August Net Worth Report

August 18 Net Worth Report: Back on Track

Posted by on 9 September 2018 in Net Worth Reports

Last month I shared my net worth to the public for the first time. I was pretty nervous — but I didn’t need to be!

So now I’m back for more, here is my August net worth report.

This month’s focus was to get back on track after spending lots and lots of money on my Europe trip in July. I’m proud to say that I was able to contain my spending, whilst finding a really fun (but still reasonably cheap) new hobby.

In fact, I’m starting to think that the secret to early retirement might just be persistence, being mindful about your spending, and appreciating the little things.

Read on to find out more…

Why do I post Net Worth Reports?

It’s very scary opening up my wallet and showing the world how much money I have. It forces me to consider some very confronting questions like “have I made the right decisions in life?” and “am I strong enough to show the world my failures?”.

But overall I think that there is value in documenting my journey to early retirement. Not only can people try to emulate my successes but — perhaps more importantly — they can avoid my failures

So here’s a full view of my income and expenses, and net worth, for August 2018. If you want to check out my other Net Worth Reports, you can check them out here.

What happened this month?

Compared to my Europe trip last month, this month was quite boring! Most of the month was spent settling back into my typical routine and catching up on work.

Speaking of which, work has been very busy this month. I can’t talk about specifics, but I’m working on a big deal that could help my company scale into something truly huge!

Anyway, despite all that, I found time to try out a new hobby: indoor bouldering.

Bouldering is a lot like rock climbing, except you don’t use ropes and you only climb 5 or so metres above the ground. It’s a great test of strength, skill and (surprisingly) patience.

A photo of a man climbing on an indoor bouldering wall

I found a new hobby: bouldering!

Bouldering is a great way to get myself out of my comfort zone and try something new. I’m building a new skill and the confidence that comes along with it.

Plus it’s very social — I went with a friend who helped me navigate the climbs while I was on the wall. It was a great bonding experience and a shared sense of accomplishment when we would each ‘top out’ a climb.

It’s a reasonably cheap hobby too. It only costs $20 a session and I plan on doing one bouldering session per week.

That definitely helped me make up for my spending last month. You may remember that I spent $4,000 more than I earned last month. Ouch!

I plan on looking for more hobbies like bouldering. That is, they are fun, help me build a new skill, are social, and are reasonably priced.

That said, let’s see how I did this month…

Income Statement

Last month’s Europe trip in July screwed up my spending, so last month was not a good reflection of how I spend my money.

On the other hand, August was reflective of a typical month of spending. Some things to note:

  1. My salary and rental income are back to normal. In July my salary was lower because I had to take unpaid leave, and my rental income was higher because I collected two months of rent both in July. This month my income sources are back to normal; I earn about $8,000 in salary and about $1,250 in rental income each month.
  2. Spending in each of my categories is mostly correct. I had a fully month of typical spending, so now you can see an accurate reflection of my monthly expenses.
  3. I was recouped about $1,400 of vacation spending from my partner. I lent $1,400 to my partner over the course of our vacation, which she paid back this month. That’s why my vacation expense category is positive.

After all is said and done, I was able to save $4,000 in July. I’m quite happy with saving $1,000 per week. That means I save about 42% of my income.

You might notice that most of my spending is my mortgage. In fact, my mortgage makes up almost 70% of my spending.

Unfortunately, I live in Sydney and house prices are ridiculously high here. I made a conscious decision to purchase my apartment to guarantee I have a place to live and to diversify my investments into property.

If we were to remove my mortgage expense from my spending, I’d be saving 82% of my income. That’s ridiculous!  But it’s also unrealistic because I need a place to live 🙁

Balance Sheet

Last month I showed how I was able to increase my net worth, even while I was spending tonnes of money on my vacation and not saving a penny.

I was able to do that because my investments and retirement account grew quite quickly in July.

However, in August I wasn’t as fortunate. I lost a little bit of money in my investment account and my retirement account only grew slightly. Damn!

But that’s the nature of investment: sometimes you win, sometimes you lose. And this is why it’s extra important to make sure you’re always saving. Because, despite the fact that I wasn’t able to make significant investment returns, I was able to save money over the month.

All in all, my net worth increased by $5,260 (1.6%) in August. Not bad considering my investments returned close to zero!

This month’s key insight

Every month I plan on sharing one key insight that helped me grow my wealth — and that might help you do the same.

This month’s insight is:

After a saving setback don’t feel disheartened, get back to your saving routine!

After spending lots and lots of money last month and having an absolutely awesome time in Europe, I didn’t really feel like saving much this month. But I persevered and now I feel like I’m back in the rhythm of saving.

And I’m much happier knowing that I had the willpower to do what’s right for my future.

Remember, it’s human nature to lose motivation after a setback or change in circumstance. But try to get back on track as soon as possible. It really pays dividends (no pun intended)!

Until next month, keep up the good work!

All the best,

Dan's signature

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