Cheating my way to 110k

A new milestone! It was back in May that my portfolio clocked it’s first 6 figure rating and on Wednesday 18^th was the first time it reached 110k, or 111 094 euros to be exact. I also record my net worth although I don't find it such a valuable metric as it's not "edible", but it's hovering somewhere around 133 000 euros at the moment.

Although I have a bit of a confession to make. I cheated a bit! But only myself, I moved a couple of grands from my usage money to my portfolio and may have to move it back at some point. So, the figure is perhaps a little bit inflated.

Between first 100k and first 110k was exactly 167 days, so my portfolio gained a really nice 60 euros per day. Savings since 100k were 6 381 euros and gains were 3 742 euros within that period. With time the proportion of portfolio gains should dominate savings but such a trend is not emerging yet.

On Wednesday my portfolio looked like this:

	6.1.2017	10.5.2017	18.10.2017	change
Savings account	7575	7596	2000	-5596
Passive funds, broad	30172	33599	35844	+2245
Passive funds, niches	9734	11330	12902	+1572
Actively managed funds	6603	7499	8279	+780
Listed stocks	24930	32872	43036	+10164
Unlisted stocks	5250	5250	4500	-750
Fixed income	100	100	100	0
Cash	6012	4093	4434	+341
Total	90376	102337	111094	+8757

Year-to-date my portfolio is up about 7% so the year has been okay but not great. The lowering dollar valuation has hurt my portfolio to some extent as I hold plenty of US equities. I also have to note that I am a bit worried with the bull market just continuing and continuing on, Dow and S&P making not all-time-highs and VIX making all-time-lows. Just doesn’t add up!

I think my individual stock picks are getting a bit out of hand. I’ll need to try and limit my purchases to indexes for now. I also notice I’m checking my accounts rather often which isn’t a good sign. I’m thinking about adding trailing stops to my positions but at least Nordnet doesn’t support that.

Finns are rather poor

Finland versus the world - Meh

According to OECD (1), Finnish households have pretty much the lowest mean net wealth within the OECD. The diagram below shows that only Slovak Republic households are more poor, than the Finnish.

The average (mean) household in Finland only has a net wealth (net worth) of around 130k euros and a median household net worth around 80k. (I estimated the number from the diagram below so the numbers are not totally accurate.

The OECD average household net worth is about 220k. Other European nations like the UK, Spain or Belgium have more than double mean and median net worth. A certain precidental candidate would probably call this situation ”Sad.” and for once he'd be right!

Mean and median net wealth per household in selected OECD countries, 2010 or latest available year, values in 2005 USD PPPs.

Finland versus Finland - you need to sit down!

If we then look at the Finnish net worth data (2) in more detail we make stunning conclusions. I really hope you're sitting down for these two!

The first of the two tables below shows the net worth of Finnish households by different fractions and age brackets within the population.

Household reference person age	Number of households (thousands)	P10	P25 (lower quartile)	P50 (median)	P75 (upper quartile)	P90	P95	P99 (aka ”the 1%”)	Average
All households	2622,5	50	10 000	110 000	252 116	458 673	655 092	1 350 122	195 332
Under 25	163,7	-5 338	-547	1 791	12 000	40 246	117 938	386 698	19 684
25-34	409,1	-11 165	0	15 759	75 976	177 600	277 457	1 092 402	70 691
35-44	389,4	80	17 944	109 315	238 516	422 910	592 303	1 301 458	192 767
45-54	466,3	760	34 196	152 292	305 707	535 405	766 782	1 403 161	231 805
55-64	483,9	1 000	52 976	167 693	335 601	572 704	813 221	1 733 005	264 078
65-74	374,2	3 250	79 011	186 663	334 460	568 994	773 406	1 725 706	276 495
Over 75	335,9	2 008	62 812	150 312	251 163	391 425	603 473	1 109 891	195 622

The fractions mean a euro limit that is the highest value within that group, e.g., P25 means 25% of households are below that number and P90 means 10% of households are above that number. People don't accumulate more net worth during their years of employment. They just don't save. This looks kind of bad but still somehow manageable..

But there's a caveat: most of people's net worth is in their homes and appartments. The next table tells a much more dire story. This table lists the households' financial assets including stocks, bonds and mutual funds.

Household reference person age	Number of households (thousands)	P10	P25 (lower quartile)	P50 (median)	P75 (upper quartile)	P90	P95	P99 (aka ”the 1%”)	Average
All households	2622,5	350	2 000	9 098	32 099	94 698	170 935	625 334	50 373
Under 25	163,7	60	500	1 570	7 189	18 000	30 000	85 232	8 316
25-34	409,1	300	1 100	5 000	16 039	40 610	71 190	236 922	22 658
35-44	389,4	350	2 006	10 000	29 052	73 682	133 938	585 480	51 514
45-54	466,3	500	2 685	11 000	36 186	106 920	180 338	800 790	52 973
55-64	483,9	306	2 500	13 850	57 500	145 978	252 222	851 823	72 253
65-74	374,2	500	2 988	13 897	50 000	133 334	219 003	877 849	73 308
Over 75	335,9	700	2 512	10 000	32 000	92 190	166 944	461 209	42 624

What the?! The medians for all relevant age groups are only around 10k euros. I find these numbers to be really low; even people who are able to save some money are not really investing that money to make more money. People should let the magic of compounding work for their benefit.

So where do I fit in? Your's truly is upper quartile based on net worth and even top 5% based on financial assets as most of my assets are in my portfolio. There's a lot of work left to move more to the right.

References

(1) – OECDStatistics brief, June 2015 - No. 21, Household wealth inequalityacross OECD countries: new OECD evidence, by Fabrice Murtin and MarcoMira d’Ercole

(2) – Tilastokeskus: Liitetaulukko1. Nettovarallisuuden fraktiilit vuonna 2013, Liitetaulukko 3.Rahoitusvarallisuuden fraktiilit vuonna 2013, julkaistu 1.4.2015