Welcome to my first Monthly Net Worth Post, I will be adding a bit more information in this post for some context on my current financial situation. Previously, I have focused on building a portfolio consisting of VAS, VTS & VEU. My target split was approximately 40% Australia, 40% US and 20% Global excluding the US market. This has worked well for me, and I have seen some good returns with this. However, I have recently changed my approach to investing. I am working towards a simpler, low-cost strategy.
As shown above, my portfolio is overcomplicated with small positions in many different assets. Over the last couple of years, I have invested heavily in Vanguard funds through Commsec. Commsec is a great platform however they charge a fee for purchases. I invest approximately $1000-$3000 a week, which requires $10 per transaction. This fee is unnecessary when there are brokers that offer lower fees.
My new approach to investing is buying extremely low-cost exchange traded funds. Focusing on low costs, diversification, dividends and potential growth. I am purchasing through CMC Markets, which charge no fee when purchasing less than $1000 worth of stock per day. This works well for me, as I enjoy the smaller more frequent investments. It keeps me engaged, interested and I don’t lose patience between purchases.
My stock of choice is currently the lowest cost ETF in Australia, A200. Only charging a management fee of 0.04%. When purchased through a no fee broker this minimises my costs and puts all profits back into my pocket.
A200 also offers a decent dividend income. Sure, growth is important. But as someone who wants to live off my assets in the next 10 years a stable dividend income is important to me.
Moving onto Net Worth. I have not included depreciating assets such as cars in this amount. I’m currently sitting on more cash than usual, as I accessed $90,000 of home equity for renovations.
My new goal is to be in a position in 10 years where working is a choice. I have a great job with a great income; but I would like to remove the burden of feeling tied to a job. I want to be in a position where I could decide to retire whenever I please. My current income allows me to invest approximately $2300 a fortnight. Assuming an 8% return, I could have access to $1 million in assets in 10 years.
I will continue to invest weekly, focus on lowering my costs and keeping it simple. Why overcomplicate it? Life is complicated enough, and this is a long-term goal.
King Regards,
Mr Impatient.