This was my first full year of tracking my Net Worth. I started tracking it when I first bought my house, which was in July 2020. While covid-19 sucked for me personally, I was lucky enough that it actually really fast tracked my finances- which is more lucky than most. Thanks to my work in a needed field, there was an abundance of work as a paramedic and I was able to complete a lot of overtime and fast track my goals. Since March 2021 however, I have been working only part time, which was initially so I could play for the Mount Gambier Pioneers in the NBL 1 South Conference. While this did take an impact on my finances, I feel so lucky to have been able to play. It took a lot of commitment, but meant I got to play against some of the best basketballers in the country, including a few Tokyo Olympians here and there. Not many people have the opportunity to ever do that so I am super thankful.
Even though the basketball season is now over, I have decided to sign up to an extended part time contract. My mental and physical health is much better when I am at work less, and this contract is also days only, meaning I do not have to do those gruelling night shifts. My life is better for it, and you can’t put a price on that!
Despite a significant decrease in pay, I have found I am even better with my finances now than I was before. Whether it is the blog that is helping to keep me accountable and focused, or the fact that I have less money which makes me care for it more, who knows! All I know is I am feeling very motivated and dialled in with my money, so I am super excited for the next year.
Before I focus too much attention on the year to come, I want to look back on 2021 and reflect on how I did with my finances.
The Beginning of 2021
As I said earlier, the second part of 2020 was a good financial time for me (we will not delve into the personal stuff). I was working a lot, saving lots of money, and had absolutely nowhere to spend it thanks to state and international border closures. Therefore, in January 2021, I was in a good position. I had purchased my home six months ago, so was well and truly settled in that, I had built my emergency fund back up to where I wanted it, and was ready for the international borders to open (lol).
Here is a graph of where my money was sitting:
I was able to put down a healthy 20% deposit thanks to a combination of cheap rural housing and a slow housing market due to the start of the pandemic. When I bought my home there were fears the market would drop 30% by the end of the year. Turns out the market did the complete opposite and I was lucky to have bought when I did! Having a long term focus was the true reason I bought when I did and why I benefited from that.
As an employee of SA Ambulance we are required to make additional payments to our super. As a result, for the last five years I have been employed, my contributions have been set at 14.5% (10% by the employer, 4.5% by me). While initially I would have loved that 4.5% coming into my bank account instead, I’ve realised just how beneficial this money has been for my super. I probably have more than most 25 year olds in my super, and a lot of that comes down to the extra contributions.
My investing was pretty erratic in 2019 & the start of 2020. I was regularly contributing but didn’t really have a set plan. I was still learning as well so what I was investing in was a bit all over the place. While it was mainly still ETF’s, it was quite a few that ended up overlapping. By the end of 2020 I had started to invest more regularly and was seeing success because of that.
Thanks to the pandemic, life is pretty uncertain, so I was sitting cash heavy throughout the year. I was also saving to buy a car, which recently have been very pricey thanks to what seems to be global shortages. With no end in sight in regards to border closures, any extra income I received I was channelling into investments instead of holiday savings. I also moved to the platform Pearler, which allows you to set up an auto-invest function. This means it takes the thinking out of investing and helped me regularly contribute and invest in shares. As a result of these, my investment portfolio grew significantly throughout the year. The long term plan is to grow this enough that I can live off of the dividends, so this is a great start!
I have only been paying the minimum off of my house here in Mount Gambier as I eventually intend on converting it into an investment property. Debt for an investment property is tax deductible, so I don’t see the point in paying that down at this stage. My interest rate is also only 2.7% at the moment, and I can get a better rate of return by using my additional cash investing in the share market rather than paying off my mortgage.
Any cash savings I do have are sitting in my offset account anyway, which means I am paying less interest while that is there.
The End of 2021
At the end of 2021 I find myself in a good place. I found a car a few weeks before the end of the year so managed to tick that off in my 2021 goals. I now have a sound investing strategy, and I am consistently investing in 3 different ETF’s that cover the best companies in the world. Borders are open (kind of) which means travel will hopefully be on the cards for this year. I am part time and plan to take full advantage of my time off and open borders to explore more of Australia and tick some stuff off the bucket list.
2021 Net Worth Summary
Here is a graph of where my money is now sitting:
You’ll notice my cash has gone down significantly (thanks to my new car), and my home equity has also decreased in %. In fact, my home equity has increased but thanks to the large increases in my share portfolio and super, they are now a larger portion of my net worth. I am also waiting to have my house revalued which I think is now much higher than what I bought it for, so that will be interesting to see how it effects my net worth.
My total net worth increased in 2021 by a total of:
Where did most of this come from ?
Income from my job