My Portfolio

My Portfolio will be changing every month, so what you see is not necessarily what you will see in 30 days. A HUGE warning to you is that this portfolio is nothing to write home about. I started on this journey a bit too late but I’m glad I did start. Like most personal finance bloggers, our main aim is early retirement.

Emergency Fund

It helps reading about what others save in their emergency fund. I can't remember the exact blog I was reading and the author mentioned one full year expenses as their target. At that point I was already above that and I had to stop and think about it. It makes perfect sense. I would wish we are covered for the full year should anything happen to our income like forced early retirement, rental units or the Mr’s job. Off course we would have to live below the provision we have made, allowing it to stretch even further. Well we are now at 131% of what we need in our EF. I since changed my mind and will be trimming that EF to a mere 3 to 6 months worth of expenses.

We save our emergency fund in the money market account. I like it that its totally liquid. It gains some nice interest which grows it further. The interest is just above R1000 per month currently. And I top it up by about R3800 to make it a nice R5000 round figure, because I love multiples of five. Meaning that, this account is growing by R5000. I no longer grow this account as I think it’s not necessary to grow it at all. It may even be stupid to grow it instead of acquiring more assets.

Home Equity

I never think of my home as an investment. It is just a home. But for interest sake, let’s have it here.
UPDATE: We paid our home up again.
We still owe a huge chunk at our home, but like I mentioned, we are trying to pay our mortgage up as quick as we can. Well, despite the economic recession, the value of our home crept up steadily. Its value (according to comparables) is now about 20-40% higher than the original purchase price six years ago. The difference between the current value and what we now owe is close to 50% 90%. The equity (what we own in the house) is about 52% 57% 88% of the current value. All of this doesn’t matter. We just want to own our home and not live in a bank’s house. Our target date for the final payment is 2013 July. That will even affect our emergency fund in a positive way. That’s because our monthly expenses with go even lower without a home loan. Yipeee!!!

Investments

Finally, comes our hope for early retirement. Our goal is getting more passive income from dividends, interest and rental units (and my tiny online income) to cover our expenses every month. Our/ my portfolio is totally skewed when it comes to investments, but this exercise is meant to rectify that. I don’t like it that we have so much equity on investment properties and not much in stocks, but hey, that’s how it is. At least for now. Lets go:
Rental Property: Our rental property is the only part of our investment portfolio that is on target. If I were to put it in percentage, it would be at 100% on the target or more. We managed to pay up all our rental units and acquired more. And we can live on the rental income comfortably tightly. That would have to be a bit of a frugal lifestyle. I am not looking at buying another property anytime soon. Just don't take my word for it. (Yes, we may be buying another one.) Rental Property target: 100% DONE.

Individual Stocks: A miracle is needed here. All I want is 50% of the rental property value. In all we are actually below 20% at 30% of the target. I also can’t believe that. Oh, wait, I forgot to addIndex funds, etc. Let’s add those as separate sub-units, shall we.

Unit Trusts: These are also below the value of the rental units. Let’s just say I am at 100% of my target because I am not wasting my money on unit trusts ever again. When the ones I have mature, I will get my cash and run as fast as I can. 100% DONE.Changed my mind. I will target between R200,000 and R500,000 worth of unit trusts to leave to grow as they wish. No I dont have this just yet.
UPDATE: I got rid of the unit trusts. I cant believe it took me that long to do so.

Retirement Annuities: The truth is that I wish I paid attention earlier to the tax benefits of contributing adequately to a retirement annuity. Maxing that benefit means a contribution of 15% of your income to your retirement annuity. In return, SARS gives you 35% of your contribution back. There are lots of ifs, and what nots there. It depends on whether you have another pension fund, like your employer's pension fund. I can just say, my contribution meets the 100% tax benefits. We now max this every year.We still have to add to our retirement accounts though.

Other Assets: I never want to add cars to this equation. But well we have two old ones. We don’t really have convenient public transportation in South Africa. Its just not easy to do without a car. 100% again.We are not buying soon, I hope. We need to buy a car.

SUMMARY:

INVESTMENTS	%Achieved	NOTES
Emergency Fund	50%20%	We have over-performed when it comes to this. We are keeping it at that. Its in an interest bearing money market account at.
Home Equity	87%100%	PAID UP. We still have to pay 12.4% of the property value. We are halfway there almost there. We are paying it up in a year or two a few months.
ETFs	100%	This is for my tax free savings.
Rental Property	100% 95%	No plans to buy a rental property for now. We are growing other categories of investments. My focus is on making the existing property work better.
Stocks	20% 30%	This is what we need to intensify on after paying up the home loan. I am working on this.
Retirement Accounts	100% 54%	Current value of retirement Annuities, Pension Accounts.

How is your portfolio and goals?