the less time we have for each other. But after 10 years together, we understand our relationship will just keep evolving as we pursue our personal and joint goals. Things will never remain the same as long as we both keep moving forward. Simply put, we just have to keep finding reasons to stay together with mutual and self love as our underlying motivating factor. I wonder what’s next for us.