A person often meets his destiny on the road he took to avoid it.
Jean de la Fontaine
This is my one hundred and tenth 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 $3,250,000. This should be capable of producing an annual income from total portfolio returns of about $112,000 (in 2026 dollars).
This portfolio objective is based on an assumed safe withdrawal rate of 3.45 per cent.
A secondary focus will be maintaining the minimum equity target of $2,600,000.
Portfolio summary
| Vanguard Lifestrategy High Growth Fund | $984,041 |
| Vanguard Lifestrategy Growth Fund | $49,548 |
| Vanguard Lifestrategy Balanced Fund | $85,395 |
| Vanguard Diversified Bonds Fund | $94,309 |
| Vanguard Australian Shares ETF (VAS) | $673,809 |
| Vanguard International Shares ETF (VGS) | $986,442 |
| Betashares Australia 200 ETF (A200) | $343,574 |
| Gold ETF (GOLD.ASX) | $330,966 |
| Bitcoin | $1,340,262 |
| Plenti Capital Notes | $84,000 |
| Financial portfolio value (excluding Bitcoin) | $3,632,084 (+$38,077) |
| Total portfolio value | $4,972,346 (-$88,331) |
Asset allocation
| Australian shares | 28.4% |
| Global shares | 28.8% |
| Emerging market shares | 1.1% |
| International small companies | 1.4% |
| Total international shares | 31.3% |
| Total shares | 59.7% (-20.3%) |
| Australian bonds | 3.2% |
| International bonds | 3.5% |
| Total bonds | 6.7% (+1.7%) |
| Gold | 6.7% |
| Bitcoin | 27.0% |
| Gold and alternatives | 33.6% (+18.6%) |
Presented visually, the pie chart below is a high-level view of the current asset allocation of the full portfolio.
Comments
This month the portfolio fell by around $88,000, or 1.7 per cent.
This reflected significant declines in the price of Bitcoin (of nearly 9 per cent), against an unsteady period for most equity-based assets. There was relatively high volatility through the month under a variety of geopolitical strains.
The financial portfolio sits at the highest ever level, of $3.6 million, despite the overall ‘headline’ portfolio value being below the absolute levels of a year ago.
The chart below sets out the performance of both the full and ‘financial assets only’ portfolios since the commencement of the journey.
Across the month, geopolitical instability has driven market nervousness, and the rise in bond yields in Japan continues to signal an important regime shift in the deepest elements of the global financial architecture.
Yields on government debt are rising across Western economies, even as inflation is relatively contained in many jurisdictions. The fundamental price of ‘risk-free’ assets is changing, at a rather unanticipated pace, bringing with it question of ‘financial dominance’ and central bank independence. Developments in commodity markets and strategic metals, such as silver, were also in focus.
Australian equities benefited from some of these developments, rising around 1 per cent through this month. International equities fell modestly, by around 3 per cent, as US markets in particular reacted to the changing global trade and debt market conditions. Despite this, US market valuations, on this view, appear to remain relatively anchored when earnings growth and cash yield considerations are taken into account.
Gold has increased by an extraordinary 14 per cent over the month, exceeding the gains by Australian and international equities over the past twelve months.
Increasingly private investors, and central banks alike are rediscovering – at least temporarily – some of the hedging properties of gold. Over the past year, gold holdings have returned above 66 per cent. This has pushed the allocation to gold to the highest level in about 5 years, and in nominal dollar terms, means movements from here exert a far stronger impact than previously.
By contrast, Bitcoin has fallen by 28 per cent over the past year, and as mentioned fell sharply this month.
This month saw portfolio distributions received, of around $16,000, from the last quarter of 2025. These have been added to a cash fund that is proportionally reinvested through this year, with a portion also being set aside to meet expected tax liabilities.
Wings of time: portfolio compounding theory meets real-world data
Part of the function of this record has been to ‘test’ the theory of reaching financial independence in the real world, as opposed to the cells of an Excel spreadsheet, with their neat eliding of reality.
Tracking expenses and the portfolio’s safe withdrawal income is one dimension of this. Another is examining whether what is often called the ‘miracle of compounding’ occurs in quite the same manner as often presented in materials on financial independence or wealth-building more generally.
Recently, algorithms assisting, I have been interested to see a lot of Youtube financial independence themed content in my feed about various defining acceleration points, or milestones in the journey.
Typically, these relate to concepts like the portfolio assuming its own gradual momentum or central role in wealth generation, compared to new investments. That is, one’s portfolio ‘working harder’ than one’s own contributions.
Continue reading “Monthly Portfolio Update – January 2026”