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).
Make a spot in the middle of your mind where you can lie hidden, rejoice, and relax with no one interrupting you.
Petrarch
This is my sixty-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 $2,620,000 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
$763,710
Vanguard Lifestrategy Growth Fund
$40,760
Vanguard Lifestrategy Balanced Fund
$73,303
Vanguard Diversified Bonds Fund
$90,568
Vanguard Australian Shares ETF (VAS)
$378,234
Vanguard International Shares ETF (VGS)
$320,331
Betashares Australia 200 ETF (A200)
$287,538
Telstra shares (TLS)
$2,068
Insurance Australia Group shares (IAG)
$5,536
NIB Holdings shares (NHF)
$8,868
Gold ETF (GOLD.ASX)
$116,688
Secured physical gold
$18,607
Plenti (P2P lending)
$23
Bitcoin
$487,750
Raiz app (Aggressive portfolio)
$20,142
Spaceship Voyager app (Index portfolio)
$3,196
BrickX (P2P rental real estate)
$4,715
Total portfolio value
$2,622,037 (-$158,939)
Asset allocation
Australian shares
38.2%
Global shares
25.9%
Emerging market shares
1.6%
International small companies
2.0%
Total international shares
29.5%
Total shares
67.7%(-12.3%)
Total property securities
0.2%(+0.2%)
Australian bonds
2.5%
International bonds
5.8%
Total bonds
8.3%(+3.3%)
Gold
5.2%
Bitcoin
18.6%
Gold and alternatives
23.8%(+8.8%)
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month is a story in two parts – with declines across both the traditional financial portfolio, and in the value of Bitcoin holdings.
Combined, these led to an overall loss of about $159,000 or around 5.7 per cent of the total portfolio value.
The portfolio has narrowly stayed above the revised portfolio goal of $2.62 million at the end of the month, but through the month dipped below it for the first time in nearly a year.
More than three-quarters of the absolute decline in portfolio value was caused by a fall of around 20 per cent in the price of Bitcoin over the month.
These falls occurred as inflation outcomes continued to illustrate the potential need for monetary policy tightening to the market, and the price of Bitcoin was also likely impacted by the failure of the Terra Luna algorithmic stablecoin.
The remainder of the portfolio loss was largely attributable to simultaneous declines in Australian and global share indexes. These each fell between 2 to 2.5 per cent.
Completing the overall negative pattern were falls in gold (of 3.3 per cent) and continued further declines in the value of bonds or fixed interest (0.2 per cent).
The shouting, wounds, and blood were in plain view, the cause was hidden: fortune ruled the rest
Tacitus, Annals, Bk.I
This is my sixty-fifth 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
$780,458
Vanguard Lifestrategy Growth Fund
$41,461
Vanguard Lifestrategy Balanced Fund
$74,230
Vanguard Diversified Bonds Fund
$90,708
Vanguard Australian Shares ETF (VAS)
$389,075
Vanguard International Shares ETF (VGS)
$315,367
Betashares Australia 200 ETF (A200)
$295,734
Telstra shares (TLS)
$2,153
Insurance Australia Group shares (IAG)
$5,752
NIB Holdings shares (NHF)
$8,496
Gold ETF (GOLD.ASX)
$120,610
Secured physical gold
$19,357
Plenti (P2P lending)
$23
Bitcoin
$609,240
Raiz app (Aggressive portfolio)
$20,349
Spaceship Voyager app (Index portfolio)
$3,252
BrickX (P2P rental real estate)
$4,711
Total portfolio value
$2,780,976 (-$115,727)
Asset allocation
Australian shares
37.0%
Global shares
24.5%
Emerging market shares
1.5%
International small companies
1.9%
Total international shares
28.0%
Total shares
65.0%(-15.0%)
Total property securities
0.2%(+0.2%)
Australian bonds
2.4%
International bonds
5.5%
Total bonds
7.9%(+2.9%)
Gold
5.0%
Bitcoin
21.9%
Gold and alternatives
26.9%(+11.9%)
Presented visually, the chart below is a high-level view of the current asset allocation of the portfolio.
Comments
This month twin winds hit the portfolio, leading to an overall loss of $115,000, or 4 per cent.
As a result, over half of the gains of the previous month were erased.
The portfolio is currently within sight, though a bit above, its total value twelve months ago. The past year has been a relatively volatile period in absolute terms, reinforced by the growth in the overall size of the portfolio, and its exposure to Bitcoin.
The value of the portfolio continues to be above the revised portfolio goal of $2.62 million, as it has since late July last year.
This month Bitcoin declined significantly, falling around 13 per cent, representing the largest part of the overall decline. By contrast, gold enjoyed a positive capital return of around 4 per cent over the month.
International share holdings also fell by 2.8 per cent amidst strong signs of monetary tightenings to come in developed economies. Australian shares produced a negative return of around 0.5 per cent, once distributions were accounted for.
Continuing the negative picture, bond holdings fell by 2.6 per cent. This means in dollar terms the bond portfolio holdings are at their lowest value since late 2015, and are also close to their lowest level ever as a proportion of the portfolio.
