This is my ninety-seventh monthly portfolio update. I complete this regular update to check progress against my goal.
Portfolio goal
My objective is to maintain a portfolio of at least $3,000,000. This should be capable of producing an annual income from total portfolio returns of about $103,500 (in 2025 dollars).
A secondary focus will be maintaining the minimum equity target of $2,400,000.
Portfolio summary
Vanguard Lifestrategy High Growth Fund
$930,271
Vanguard Lifestrategy Growth Fund
$47,055
Vanguard Lifestrategy Balanced Fund
$81,639
Vanguard Diversified Bonds Fund
$91,293
Vanguard Australian Shares ETF (VAS)
$570,410
Vanguard International Shares ETF (VGS)
$834,689
Betashares Australia 200 ETF (A200)
$330,508
Telstra shares (TLS)
$2,110
Insurance Australia Group shares (IAG)
$11,656
NIB Holdings shares (NHF)
$6,948
Gold ETF (GOLD.ASX)
$201,058
Secured physical gold
$31,595
Bitcoin
$1,857,719
Raiz app (Aggressive portfolio)
$26,452
Spaceship Voyager app (Index portfolio)
$4,540
BrickX (P2P rental real estate)
$4,684
Plenti Capital Note and Flex Market
$89,039
Total portfolio value
$5,121,666 (+$300,142)
Asset allocation
Australian shares
25.6%
Global shares
24.8%
Emerging market shares
1.0%
International small companies
1.2%
Total international shares
27.0%
Total shares
52.6%(-27.4%)
Total property securities
0.1%(+0.1%)
Australian bonds
3.2%
International bonds
3.3%
Total bonds
6.4%(+1.4%)
Gold
4.5%
Bitcoin
36.3%
Gold and alternatives
40.8% (+25.8%)
Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month the portfolio saw strong growth – of $300,000 – or 6.2 per cent.
This is the third largest monthly increase ever registered across the journey. The last 12 months has been the most significant period of expansion in the portfolio ever experienced.
The growth was substantially due to further increases in the value of Bitcoin holdings, which increased around 12 per cent across the month, combined with further gains in equities.
This has pushed the headline portfolio above $5.0 million for the first time in the journey.
At a headline level, the portfolio has therefore doubled since the end of 2022, again, largely due to the impact of Bitcoin. Looking just to the traditional financial portfolio, this has expanded by around 50 per cent over the same period, despite an absence of regular new investments across the last year.
Australian equity holdings provided gains of about 3.5 per cent in price terms, with distributions adding another 1.3 per cent to this. International shares also produced capital appreciation of 3.2 per cent, for a total monthly return of 3.7 per cent when distributions are accounted for.
Bond holdings produced a small capital gain of 0.2 per cent.
Gold continued its strong performance with an increase of just over 7 per cent for the month. Interestingly, this means that with the recent gold price increases, gold holdings are quite close to their target level of holdings. The value of gold holdings has doubled in nominal terms since mid-2019.
J.R.R Tolkien, ‘Walking Song’, The Lord of the Rings
Twice a year I prepare a summary of total income from my financial independence portfolio. This is my seventeenth portfolio income update since starting this record. As part of the transparency and accountability of this journey, I regularly report this income.
As discussed in my recent post, my primary goal is to maintain a portfolio of at least $3,000,000 which is capable of providing a passive income of around $103,500 (in 2025 dollars).
Portfolio income summary
Investment
Amount
Vanguard Lifestrategy High Growth (retail fund)
$11,622
Vanguard Lifestrategy Growth (retail fund)
$497
Vanguard Lifestrategy Balanced (retail fund)
$792
Vanguard Diversified Bonds (retail fund)
$279
Vanguard Australian Shares ETF (VAS)
$10,919
Vanguard International Shares ETF (VGS)
$5,797
Betashares Australia 200 ETF (A200)
$6,146
Telstra shares (TLS.ASX)
$48
Insurance Australia Group shares (IAG.ASX)
$215
NIB Holding shares (NHF.ASX)
$168
Plenti/Ratesetter (P2P lending)
$3,052
Raiz app (Aggressive portfolio)
$324
Spaceship Voyager app (Index portfolio)
$0
BrickX (P2P rental real estate)
$13
Total Portfolio Income – Half-Year to December 31, 2024
$39,872
The chart below sets out the distributions received on a half-yearly basis from the financial independence portfolio over the past eight years.
Even as the sea threatens, he seeks the shore and safety
Homer, The Odyssey, Book V.297
Year in Review
This year just passed featured three main objectives to guide the journey towards financial independence.
First, a focus on maintaining the portfolio at a level above the portfolio target. A second object was achieving a minimum equity holding of at least $2.3 million. The third was reaching a cash reserve equal to typical total spending in a year.
Each of these objectives has been achieved through 2024.
They have been conditions for acting to change my working arrangements and plans. Through the last month or so, their achievement has allowed me to begin to move to do just that, and to set out a plan to step back to permanent part-time work, on an intellectually interesting project I continue to want to be involved in delivering.
The progress of the year can also be highlighted by recourse to the measures adopted at the beginning of the year. In each case, these have surpassed the target benchmark.
Measure
Progress
Portfolio objective – $2,870,000
116%→168%
Financial portfolio income as % of total average expenses(2013-present) – $88,900
102%→123%
Target equity holding in portfolio – $2,300,000
98%→114%
Financial portfolio income as % of target income – $99,000 pa
92%→110%
The portfolio itself has grown from $3.3 million to $4.8 million through the course of this year. This leaves the portfolio at more than double its nominal value of just four years ago.
That substantial expansion over this passed and prior years clearly reflects the growth in the value of Bitcoin holdings over time, as well as, to some extent, the increases in the value of gold holdings in the past several years.
This is highlighted by the chart below, which tracks the allocation to gold and Bitcoin at the commencement of each year, beginning from the first purchases of gold ETFs in mid-2009.
This recent growth now means that the combined contribution to the portfolio of both of these assets is sitting at an all-time high of 38.8 per cent, having previously being largely bounded between 10 and 25 per cent.
Yet, the most fundamental change has probably been the expansion of the equity holdings in the portfolio from $2.24 million at the end of 2023, to now approximately $2.62 million – around a $400,000 growth.
It is this which has ultimately given the confidence to make decisions around the shape of future work.
These diversified holdings across thousands of securities, in Australia and abroad are the bedrock of the financial independence journey I have followed. It is they that should, under most circumstances, provide income and capital growth to enable the protection of purchasing power into the future.
At the end of 2024 fixed interest instruments comprise around $327,000 of the portfolio, up around $100,000 since the beginning of the year.
Almost all of this recent expansion is due to the redirection of investments and distributions into Plenti Capital Notes. These are substantially more risky than a median bond holding, or cash, as indicated by the level of offered returns, at around 9 per cent.
This expansion means that the level of fixed interest holdings sits at its highlest level in absolute terms in the journey.
An overall picture of the impact of these changes on the portfolio allocation can be seen below.
Broadly speaking, each other portfolio component has been reduced in prominence by the striking growth in Bitcoin over time, rendering the portfolio a different proposition – at least temporarily – from that which has faced any new year to date.
Reviewing the progress of the year
During this quiet part of the year I have spent time thinking about my investment journey, and the decisions made as well as those to come. I have not spent time, however, reconsidering the fundamental investment allocation and risk choices made throughout.
Previously, each year would end with a careful review of any developments in data, studies or academic literature on asset returns and volatility, to inform my future investment policy and safe withdrawal rate estimates.
This year, that seems a redundant exercise.
As the portfolio and equity goals are met, studiously reviewing the incremental data and reports is unlikely to materially shift the result of a sustainable safe withdrawal rate, or if it did, such a change would in turn be unlikely to result in a change in the overall portfolio goal.
The principal change I am likely to make is to update the portfolio goal to maintain its value in real purchasing power terms against the relevant earnings benchmark. As an illustrative example, simply assuming 3.5 per cent inflation over the past year as a placeholder, this would result in a new target of $2.97 million, and an updated secondary equity target of around $2.37 million.
As can be seen, both of these target are already met. Yet the magnitude of the increases from this process of updating should give pause.
They point the way to the substantial difficulty at the heart of reaching financial independence sustainably over time – the general advance of the price level over years.
One question I have over the set of distributions due to be finalised in coming days is: will there be evidence of the preservation of purchasing power in the distributions themselves? That is, will they be appreciably higher than, for example, two or three years ago in nominal dollar terms?
Some early estimates from the Vanguard and Betashares ETFs are that they are appreciably higher, but this is yet to be confirmed.
Unlike previous years, these distributions will not be automatically reinvested over time, and their fate is yet to be determined. When they are confirmed, however, the distributions will also again be reviewed in a separate portfolio income report.
Monthly Portfolio Update – December 2024
This is my ninety-seventh monthly portfolio update. I complete this regular update to check progress against my goal.
Portfolio goal
My objective is to maintain a portfolio of at least $2,870,000. This should be capable of producing an annual income from total portfolio returns of about $99,000 (in 2024 dollars).
A secondary focus will be achieving the minimum equity target of $2,300,000.
Portfolio summary
Vanguard Lifestrategy High Growth Fund
$910,564
Vanguard Lifestrategy Growth Fund
$46,264
Vanguard Lifestrategy Balanced Fund
$80,701
Vanguard Diversified Bonds Fund
$91,066
Vanguard Australian Shares ETF (VAS)
$551,071
Vanguard International Shares ETF (VGS)
$808,937
Betashares Australia 200 ETF (A200)
$319,282
Telstra shares (TLS)
$2,137
Insurance Australia Group shares (IAG)
$10,718
NIB Holdings shares (NHF)
$6,576
Gold ETF (GOLD.ASX)
$187,790
Secured physical gold
$29,510
Bitcoin
$1,653,703
Raiz app (Aggressive portfolio)
$25,155
Spaceship Voyager app (Index portfolio)
$4,337
BrickX (P2P rental real estate)
$4,713
Plenti Capital Notes Market Loan
$89,000
Total portfolio value
$4,821,524 (+$5,888)
Asset allocation
Australian shares
26.3%
Global shares
25.6%
Emerging market shares
1.0%
International small companies
1.3%
Total international shares
27.9%
Total shares
54.3%(-25.7%)
Total property securities
0.1%(+0.1%)
Australian bonds
3.4%
International bonds
3.4%
Total bonds
6.8%(+1.8%)
Gold
4.5%
Bitcoin
34.3%
Gold and alternatives
38.8% (+23.8%)
Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month the portfolio has only slightly grown, expanding just 0.1 per cent, or increasing in dollar terms through the month by just under $6,000.
This comes after substantial growth in past month, and falls well with the typical daily – or even hourly – variation of the value of the portfolio.
This month saw a welcome reassertion non-correlation between the asset classes, producing a balanced result overall.
Australian equity holdings returned losses of around 3.0 per cent over the month.
By contrast, with currency impacts playing a role, international equites provided a positive return of around 2.6 per cent. Bond holdings were also negative during the period (with losses of around 0.4 per cent).
Bitcoin made a small gain through the month, again likely assisted by currency impacts of a devaluing Australian dollar.
Gold holdings increased in value by grew in value by 3.5 per cent. Remarkably, this means that on average the gold ETF holdings accumulated since 2009 have outperformed all equities purchased over the same period, Australian and global.
This is my ninety-sixth monthly portfolio update. I complete this regular update to check progress against my goal.
Portfolio goal
My objective is to maintain a portfolio of at least $2,870,000. This should be capable of producing an annual income from total portfolio returns of about $99,000 (in 2024 dollars).
A secondary focus will be achieving the minimum equity target of $2,300,000.
Portfolio summary
Vanguard Lifestrategy High Growth Fund
$910,869
Vanguard Lifestrategy Growth Fund
$46,326
Vanguard Lifestrategy Balanced Fund
$80,874
Vanguard Diversified Bonds Fund
$91,446
Vanguard Australian Shares ETF (VAS)
$566,130
Vanguard International Shares ETF (VGS)
$787,977
Betashares Australia 200 ETF (A200)
$328,086
Telstra shares (TLS)
$2,100
Insurance Australia Group shares (IAG)
$10,756
NIB Holdings shares (NHF)
$6,816
Gold ETF (GOLD.ASX)
$181,423
Secured physical gold
$28,784
Bitcoin
$1,650,745
Raiz app (Aggressive portfolio)
$25,318
Spaceship Voyager app (Index portfolio)
$4,275
BrickX (P2P rental real estate)
$4,711
Plenti Capital Notes Market Loan
$89,000
Total portfolio value
$4,815,636 (+$507,442)
Asset allocation
Australian shares
26.9%
Global shares
25.2%
Emerging market shares
1.0%
International small companies
1.3%
Total international shares
27.6%
Total shares
54.4%(-25.6%)
Total property securities
0.1%(+0.1%)
Australian bonds
3.4%
International bonds
3.4%
Total bonds
6.8%(+1.8%)
Gold
4.4%
Bitcoin
34.3%
Gold and alternatives
38.6% (+23.6%)
Presented visually, the pie chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month the portfolio has seen outsized growth, of $507,000 or 11.8 per cent, due to substantial increases in the price of Bitcoin. This is the largest monthly growth in both absolute terms and in percentage terms since the record of this journey began at the close of 2016.
Even in the relatively earlier phases of the journey, where regular contributions were being added to a smaller absolute portfolio, it was unusual for the portfolio to shift in percentage terms by as much as experienced this month.
An expansion of this kind can easily be reversed in the future, as the past volatility of Bitcoin attests. For the moment, however, it has catapulted the total portfolio to an unanticipated level, at least temporarily changing its nature. Over the past year, for example, the portfolio has grown by over 50 per cent.
Looking only at the traditional financial assets, the monthly expansion in this value is significant, but not unprecedented across the journey, with these appreciating around $80,000 in net terms.
Australian equity holdings returned around 3.7 per cent over the month, with international equites returning around 4.0 per cent. Bond holdings also increased in value by around 1.3 per cent.
By contrast the value of gold securities fell by around 4.3 per cent, retreating from previous gains.
Bitcoin grew in value by around 35 per cent, building on already strong gains since August. This means that Bitcoin is at the highest proportion of the portfolio it has ever attained, representing over a third of portfolio assets and the single largest asset class.
