Net Worth 2 – October 2014

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Category Oct 2014 Sep 2014 Monthly Change Oct 2013 Annual Change
Cash £35,640 £40,181 -£4,541 £33,156 £2,484
Investment (ISA) £8,202 £7,118 £1,084 £2,132 £6,070
Pension £63,645 £61,821 £1,824 £51,968 £11,677
Home £336,226 £335,666 £560 £277,000 £59,226
Car £3,400 £3,500 -£100 £4,600 -£1,200
TOTAL ASSETS £447,113 £449,840 -£2,727 £368,856 £78,257
Credit Card -£1,049 -£3,104 £2,055 -£5,500 £4,451
Mortgage -£160,807 -£161,262 £455 -£171,736 £10,929
HMRC Taxes -£19,273 -£19,273 £0 -£7,798 -£11,475
TOTAL LIABILITIES -£181,129 -£183,639 £2,510 -£185,034 £3,905
NET WORTH £265,984 £266,201 -£217 £183,822 £82,162

 

Key Thoughts in review:

  • My cash situation is getting a bit low, as some of the cash is in P2P, ISA and notice accounts, and lots is earmarked for the taxman in January.
  • Overall a minor decrease (£200) from last month, which is exactly as expected as most of my money comes in quarterly
  • The rampant house price inflation has cooled down now, only £560 appreciation in the last quarter, which feels right
  • Investments didn’t do too well as the markets are down (I’m invested in index funds),
    • But what a perfect time for my first month of less mortgage overpaying and more investing
    • I think it’s a good sign that was the right time to be making this change
  • Happy with 2014 progress
    • I’ve got more expensive home improvements next month – finally getting flooring, so the evil carpet /bare floorboards will be things of the past
    • Also a holiday (which also means I’ll not be earning) , so I’m not expecting large gains for the last quarter in net worth, would be happy to remain roughly constant
    • I’ll need to rein in spending/home improvements/holidays in the first quarter 2015 to ensure I can top my NISA up to the limit this tax year

 

 

 

September 2014 Spending……£3,951

September 2014

Well, my second month tracking my spending has certainly been another eye opener…. there is a clear difference between what I though I spent, what my (very flexible) budget says and what I actually spent. And yes, you guessed it – what I actually spent was considerably more.

Overall I’m happy that most of my money has gone on “sensible” things this month – Mortgage payments (yes they are massive), investments into my NISA, and mortgage overpayments. So I feel virtuous and *good* in this regards.

What’s beginning to become apparent, it how all the other items start adding up, and a few bulk purchases/replacements can really add up to a substantial amount of funds.

I do however subscribe to the paying it forward belief, some of the future purchases I’ve made will come to fruition later in the year and next year, and will give me loads of anticipation looking forward to them, and ultimately will be cheaper overall.

And onwards to October, when I’m away for a mega holiday, so I don’t expect much improvement in the spending.

 

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Net Worth 1 – September 2014 – not too shabby

Category Sep 2014 Aug 2014 Monthly Change Sep 2013 Annual Change
Cash £40,321 £42,799 -£2,478 £12,722 £27,599
Investment (ISA) £7,132 £6,179 £953 £2,096 £5,036
Pension £63,221 £61,042 £2,179 £51,143 £12,078
Home £335,666 £335,666 £0 £260,000 £75,666
Car £3,500 £3,600 -£100 £4,700 -£1,200
TOTAL ASSETS £449,840 £449,286 £554 £330,661 £119,179
Credit Card -£3,104 -£1,014 -£2,090 -£4,865 £1,761
Mortgage -£161,262 -£162,238 £976 -£172,954 £11,692
HMRC Taxes -£19,273 -£19,273 £0 -£1,998 -£17,275
TOTAL LIABILITIES -£183,639 -£182,525 -£1,114 -£182,525 -£1,114
NET WORTH £266,201 £266,761 -£560 £148,136 £118,065

 

Well, as you can see from my previous post, August was a month with loads of spending, so how did it impact my net worth?

This month’s review in brief

  • Most of my income comes in quarterly, so it’s also a month without much money coming in either.
  • Cash is down/credit card is up as expected with the month’s expenses
  • However the stock market & my monthly contributions helped my investments and pensions.
  • Only down £560, which is quite good going
  • Overall I’m happy, but could definitely do better.

Next month my strategy is changing, I’m not longer overpaying my mortgage (as it’s fixed at a snazzy new rate of 2.19%) and I’ll be directing that money to my ISA instead. I’ve also increased my pensions contributions by £100 a month, as it’s very tax efficient.

 

 

 

August 2014 Spending…… £5,632 gulp

August Spending Breakdown

An eye opening first month’s spending diary for me…..and it’s been a dramatic start for the diary, with £5,632 spent in this month alone.

As you can see above, most of this was on travel, to pay for a dream holiday in October… a jaunt to Peru/Bolivia to see the Amazon, do the Inca Trail, see Lake Titicaca and much more. An indulgence, but well worth the money.

After spending heaps on travel…… I’m pleased to see the next things I spent money on were mortgage payments and investments into my NISA, which makes me feel virtuous again.

Will I continue to track my spending?  Oh yes, it’s fascinating to see it all laid out where my money actually goes….this could become addictive (and I love the Toshl graphics).

 

 

 

 

 

Net Worth 0 – August 2014

My main aim for this site was to anonymously share my net worth, so here we go – I’m putting all my numbers out there.

Let’s start with the data:)

I’ve displayed this month, last month and last years values for comparison.

 

Category Aug 2014 Jul 2014 Monthly Change Aug 2013 Annual Change
Cash £42,799 £28,361 £14,438 £13,902 £28,897
Investment (ISA) £6,179 £5,811 £368 £2,000 £4,179
Pension £61,042 £60,208 £834 £50,829 £10,213
Home £335,666 £335,666 £0 £260,000 £75,666
Car £3,600 £3,700 -£100 £4,800 -£1,200
TOTAL ASSETS £449,286 £433,746 £15,540 £331,531 £117,755
Credit Card -£1,014 -£4,152 £3,138 -£4,314 £3,300
Mortgage -£162,238 -£163,171 £933 -£173,587 £11,349
HMRC Taxes -£19,273 -£15,958 -£3,315 -£1,998 -£17,275
TOTAL LIABILITIES -£182,525 -£183,281 £756 -£183,281 £756
NET WORTH £266,761 £250,465 £16,296 £148,250 £118,511

 

So to bring a bit more context into these rather dry numbers, I’ve elaborated on my categories below, and added a bit of insight to my personal situation, as we are all different.

 

Cash

  • This includes my high interest current account, cash ISA savings and Peer to Peer savings.
  • This fluctuates a lot as I get paid quarterly (and I got paid this quarter, so looking very healthy now)

Investment

  • This is my long term investing in a tax sheltered NISA (and £1k of shares I’m waiting to rise)
  • The aim is to through all my money in this and max it out with £15k each year going forwards

Pension

  • A combination of an old employer pension, and a SIPP I pay my pension into now and self manage
  • Currently pay £1k a month into the SIPP

Home

  • My house where I live, it’s a lovely 3 bed semi in Outer London
  • I value this using the Nationwide House Price Index, I’ve also done loads of improvements, which haven’t been factored in

Car

  • My run-around – I depreciate this by a fixed £100 each month, and check if against used prices occasionally and adjust as needed

Credit Card

  • A balancing item for any items on credit cards – I pay these off monthly and don’t carry any balances month to month, but as I count my current account balance as a cash asset, need to offset this

Mortgage

  • The mortgage on my home, am very happy that this is now < 60% LTV
  • I have been overpaying this by £500/month, this money is now going to go into investments after I remortgage

HMRC Tax

  • As I’m self employed I need to pay my own taxes, this includes any amounts I owe HMRC, both from the previous tax year that isn’t due yet, and an estimated amount from this year’s work. This includes the final part of my student loan, which will soon be history
  • I keep enough money in cash to cover this liability

Investing 101

OK, I’m now taking my own version of Investing 101, by reading the following key texts

  • The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein
  • A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel

4 Pillars       Random Walk

 

Wow, was my first though after reading them – there is so much I need to learn and take in – I knew I was a novice, but after reading these I’m realising how much more there is to understand.

My eyes have really been opened  – and some previously held beliefs have been really challenged

  • Beating the market is a myth – very few people actually achieve this on an ongoing basis
  • Beware fees and charges
    • Financial advisors are salesmen – pure and simple – their aim is to separate you from as much as your money as possible
    • Managed funds have high charges, and don’t beat the market
  • Be realistic when evaluating company values
    • There are loads of tricks and accounting scams that have been used over the years
    • Watch out for the bubble….don’t get sucked into buying the latest version of tulip bulbs

My investment philosophy has really changed, and  now understand I am not intelligent enough to beat the market, so I should just track them – the markets are inherently efficient.

I’ve now rearranged my meagre investments into low cost index funds.

 

How I’m going to get there

Welcome to my blog – as part of my new philosophy of  “Good Financial Choices” I want to improve my finances, by making good solid choices that will take me to my ultimate goals.

I’ve got the long term goal to grow my net work to £1,000,000 , and I’m going to set my first mini-goal now. This mini-goal will help me toward the main goal, and is a SMART Goal. Now I’m committing to it publicly.

First Goal

  • Put the full £15k in my ISA this tax year (by April 2014)

In order to meet this goal, I’ve got some simple plans to enable me to make the right choices.

Simple Plans:

  • Now I’m under the 60% LTV on my mortgage, no more overpaying mortgage, instead all the money will go into my ISA
    • I’ve been overpaying £500 a month to my mortgage, this will be diverted from October
    • Also ensure I re-mortgage to a lower interest rate (now I’m under 60% LTV)
  • Keeping paying £1k a month into my pension, and increase with any increased contract rate (pay rise)
  • Learn more about investing, to ensure my money is working as hard as it can for me
  • Frugal-ness – my spending has increased recently, have a look at what can be trimmed and invested instead
    • I need to challenge myself more, and do the ‘Do I really need this’ test
    • Find more frugal days out and ways to socialise without spending money