Ships and sails proper for the heavenly air should be fashioned.
Johannes Kepler, Letter to Galileo (1609)
Twice a year I prepare a summary of total income from my financial independence portfolio. This is my twelfth portfolio income update since starting this record. As part of the transparency and accountability of this journey, I regularly report this income.
My primary goal is to maintain a portfolio of at least $2,620,000 which is capable of providing a passive income of around $91,600 (in 2022 dollars).
Portfolio income summary
Investment
Amount
Vanguard Lifestrategy High Growth (retail fund)
$32,182
Vanguard Lifestrategy Growth (retail fund)
$1,539
Vanguard Lifestrategy Balanced (retail fund)
$1,871
Vanguard Diversified Bonds (retail fund)
$187
Vanguard Australian Shares ETF (VAS)
$17,129
Vanguard International Shares ETF (VGS)
$3,224
Betashares Australia 200 ETF (A200)
$11,230
Telstra shares (TLS.ASX)
$43
Insurance Australia Group shares (IAG.ASX)
$76
NIB Holding shares (NHF.ASX)
$132
Plenti/Ratesetter (P2P lending)
$25
Raiz app (Aggressive portfolio)
$260
Spaceship Voyager app (Index portfolio)
$47
BrickX (P2P rental real estate)
$24
Total Portfolio Income – Half-Year to June 30, 2022
$67,968
The chart below sets out the income or distributions received on a half-yearly basis from the financial independence portfolio over the past six years.
Begin doing what you want to do now. We are not living in eternity. We have only this moment, sparkling like a star in our hand and melting like a snowflake.
Sir Francis Bacon
This is my sixty-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 $2,620,000 through 2022. This should be capable of producing an annual income from total portfolio returns of about $91,600 (in 2022 dollars).
A secondary focus through 2022 will be achieving the minimum equity target of $2,100,000.
Portfolio summary
Vanguard Lifestrategy High Growth Fund
$722,974
Vanguard Lifestrategy Growth Fund
$38,832
Vanguard Lifestrategy Balanced Fund
$70,238
Vanguard Diversified Bonds Fund
$88,101
Vanguard Australian Shares ETF (VAS)
$345,217
Vanguard International Shares ETF (VGS)
$318,198
Betashares Australia 200 ETF (A200)
$262,967
Telstra shares (TLS)
$2,052
Insurance Australia Group shares (IAG)
$5,524
NIB Holdings shares (NHF)
$8,856
Gold ETF (GOLD.ASX)
$119,070
Secured physical gold
$18,961
Plenti (P2P lending)
$12
Bitcoin
$313,070
Raiz app (Aggressive portfolio)
$18,915
Spaceship Voyager app (Index portfolio)
$3,110
BrickX (P2P rental real estate)
$4,719
Total portfolio value
$2,340,816 (-$281,221)
Asset allocation
Australian shares
39.6%
Global shares
28.1%
Emerging market shares
1.7%
International small companies
2.1%
Total international shares
32.0%
Total shares
71.6%(-8.4%)
Total property securities
0.2%(+0.2%)
Australian bonds
2.7%
International bonds
6.2%
Total bonds
8.9%(+3.9%)
Gold
5.9%
Bitcoin
13.4%
Gold and alternatives
19.3%(+4.3%)
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month has seen the third largest decline in the portfolio since this record began in 2017 – with a loss in total value of over $281,000.
These falls follow two previous consecutive monthly losses, marking an unprecedented period of continuous losses extending since April.
Overall, the portfolio lost 10.7 per cent of its starting value in the past month. This has drawn it back to levels last seen in early 2021.
The portfolio has consequently fallen below the revised portfolio goal of $2.62 million at the end of the month, meaning the notional option to cease paid work has evaporated quickly, and perhaps for some time.
Just over one-third of the losses this month occurred in the traditional assets of equities, with some additional losses in fixed interest. A little less than two-thirds of the monthly fall in value is a function of some major price falls in the Bitcoin portfolio (of around 36 per cent).
Australian equities were one of the areas of most substantial losses, with falls of around 8.5 per cent. By comparison, international equities (and particularly US equities on an unhedged basis) fell around 5.0 per cent.
Bonds continued to perform poorly, losing around 2.7 per cent, while gold holdings slightly increased in value (around 2 per cent).
