The pursuit, even of the best things, ought to be calm and tranquil.

Cicero

This is my fifteenth portfolio update. I complete this update monthly to check my progress against my goals.

Portfolio goals

My current objectives are to reach a portfolio of:

• $1 476 000 by 31 December 2018. This should produce a real income of about $58 000 (Objective #1).
• $2 041 000 by 31 July 2023, to produce a passive income equivalent to $80 000 in 2017 dollars (Objective #2)

Both of these are based on a real return of 3.92%, or a nominal return of 7.17%

Portfolio summary

• Vanguard Lifestrategy High Growth – $704 616
• Vanguard Lifestrategy Growth  – $42 310
• Vanguard Lifestrategy Balanced – $74 994
• Vanguard Diversified Bonds – $102 353
• Vanguard ETF Australia Shares (VAS) – $76 562
• Telstra shares – $4 652
• Insurance Australia Group shares – $20 358
• NIB Holdings – $8 436
• Gold ETF (GOLD.ASX)  – $77 905
• Secured physical gold – $10 684
• Ratesetter (P2P lending) – $48 179
• Bitcoin – $154 110
• Acorns app (Aggressive portfolio) – $9 895
• BrickX (P2P rental real estate) – $4 370

Total value: $1 339 424 (+$23 490)

Asset allocation

• Australian shares –  32 %
• International shares – 18%
• Emerging markets shares – 2%
• International small companies – 3%
• Total shares – 55.4% (5.6% under)
• Australian property securities – 3%
• International property securities 3%
• Total property – 6.2% (1.2% over)
• Australian bonds – 10%
• International bonds – 9%
• Total bonds – 19.6% (0.6% over)
• Cash – 1.3%
• Gold – 6.6%
• Bitcoin – 11.5%
• Gold and alternatives – 18.1% (3.1% over)

Comments

This month my attention has been focused on the small and welcome breakout of media exposure to the Australian FI movement, including Pat the Shuffler’s ABC piece, Aussie Firebug’s followup interview, and a broader piece in Fairfax on the movement as a whole.

Another activity carried over from last month has been continuing to optimise my insurance coverage. Previously, I had faithfully paid my home contents insurance each year, resolving to test the market next year, when I had more time. Over an hour or so one weekend recently, this finally happened. Four or five quotes later, I had a offer that saved around $180 per year, for the same coverage from a major reputable insurer. Most surprising was the reaction when I phoned my current provider, and asked them to consider the competing offers, and whether they wanted to adjust their quote. They offered a nominal discount, but indicated they could and would not match even the average of other offers. So from this month, I have switched providers and invested the difference in Acorns.

Bitcoin’s recovery from it’s falls earlier this year was the most dominant element of portfolio performance this month. A slow withdrawal from both Ratesetter and a drawdown of surplus funds in my emergency fund are providing a good cashflow to consider future quarterly investments in shares, in which I am still underweight. Other parts of the portfolio have not moved significantly.  Gold securities have risen, and most share markets have partially or fully recovered from the recent sharp falls, and much heralded return to volatility

Progress

Progress to:

• objective #1: 90.5% or $136 575 further to reach goal.
• objective #2: 65.6% or $701 575 further to reach goal.

Summary

This month has felt like a calm and steady accumulation of assets, even as market, portfolio volatility has fallen away. The growth in the overall portfolio is starting to be a increasing factor in thoughts about how I spend my time in the future, at the moment providing a cushion against uncertainty. Slowly, I am beginning to have more deliberate thoughts about how I value my time, what tradeoffs I am prepared to make for how long, and what ‘next’ could possibly look like.