May 2021: Journey to Financial Freedom update

Welcome to Passive Income NZ, my Journey to Financial Independence. Every month I share how I am tracking towards financial freedom by providing you with an update of where my portfolio is at and how far I am from financial freedom, and how my spending is tracking. My definition of financial freedom is not really the same as everyone definition. It’s not to stop working; it is much more than that. It’s about living a more intentional life.

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The first day of winter is here- and the power bills are probably about to increase. Luckily- it doesn’t get that cold in the Bay of Plenty. In recent weeks I’ve been taking a bit of time off work to build a shed with a friend. This past year has been quite hard mentally. I’m sure you can relate. I think it was a good time to just slow down for a bit before burnout kicks in. So this update is going to be short.

Kernel’s new funds

In investing news- Kernel has released 3 new funds all focused on sustainability. There is the NZ 50 ESG Tilted– which is a portfolio that tracks the NZX 50 companies but instead of being weighted by size, each holding is weighted by their ESG characteristics. Then there is the Global Green Property fund which tracks the Dow Jones Global Select Green RESI index. And the S&P Global Clean Energy fund, which invests in up to 100 companies that are involved with clean energy.

I haven’t had a chance to look into each fund in-depth yet. The NZ 50 ESG Tilted looks the most attractive at face value due to the fee being lower than the other two. Then again- ESG investing is an important feature for many investors, so it’s good to have more options out there for ESG investing.


Investment Update

I’ve just submitted my FIF tax return to the IRD– which is not always funded since it usually means extra tax to pay. It does suck to have to pay tax but it also means that you have made some gains- so it’s a good feeling too.

Above is my portfolio value over time. May was another negative month for my portfolio, bringing the total to 11 out of 39 months or about 28% of months. I didn’t manage to save a lot in June- I’ve got a lot going on in my life that I’m trying to focus on instead. This is also why I haven’t been posting a lot.

Performance

In March my returns were looking great. And I stated then that I was under no illusion that these returns will likely not continue- and in May they have all had a significant drop from March’s returns.

  • InvestNow: 20.22 % (-11.64 %)
  • Kernel: 5.19 % (-5.03 %)
  • Genesis Energy: 28.65% (-16.16 %)
  • Kiwisaver: 34.03 % (-13.06 %)
  • Lending Crowd: 11.46 % (+0.02 %)
  • Harmoney: 10.14 % (+0.03 %)
  • Hatch: -9.89%

I now have a very small amount in Hatch Invest. This is I guess some play money to gain some experience of how the platform works. Besides that- it does give a bit of spice to my index investing. I do like the idea of having access to the very cheap international index funds- but at this stage- I am sticking with InvestNow and Kernel as my main investment platforms.

InvestNow: Returns from assets I hold are after fees and before tax for the last 12 months. Kernel Wealth: Internal rate of return since inception. Genesis Energy: Returns from capital gain and dividends in the last year. Calculated using Sharesight. Kiwisaver: Performance for the last year after fees and after-tax and membership fees. Lending Crowd: Net average return (NAR) is a calculated annualised return for your investment portfolio that’s calculated monthly on the 1st day of each month. Harmoney: Realised Annual Return (RAR) is a measure of the actual rate of return on funds invested in the Harmoney platform.


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2 thoughts on “May 2021: Journey to Financial Freedom update”

  1. Thanks for posting this update. It is always really interesting to see how fellow investors are faring. I am expecting that the phenomenal returns I have seen will not be sustained. Index investing over a longer period usually means a regression to the mean but this is double-edge sword as it also takes a lot out of risk of index investing obviously. Take and please avoid that burn-out, it has take me more than a year to recover from this when I experienced one fifteen years ago.

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  2. Thank you for your post. I always follow your monthly update. It’s alright to take a break. Your mental and emotional health comes first.

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