Portfolio Income Update – Half Year to December 31, 2020

Posted on January 10, 2021March 24, 2022 by The FI Explorer

I must go down to the seas again, for the call of the running tide
Is a wild call and a clear call that may not be denied;
And all I ask is a windy day with the white clouds flying,
And the flung spray and the blown spume, and the sea-gulls crying.
John Masefield, Sea Fever

Twice a year I prepare a summary of total income from my portfolio. This is my ninth portfolio income update since starting this record. As part of the transparency and accountability of this journey, I regularly report this income.

My goal is to build up a portfolio capable of providing a passive income of around $90 500 by July 2022 (Portfolio Goal).

Portfolio income summary

Investment	Amount
Vanguard Lifestrategy High Growth (retail fund)	$26,278
Vanguard Lifestrategy Growth (retail fund)	$1,799
Vanguard Lifestrategy Balanced (retail fund)	$3,217
Vanguard Diversified Bonds (retail fund)	$4,469
Vanguard Australian Shares ETF (VAS)	$3,071
Vanguard International Shares ETF (VGS)	$793
Betashares Australia 200 ETF (A200)	$3,037
Telstra shares (TLS.ASX)	$43
Insurance Australia Group shares (IAG.ASX)	$0
NIB Holding shares (NHF.ASX)	$48
Plenti/Ratesetter (P2P lending)	$343
Raiz app (Aggressive portfolio)	$77
Spaceship Voyager app (Index portfolio)	$0
BrickX (P2P rental real estate)	$37
Total Portfolio Income – Half-Year to December 31, 2020	$43,212

The chart below sets out the income or distributions received on a half-yearly basis from the financial independence portfolio over the past five years.

Dead Reckoning – Setting a New Portfolio Goal and Safe Withdrawal Rate

Posted on January 7, 2021January 8, 2021 by The FI Explorer

To unpath’d waters, undream’d shores
Shakespeare A Winters Tale, Act 4, Scene 4

This exploration began four years ago, with an initial objective of building a passive income of $58,000 per annum by July 2021. Since that time, goals have evolved and changed enabling bringing forward the achievement of this initial goal.

Each year in early January I spend time reviewing my investment goals and how I plan to reach them.

This post explains the findings from my annual review, details my updated portfolio goal and assumptions, and discusses how I will approach my financial independence journey through 2021 and beyond.

The aim is to have a clear written record of the objectives, approaches and reasoning underlying the plan, to serve as a reference point through the year. The process also enables the updating of plans and assumptions for changes in circumstances, thinking, as well as data and evidence.

Ports of call and the future of the voyage

In the middle of December 2020 I passed the single portfolio objective I set myself in early 2020, six months earlier than targeted.

Standing to Port – Year in Review and Monthly Portfolio Update – December 2020

Posted on January 1, 2021March 24, 2022 by The FI Explorer

In order to arrive at what you do not know
You must go by a way which is the way of ignorance.
T. S. Eliot, Four Quartets – East Coker

Year in Review

The year past has been extraordinary in so many ways, entirely separate from the progress to the goal of financial independence.

Part of the structure of the year has been seeing elements of this new reality bleed into markets and economic developments, affecting the portfolio in profound ways.

At the the broadest level, the year saw the passing of my portfolio objective, in a rapid unexpected way in December. In fact, as can be seen below, this year saw the crossing of the last two outstanding portfolio measures.

Progress against FI measures through 2020

Measure	Portfolio	All Assets
Portfolio objective – $2,180,000 (or $87,000 pa)	82%→104%	112%→136%
Credit card purchases – $71,000 pa	100%→127%	136%→166%
Total expenses – $89,000 pa	80%→102%	109%→133%

On an ‘All Assets’ basis – taking into account superannuation assets – the year saw further progress, to be well above the minimum levels required to sustain the portfolio income objective.

Course of the voyage

The progress of the year was steeped in volatility. This year saw the largest ever fall in the value of the portfolio, and also two of the largest ever monthly gains.

This volatility is clearly evidenced in the variations in the total end of month portfolio values in the chart below.

Overall the portfolio increased by over $500,000 through the full year. This is the largest rise in the value of the portfolio over a single year on record.

Quite simply, it has moved the portfolio to a different magnitude and scale of operation. The chart below of the overall value of the portfolio on a calendar year basis illustrates this alteration starkly.

It cannot be escaped that the largest single contributor to the increase over this year was a surge in the price of Bitcoin, leading to over $300,000 of the gains.

Equity markets, however, also pushed forward in the second half of the year, and the equity portfolio finished around $175,000 higher than the beginning of the year. The gold component of the portfolio also ended the year higher.

As the set out in the In Way of Harbour post two weeks ago, combined this progress resulted in the passing of the portfolio objective in mid-December.

The FI Explorer

Journeys in financial independence

Month: January 2021