If you have a garden and a library, you have everything you need.

Marcus Tullius Cicero

This is my fourth portfolio update. I aim to update this monthly to check my progress against my original goals.

Portfolio goal

My current portfolio objective is to reach a portfolio of $1 476 000 by 1 July 2021. My plan is that this should produce a real income of about $58 000. This is based on a real return of 3.92%, or a nominal return of 7.17%.

Portfolio summary

• Vanguard Lifestrategy High Growth – $608 318
• Vanguard Lifestrategy Growth  – $42 808
• Vanguard Lifestrategy Balanced – $76 407
• Vanguard Diversified Bonds – $111 730
• St Andrews ‘Top 200’ Australian shares (indexed) – $12 294
• Telstra shares – $6 211
• Insurance Australia Group shares – $15 112
• NIB Holdings – $7 104
• Gold ETF (GOLD.ASX)  – $75 087
• Secured physical gold – $4 146
• Ratesetter (P2P lending) – $55 516
• Bitcoin – $13 509
• Acorns app (Aggressive portfolio) – $4 652
• BrickX (P2P rental real estate) – $2 277

Total value: $1 035 183

Asset allocation

• Australian shares – 31%
• International shares – 20%
• Emerging markets shares – 3%
• International small companies – 3%
• Total shares – 57% (8% under)
• Australian property securities – 4%
• International property securities 3%
• Total property – 7%
• Australian bonds – 13%
• International bonds – 12%
• Total bonds – 25% (10% over)
• Cash – 1.7%
• Gold and alternatives – 9.0%

Comments

The overall portfolio is up around $21 000 this month from a combination of new investments and market movements. I remain as concerned as in past months about both equity markets and property markets. Pilots of fast jets, passenger and military, are taught about the aerodynamic concept of the ‘coffin corner’  – an extreme combination of altitude and speeds, at which the ‘stall’ speed at which an aircraft will fall out of the sky approaches the maximum functioning speed of an aircrafts wings.  Equity, and Australian property markets feel like they are creeping up on that corner.

Despite this, I continue to buy new units in Vanguard’s high growth index fund twice a month. These conditions have deterred me from expanding my BrickX holdings further, despite being impressed with the accessibility and features of the product they offer (including investor webinars, which I participated in a few weeks ago). Should the updraft continue, it brings me closer to my goals, should there be a sharp correction, I hope to feel easier about new contributions of capital.

Over the next month, these types of choices will become less theoretical, because an AMP owned  Australian equity index fund (‘Top 200’) is due to close, and return the capital to investors. There will also be some dividend income and bond fund payments. This will be the trigger for my next exploration, this time into Vanguard exchange traded funds, which I have been looking more closely at recently.

This past month has been very busy, so my main FI activities has been podcasts. I made my way through Aussie Firebug’s back catalogue of podcasts. It is amazing to hear an Australian turning out some really interesting interviews, so thank you!

Progress

Progress to goal: 70.1%

Summary

This is the first quarter which I have tracked through this blog. I am still intending to post more frequently, between monthly reviews. Increasingly, as dates in the medium term future are mentioned, I’m consciously wondering ‘what will I be doing at that time, will I have reached FI? and left work?’. Will a garden and a library suffice – as Cicero would say they should?

Progress does seem incremental and slow at this stage, but I realise this is an illusion. Annualised, my current trajectory would see my net worth increase by $200 000 this year, which seems impossible to conceive.