Week 9 - 1-7 February
I'm a little behind in the posting. It was my birthday and my sister-in-law's birthday this week and my brother's belated bday celebration and my best friend's bday last week. Talk about crazy! And expensive.
So my budget's taken a beating again, so soon after holidays and Xmas. But I have been keeping up with the expense tracker and I did the figures for my partner and my combined wages. It's going to be wonderful to have the money coming into one bank account to use for living expenses and savings transferred into ING.
I found the lectures very informative but the Retirement section was a little scary to me. I am 41 years old and my superannuation fund at the moment leaves a lot to be desired. Therefore it is imperative for me and my partner to get a mortgage going and then start to add more funds to our super. It's a bit sad we'll be the first generation that don't have a pension and who can say what rules for super will be in place then? Being part of Gen X can be a curse sometimes.
Speaking of generations, there was an article in MX last week 29 Jan that talked about some Gen Y jobseekers having bad attitudes. HR Managing Director, Katherine Graham, says, "The majority come into interviews with a sense of entitlement, a sense that any employer would be privileged to have them". An article in today's Sunday Telegraph about a new book, NurtureShock, is challenging the role of "touchy-feely parenting" and how "over-praising can de-motivate children". I wonder if Gen Y's "bad attitudes" and sense of "privilege" stem from this. Of course, Gen X are just perfect in every way - ha har! (I'll refrain from asking the baby-boomers if they agree with this.) Whatever theory you believe in, I am glad AH is addressing some of these issues in the nicest possible way in his lecture slides from Week 3!
What I found most eye-opening this week was AH's comments about advisers and Australian attitudes toward them. I'm afraid I fell into the camp that didn't appreciate just how much time and effort went into financial planning. My friend, who is financially secure, has been using the same financial adviser for years and he has given her great advice. When I found out she pays him several thousand dollars a year, I baulked! However, working on my own plan, and listening to AH's slides and reading PC's book, I realise that this advice is potentially worth every cent! Once we have some savings behind us and are a year or so into our plan, we are going to seek an adviser to steer us through the financial waters!
All up, I have thoroughly enjoyed doing this course. I wish I had done the full semester instead of Summer School because I was so busy over that period and I would have like to have dedicated more time to studying each module. However, I am confident I will be able to apply the knowledge I have gained (a lot!) to secure myself and my partner a more financial future so we can enjoy a long and happy life.
Thanks, Andrew!
Week 8 - 25-31 January
I found the information about investments just fascinating. As I said in my last blog, I still don't have a handle on everything but it is all becoming so much more clear. There's an article in last year's Money August magazine where top financial planners have been asked for their wealth secrets. Pippa Elliott says to get off the renting treadmill - use a budget (tick!), reduce discretionary spending (tick!) and choose the appropriate savings account (tick). Lisa Faddy says to make your first million you need to invest regularly in shares, managed funds, property and superannuation - surprise, surprise! Sam Henderson suggests ways of stretching your retirement dollar by using a concession card and look into a possible reverse mortgage. Sean McGowan gives tips on recouping your losses by salary sacrificing, gearing, investing in capital growth, yield investments and assessing your risk - and I understood every word!
Managed funds still have me a little scared but I've been looking into several online factsheets. I did find a site that compares funds www.comparefunds.com.au and it has been very good. I am leaning towards BT and I don't know why. Is it because it is a name I am familiar with therefore I'm placing misguided trust into them? I see that Perpetual funds are listed there, too, but I used to work for Permanent Trustees...our natural enemy ha har! All sentiment and jokes aside, there needs to be a lot more research done before I invest any of our money into a fund.
My partner's mum gave me an article ripped from a magazine (no title in the headers) on Dawn Bolton-Smith. It talks about her extraordinary predictions and her impact on the financial world. I was interested in reading about her but I was more interested in the resources list they provided at the end - they listed Your Trading Magazine, Regina Meani's Investor's Guide, websites for market analysis, David Fuller's FullerMoney and the Finonacci online Newsletter. I am mindful of what both PC and AC say about trying to time the market but I'm not necessarily interested in doing that. I am finding it informative to see how people think they can do it. Fascinating stuff!
The funny thing is, I wouldn't have read these articles, not in a million years, prior to doing this course. Now I find myself going to the financial section of a newspaper first, being genuinely interested in financial magazines and online resources and excited about my financial future.
No mean feat, GENC3003!
Sunday, February 7, 2010
Monday, January 25, 2010
Week 7
Week 7 - 18-24 January
I don't know what I did with the last blog...it didn't work! So here it is again - will try to replicate it.
Have been in Melbourne on holidays so have fallen a bit behind. Sadly, though, I did the Quiz while I was down there and didn't realise we had that extra week (a week I should have used studying so I'm a bit mad with myself). My bad!
I bought two BRW magazines for the plane ride and they opened my eyes somewhat. I've never read a business magazine before so it was interesting to see that yes, people pay a lot of attention to the business of making money! I really like the David James articles. He had a dig at ASIC by writing a fake ASIC interview with Tiger Woods - very funny.
There is also an article in Jan14-Feb3 by Chris Richardson about the exporting of Australian education. He quotes Bismarck saying that the most important fact of the 19th century is that the US and UK both spoke the same language. This is especially important because of the growth of internet commerce - mostly conducted in English. Therefore, English speaking countries find themselves with quite a commodity...English education. He says that education services are now Australia's third largest export earner, ranking only behind coal and iron ore. Full-fee paying international student enrolments rose 18 per cent last year. 18 PER CENT! That a huge jump. He lists safety for students (esp Indian students), unscrupulous foreign agents and the GFC as concerns but predicts that education has good growth prospects. He says it's a lack of capacity rather than a lack of demand that may hamper growth and this worries me somewhat. I fully support international students and would love to be one myself through the Universitas 21 program. However, if Australian universities offer more and more international places then surely, somewhere along the line, local students will have to miss out? Working at UNSW for over 15 years I feel that we don't have the capacity to support such a huge growth percentage each year (mind you, I realise the 18 per cent is Australia-wide, not just UNSW). It's an interesting scenario and one I hope the universities approach cautiously.
I took note of the advertised products in both BRW issues and PC and AH are dead right - they're very glossy! They obviously spend a huge amount of money on marketing. I am looking at managed funds so I will try to track down the actual fine print before I make any decisions. I would like to start up a spreadsheet to compare them - or perhaps there is a website like iSelect that may be helpful. I don't remember if AH said anything like that in his lecture slides - I'll have to check.
Anyway, I have a bit of catching up to do with my lecture slides and textbook but I have started my assignment. All in all, this course is doing a lot for me and I'm so glad I enrolled in it. I find myself at dinner parties saying "Did you know.." I hope I'm not too annoying!
I don't know what I did with the last blog...it didn't work! So here it is again - will try to replicate it.
Have been in Melbourne on holidays so have fallen a bit behind. Sadly, though, I did the Quiz while I was down there and didn't realise we had that extra week (a week I should have used studying so I'm a bit mad with myself). My bad!
I bought two BRW magazines for the plane ride and they opened my eyes somewhat. I've never read a business magazine before so it was interesting to see that yes, people pay a lot of attention to the business of making money! I really like the David James articles. He had a dig at ASIC by writing a fake ASIC interview with Tiger Woods - very funny.
There is also an article in Jan14-Feb3 by Chris Richardson about the exporting of Australian education. He quotes Bismarck saying that the most important fact of the 19th century is that the US and UK both spoke the same language. This is especially important because of the growth of internet commerce - mostly conducted in English. Therefore, English speaking countries find themselves with quite a commodity...English education. He says that education services are now Australia's third largest export earner, ranking only behind coal and iron ore. Full-fee paying international student enrolments rose 18 per cent last year. 18 PER CENT! That a huge jump. He lists safety for students (esp Indian students), unscrupulous foreign agents and the GFC as concerns but predicts that education has good growth prospects. He says it's a lack of capacity rather than a lack of demand that may hamper growth and this worries me somewhat. I fully support international students and would love to be one myself through the Universitas 21 program. However, if Australian universities offer more and more international places then surely, somewhere along the line, local students will have to miss out? Working at UNSW for over 15 years I feel that we don't have the capacity to support such a huge growth percentage each year (mind you, I realise the 18 per cent is Australia-wide, not just UNSW). It's an interesting scenario and one I hope the universities approach cautiously.
I took note of the advertised products in both BRW issues and PC and AH are dead right - they're very glossy! They obviously spend a huge amount of money on marketing. I am looking at managed funds so I will try to track down the actual fine print before I make any decisions. I would like to start up a spreadsheet to compare them - or perhaps there is a website like iSelect that may be helpful. I don't remember if AH said anything like that in his lecture slides - I'll have to check.
Anyway, I have a bit of catching up to do with my lecture slides and textbook but I have started my assignment. All in all, this course is doing a lot for me and I'm so glad I enrolled in it. I find myself at dinner parties saying "Did you know.." I hope I'm not too annoying!
Monday, January 18, 2010
Weeks 5-6
Week 6 - 11-17 Jan
Blimey. AH rates owning shares in one company as the highest risk on his 1-10 scale. This just reinforces the need for me to diversify. I will diversify! I don't think at this stage of the game I am ready to invest in debentures or futures and for obvious reasons, an investment property (given I don't have one for myself!). I think rather a managed fund through a company I trust. I have started to research online and am trying to wade through the complicated jargon. I am cross checking with AH's slides and PC's book and it is slowly making more sense to me. There's just so much to take in and I must admit I am finding this section of the course a little intimidating. I don't know how I'll go in the quiz.
Recently, I've been looking up my shares in the paper. I've never done this before and this course is reinforcing to me just how ignorant I've been about my financial situation. Whilst my shares are doing okay (they're now hovering around the 3.25 mark) I'm really seeing the need for me to diversify. It is something that is scary but also exciting. This course is also making me see that I need to do some pretty serious research!
There was an article in the SMH Weekend Business section Jan 9-10 by Annette Sampson about how predicting short-term market movements is a futile exercise. Investment in long term "middle path" investments are the way to go. She outlines the bull market run through the mid-2000s and goes through the performances of cash and fixed interest holdings, shares and stocks and reinforces what PC and AH are saying - think long term rather than trying to time the market. And you may just be able to sleep at night!
Week 5 - 4 Jan-10 Jan
Phew - Christmas over. I really wish I had enrolled in this course during the semester rather than Summer School. I found that the expense tracker comparisons will be skewed by the holiday season. However, I am going to use the expense tracker as inspiration and set up a spreadsheet that I will use all year to try and get my expenses down. Already, it has made a difference because I am seeing all that money that slips literally through my fingers. It couldn't be better timed because we will be living off one wage and we will need to know where every cent goes. Scary.
Have started reading the Investments section and it is a little daunting. I should be looking at it more like it is an exciting challenge. I like PC's racetrack analogy...speaks volumes, doesn't it? And it's one thing that I have not done in my investment portfolio - diversified - and it's for sentimental reason again! About 5 years ago, my Mum bought me shares in a medical company that she thought would do well. I just left them there because I didn't know what else to do with them - and the company seems to be surviving the crisis. I asked her if she kept her shares and she said she didn't have any - she couldn't afford them but she'd bought them for me and my brother. She's such a champion! I feel so grateful that my mother is so grounded and wise with money, as opposed to my father who is like a kid at the fairground.
The 10 tips are interesting and make complete sense. PC and AH both say that you need to understand the investment and to beware of marketing gimmicks. I think AH said it best when he outlined these people know what they're doing - they sink a lot of money into marketing to work out how to take money from you. Wise words.
It's just crazy that a glitzy annual report with the right photography can still sway investors. Are we that stoopid?
Anyway, the main message I am getting so far is to spread the risk by diversifying. This is something I really need to do. When we switch over our money management plan in February, I intend on splitting my wages into a balanced portfolio (when we use my boyfriend's wage to live on). I will invest some into cash management and then invest in a share portfolio. This is what I am thinking right now - obviously as I learn more I may change this!
I Googled Warren Buffett and was interested in a couple of things. Firstly, his website is terrible and this surprised me. But I guess the guy doesn't need to impress anyone in that way. Secondly, I listened to a YouTube interview where he says he pays less tax than his Receptionist because she pays payroll and he pays capital gains tax.
http://www.youtube.com/watch?v=3z_UrOKtjHk
He has offered $1 million to charity if any of the Forbes 400 richest people can prove that on average they pay a higher tax rate than their secretary. The guy is amazing!
Blimey. AH rates owning shares in one company as the highest risk on his 1-10 scale. This just reinforces the need for me to diversify. I will diversify! I don't think at this stage of the game I am ready to invest in debentures or futures and for obvious reasons, an investment property (given I don't have one for myself!). I think rather a managed fund through a company I trust. I have started to research online and am trying to wade through the complicated jargon. I am cross checking with AH's slides and PC's book and it is slowly making more sense to me. There's just so much to take in and I must admit I am finding this section of the course a little intimidating. I don't know how I'll go in the quiz.
Recently, I've been looking up my shares in the paper. I've never done this before and this course is reinforcing to me just how ignorant I've been about my financial situation. Whilst my shares are doing okay (they're now hovering around the 3.25 mark) I'm really seeing the need for me to diversify. It is something that is scary but also exciting. This course is also making me see that I need to do some pretty serious research!
There was an article in the SMH Weekend Business section Jan 9-10 by Annette Sampson about how predicting short-term market movements is a futile exercise. Investment in long term "middle path" investments are the way to go. She outlines the bull market run through the mid-2000s and goes through the performances of cash and fixed interest holdings, shares and stocks and reinforces what PC and AH are saying - think long term rather than trying to time the market. And you may just be able to sleep at night!
Week 5 - 4 Jan-10 Jan
Phew - Christmas over. I really wish I had enrolled in this course during the semester rather than Summer School. I found that the expense tracker comparisons will be skewed by the holiday season. However, I am going to use the expense tracker as inspiration and set up a spreadsheet that I will use all year to try and get my expenses down. Already, it has made a difference because I am seeing all that money that slips literally through my fingers. It couldn't be better timed because we will be living off one wage and we will need to know where every cent goes. Scary.
Have started reading the Investments section and it is a little daunting. I should be looking at it more like it is an exciting challenge. I like PC's racetrack analogy...speaks volumes, doesn't it? And it's one thing that I have not done in my investment portfolio - diversified - and it's for sentimental reason again! About 5 years ago, my Mum bought me shares in a medical company that she thought would do well. I just left them there because I didn't know what else to do with them - and the company seems to be surviving the crisis. I asked her if she kept her shares and she said she didn't have any - she couldn't afford them but she'd bought them for me and my brother. She's such a champion! I feel so grateful that my mother is so grounded and wise with money, as opposed to my father who is like a kid at the fairground.
The 10 tips are interesting and make complete sense. PC and AH both say that you need to understand the investment and to beware of marketing gimmicks. I think AH said it best when he outlined these people know what they're doing - they sink a lot of money into marketing to work out how to take money from you. Wise words.
It's just crazy that a glitzy annual report with the right photography can still sway investors. Are we that stoopid?
Anyway, the main message I am getting so far is to spread the risk by diversifying. This is something I really need to do. When we switch over our money management plan in February, I intend on splitting my wages into a balanced portfolio (when we use my boyfriend's wage to live on). I will invest some into cash management and then invest in a share portfolio. This is what I am thinking right now - obviously as I learn more I may change this!
I Googled Warren Buffett and was interested in a couple of things. Firstly, his website is terrible and this surprised me. But I guess the guy doesn't need to impress anyone in that way. Secondly, I listened to a YouTube interview where he says he pays less tax than his Receptionist because she pays payroll and he pays capital gains tax.
http://www.youtube.com/watch?v=3z_UrOKtjHk
He has offered $1 million to charity if any of the Forbes 400 richest people can prove that on average they pay a higher tax rate than their secretary. The guy is amazing!
Wednesday, December 30, 2009
Weeks 1-4
Week 4 - 14 Dec - 20 Dec
Super. I am one of the unfortunate Gen Xers who didn’t have super when I first started work at 15 and will be the primary funders of the Baby Boomer’s pensions. That’s a bit whingey, isn’t it? Don’t mean to be - it’s up to me to assess the mess I’m in and take steps to improve it. I’ve really been inspired by this course and it’s made me look at all those envelopes with the clear windows I’ve been collecting. So, I sat down and went through everything and have discovered I really don’t have much super at all. I have about $60,000 in my UniSuper (took quite a beating this year) and another $20,000 AMP super policy which, for the life of me, I have no idea where it came from. I asked my accountant how I should go about finding out and he said, “You gotta ring them and ask them!”. Feel like such a dunce that I don’t know….but will ring them when I get a minute and find out. Think I will ring them in the new year and kill two birds with one stone: Whole of Life and Super Fund.
One of my friends is 46 and co-owns a property in Arncliffe, an investment property in Orange and is thinking of a third investment property (unit) in the St George area. Her financial adviser said she should be paying as much as she can into her super at this point in her life. I wish I was in the same boat because after hearing the lectures and reading PC’s book, I realise I need to get some big time money into my fund. The tax breaks are just too good but at this point, it’s imperative I get my deposit together first. I know that owning vs renting have pros and cons but I just can’t go on renting anymore. It’s too depressing.
Interesting article by Nicole Pedersen-McKinnon in the Sun-Herald (Nov 22) where she talks about hidden fees for super, managed funds, insurance policies and loans. Goes with what AH was saying, especially with funds like UniSuper which I am in. Unfortunately, I have thrown out the pamphlets they’ve been sending me, even though I was hoping there was something in the pile of unopened letters I had. I have a Defined Benefit Division fund and it says on my statement to see the Product Disclosure Statement for more fee details. Ah-ha! I did have a brochure tucked away in my filing cabinet and they go through a new fee structure from 1 July, 2009. It says they will be increasing fees to help cover the growing costs associated with delivery their products and services. It’s all very carefully worded and it says there will be a flat fee for administration, a user pays approach to services and a percentage based investment fee. What these fees will actually be are unclear. I (shamefully) now can’t find my statement - it's lost amongst the Christmas presents, wrapping, gwar... that will be a job for me in the new year. Get a copy of my statement and ask what the fees will be exactly.
Found the taxation section interesting. Could actually figure out how to calculate tax after listening to AH’s lectures but I can’t figure out how to factor in increments (we have three this year alone). I am going to email Salaries and if they can’t help me, perhaps I can ask AH via the Discussion Board.
Didn't take the extension for Online Quiz 2 so did it today. I see I got 8/10 for the first one - I can see where I went wrong.
Happy Christmas everyone!
Week 3 - 7 Dec - 13 Dec
Am going over all the notes and chapters to make sure I am ready for the quiz. Am quite glad because I am doing another Summer course so the pressure’s off slightly!
I can’t believe I haven’t had contents insurance the whole time I have rented. That’s just reckless! After hearing AH’s lecture and reading PC’s Insurance chapter, I started to list everything in the unit and realised just how much it would cost to replace everything. I have my boyfriend on board and we’re going to start photographing everything and logging it into a spreadsheet so we can work out what cover to get.
I also looked online at our NIB health cover and realised it’s not exactly fitting for our age group. It’s the old Bodycover so we really need to think about getting different cover now we’re in our 40s. I checked what the benefits would be to combine our cover and I can’t see any except that paying separately we save 1¢ per week. Yep, that’s a whole 52¢ savings per year. More investigation necessary.
I was quite dismayed to hear about AH’s theories on Whole of Life insurance but also very relieved - because PC doesn’t really come right out and say how crap they are and he should! My mum took one out for me in 1977 and she didn’t let me know about it until I was in my early 30s but by then she’d let the repayments slip so I was about $2,000 behind. I rang AMP and spoke to three different agents and whilst they were very nice, I couldn’t (and still can’t) figure out what the benefits are of having it. I think I just have an emotional attachment to it because I grew up in a low income household in Mt Druitt and my mother worked so very hard to save money to get us out of there and buy land in Menai, whilst my father drank, smoked and gambled. So to know she was putting aside a little money every week to pay into this insurance for me just makes me want to weep. I have been trying to catch up with the backlog of repayments but I’m so glad I’m doing this course and am learning that sometimes these things just aren’t viable. I was upset but happy to hear AH’s views on them because it has given me the incentive to get rid of it. I spoke to Mum about it and she is fine - I will only get about $850 back after all those years of payments. Sad, isn’t it? But I think I will buy my Mum a piece of antique jewellery with the money because she deserves it. A bit of a happy ending.
Did Online Quiz 1 - hope I did okay.
Week 2 - 30 Nov - 6 Dec
Owning a home. Mmmmmm. I moved out of home at 16 and have rented ever since. It makes me quite sick to think of how many other people’s mortgages I have paid off over the years but I must not dwell on this. I need to start preparing to buy my own home. At 40, I am conscious this is going to be tough - I have left it rather late but I intend on saving 10-20% deposit and buying a small unit with my boyfriend within our means. You need to start somewhere! My boyfriend’s parents are pushing him to buy a unit and they will chip in for him (not us) which is a little uncomfortable but I understand they want to protect their money in case we break up. They gave my boyfriend an old issue of Money magazine (Nov 2008) and there are interesting articles about real estate. One article suggests looking for a property on a commute line for work and also to look in areas that are still partly industrial but undergoing a transformation. I have actually been thinking about the Rosebery or Alexandria area and have looked on Domain.com and a couple of the real estate sites. My boyfriend and I are going to drive around the area to familiarise ourselves with it and keep an eye out for any properties on sale both on the web and on the street. What we need to do is get together a deposit. I have some savings but have been paying for my degree and several overseas holidays so when we combine finances, I will be able to reach at least 10% deposit within a year. I have looked at some online calculators and whilst they’re quite scary (in terms of what I need) they’re going to be very handy!
Have been reading the Ask Mark column in the Sunday Telegraph. I like Mark Bouris on The Apprentice so I find this column interesting. A person who is 28 asked if he should sell the unit he bought in Hurstville in 2007 for $222,000 with a half fixed, half variable loan of $215,000. He is starting up a business and asked if he should sell his property at a profit of $120,000 and invest in a high risk portfolio and invest $20,000 into a new business or should he keep the unit and use the equity down the line to buy another property. My initial thought was, “Sell!” but after thinking about what I’ve already learnt in this course, I thought, “No, don’t sell. Use the equity even though you will be up for capital gains because you need security for a loan if you want to start up a business”. And guess what? That’s exactly what Mark said! I’m feeling happy about all this learning!
Got the extension for Online Quiz 1. Will do next week.
Week 1 - 23-29 Nov
Read Paul Clitheroe’s (PC), book chapters 1-4 and read Andrew Hingston (AH) slidecasts units 1-2.
Realise as a 40 year old full time worker (part time student) I am really behind the eight ball. I haven’t got a lot of savings but I don’t have much debt and I have travelled extensively so I am not feeling too bad. Just not that great!
Firstly, I was pleasantly surprised by AH’s pie metaphor. It’s great to emphasise the importance of being generous. It’s a philosophy I didn’t really embrace until my mid 20s so I’m glad this course is not only imparting sensible financial advice but also the philosophy of generosity to others including paying your taxes. Just read an article on the Project Wickenby tax crackdown in the SMH Weekend Business 14-15 Nov. Two carpenters (Anthony Hill and Glyn Jones) have been sentenced to seven months prison and will pay $2 million dollars in compensation and penalties for evading a tax bill of $800,000 between them. Talk about a false economy - they used schemes promoted by accountant Robert Agius and admitted they siphoned money through New Zealand because they were greedy. If only they followed the pie metaphor!
PC’s 10 Steps to Financial Security also gave me food for thought. I have been wasting a lot of money and it’s time to organise my finances. My partner and I have been together nearly 6 years and he earns more than me so it’s been difficult to save when we travel and socialise a lot. However, after mucccccccch discussion, we have decided to combine our wages and save mine, spend his. We won’t be starting this until February, so I will include those figures in my projected budget. Until then, I aim to save 10% of my wage and reduce my frivolous spending eg I regularly have all my nieces and nephews and their friends over and I take them to the beach. I usually buy ice-creams all round at a cost of $25 but this week I bought 2 packets of Just Juice tetra packs on special and froze them: cost - $4.20….and they loved them. Now I just need to get this money out of my wallet so I don’t spend it elsewhere!
I thought the DELIs were interesting. I fit into category no.4 Creative Production - interested in the multimedia and artistic aspect of my job (websites, print media). I pretty much dislike my job though, so I am aiming to finish my degree in June and move to a job that I can love. Ideally, I would like to do craft stalls at concerts etc but I suspect the viability of this pursuit would be dubious! In the meantime, I will practise the STAR question types and interview scenarios with my friend, Miriam, who is an ex-HR person. She is willing to help me dust off my skills and get my CV in order.
Am studying for the online quiz. A bit of trepidation….
Super. I am one of the unfortunate Gen Xers who didn’t have super when I first started work at 15 and will be the primary funders of the Baby Boomer’s pensions. That’s a bit whingey, isn’t it? Don’t mean to be - it’s up to me to assess the mess I’m in and take steps to improve it. I’ve really been inspired by this course and it’s made me look at all those envelopes with the clear windows I’ve been collecting. So, I sat down and went through everything and have discovered I really don’t have much super at all. I have about $60,000 in my UniSuper (took quite a beating this year) and another $20,000 AMP super policy which, for the life of me, I have no idea where it came from. I asked my accountant how I should go about finding out and he said, “You gotta ring them and ask them!”. Feel like such a dunce that I don’t know….but will ring them when I get a minute and find out. Think I will ring them in the new year and kill two birds with one stone: Whole of Life and Super Fund.
One of my friends is 46 and co-owns a property in Arncliffe, an investment property in Orange and is thinking of a third investment property (unit) in the St George area. Her financial adviser said she should be paying as much as she can into her super at this point in her life. I wish I was in the same boat because after hearing the lectures and reading PC’s book, I realise I need to get some big time money into my fund. The tax breaks are just too good but at this point, it’s imperative I get my deposit together first. I know that owning vs renting have pros and cons but I just can’t go on renting anymore. It’s too depressing.
Interesting article by Nicole Pedersen-McKinnon in the Sun-Herald (Nov 22) where she talks about hidden fees for super, managed funds, insurance policies and loans. Goes with what AH was saying, especially with funds like UniSuper which I am in. Unfortunately, I have thrown out the pamphlets they’ve been sending me, even though I was hoping there was something in the pile of unopened letters I had. I have a Defined Benefit Division fund and it says on my statement to see the Product Disclosure Statement for more fee details. Ah-ha! I did have a brochure tucked away in my filing cabinet and they go through a new fee structure from 1 July, 2009. It says they will be increasing fees to help cover the growing costs associated with delivery their products and services. It’s all very carefully worded and it says there will be a flat fee for administration, a user pays approach to services and a percentage based investment fee. What these fees will actually be are unclear. I (shamefully) now can’t find my statement - it's lost amongst the Christmas presents, wrapping, gwar... that will be a job for me in the new year. Get a copy of my statement and ask what the fees will be exactly.
Found the taxation section interesting. Could actually figure out how to calculate tax after listening to AH’s lectures but I can’t figure out how to factor in increments (we have three this year alone). I am going to email Salaries and if they can’t help me, perhaps I can ask AH via the Discussion Board.
Didn't take the extension for Online Quiz 2 so did it today. I see I got 8/10 for the first one - I can see where I went wrong.
Happy Christmas everyone!
Week 3 - 7 Dec - 13 Dec
Am going over all the notes and chapters to make sure I am ready for the quiz. Am quite glad because I am doing another Summer course so the pressure’s off slightly!
I can’t believe I haven’t had contents insurance the whole time I have rented. That’s just reckless! After hearing AH’s lecture and reading PC’s Insurance chapter, I started to list everything in the unit and realised just how much it would cost to replace everything. I have my boyfriend on board and we’re going to start photographing everything and logging it into a spreadsheet so we can work out what cover to get.
I also looked online at our NIB health cover and realised it’s not exactly fitting for our age group. It’s the old Bodycover so we really need to think about getting different cover now we’re in our 40s. I checked what the benefits would be to combine our cover and I can’t see any except that paying separately we save 1¢ per week. Yep, that’s a whole 52¢ savings per year. More investigation necessary.
I was quite dismayed to hear about AH’s theories on Whole of Life insurance but also very relieved - because PC doesn’t really come right out and say how crap they are and he should! My mum took one out for me in 1977 and she didn’t let me know about it until I was in my early 30s but by then she’d let the repayments slip so I was about $2,000 behind. I rang AMP and spoke to three different agents and whilst they were very nice, I couldn’t (and still can’t) figure out what the benefits are of having it. I think I just have an emotional attachment to it because I grew up in a low income household in Mt Druitt and my mother worked so very hard to save money to get us out of there and buy land in Menai, whilst my father drank, smoked and gambled. So to know she was putting aside a little money every week to pay into this insurance for me just makes me want to weep. I have been trying to catch up with the backlog of repayments but I’m so glad I’m doing this course and am learning that sometimes these things just aren’t viable. I was upset but happy to hear AH’s views on them because it has given me the incentive to get rid of it. I spoke to Mum about it and she is fine - I will only get about $850 back after all those years of payments. Sad, isn’t it? But I think I will buy my Mum a piece of antique jewellery with the money because she deserves it. A bit of a happy ending.
Did Online Quiz 1 - hope I did okay.
Week 2 - 30 Nov - 6 Dec
Owning a home. Mmmmmm. I moved out of home at 16 and have rented ever since. It makes me quite sick to think of how many other people’s mortgages I have paid off over the years but I must not dwell on this. I need to start preparing to buy my own home. At 40, I am conscious this is going to be tough - I have left it rather late but I intend on saving 10-20% deposit and buying a small unit with my boyfriend within our means. You need to start somewhere! My boyfriend’s parents are pushing him to buy a unit and they will chip in for him (not us) which is a little uncomfortable but I understand they want to protect their money in case we break up. They gave my boyfriend an old issue of Money magazine (Nov 2008) and there are interesting articles about real estate. One article suggests looking for a property on a commute line for work and also to look in areas that are still partly industrial but undergoing a transformation. I have actually been thinking about the Rosebery or Alexandria area and have looked on Domain.com and a couple of the real estate sites. My boyfriend and I are going to drive around the area to familiarise ourselves with it and keep an eye out for any properties on sale both on the web and on the street. What we need to do is get together a deposit. I have some savings but have been paying for my degree and several overseas holidays so when we combine finances, I will be able to reach at least 10% deposit within a year. I have looked at some online calculators and whilst they’re quite scary (in terms of what I need) they’re going to be very handy!
Have been reading the Ask Mark column in the Sunday Telegraph. I like Mark Bouris on The Apprentice so I find this column interesting. A person who is 28 asked if he should sell the unit he bought in Hurstville in 2007 for $222,000 with a half fixed, half variable loan of $215,000. He is starting up a business and asked if he should sell his property at a profit of $120,000 and invest in a high risk portfolio and invest $20,000 into a new business or should he keep the unit and use the equity down the line to buy another property. My initial thought was, “Sell!” but after thinking about what I’ve already learnt in this course, I thought, “No, don’t sell. Use the equity even though you will be up for capital gains because you need security for a loan if you want to start up a business”. And guess what? That’s exactly what Mark said! I’m feeling happy about all this learning!
Got the extension for Online Quiz 1. Will do next week.
Week 1 - 23-29 Nov
Read Paul Clitheroe’s (PC), book chapters 1-4 and read Andrew Hingston (AH) slidecasts units 1-2.
Realise as a 40 year old full time worker (part time student) I am really behind the eight ball. I haven’t got a lot of savings but I don’t have much debt and I have travelled extensively so I am not feeling too bad. Just not that great!
Firstly, I was pleasantly surprised by AH’s pie metaphor. It’s great to emphasise the importance of being generous. It’s a philosophy I didn’t really embrace until my mid 20s so I’m glad this course is not only imparting sensible financial advice but also the philosophy of generosity to others including paying your taxes. Just read an article on the Project Wickenby tax crackdown in the SMH Weekend Business 14-15 Nov. Two carpenters (Anthony Hill and Glyn Jones) have been sentenced to seven months prison and will pay $2 million dollars in compensation and penalties for evading a tax bill of $800,000 between them. Talk about a false economy - they used schemes promoted by accountant Robert Agius and admitted they siphoned money through New Zealand because they were greedy. If only they followed the pie metaphor!
PC’s 10 Steps to Financial Security also gave me food for thought. I have been wasting a lot of money and it’s time to organise my finances. My partner and I have been together nearly 6 years and he earns more than me so it’s been difficult to save when we travel and socialise a lot. However, after mucccccccch discussion, we have decided to combine our wages and save mine, spend his. We won’t be starting this until February, so I will include those figures in my projected budget. Until then, I aim to save 10% of my wage and reduce my frivolous spending eg I regularly have all my nieces and nephews and their friends over and I take them to the beach. I usually buy ice-creams all round at a cost of $25 but this week I bought 2 packets of Just Juice tetra packs on special and froze them: cost - $4.20….and they loved them. Now I just need to get this money out of my wallet so I don’t spend it elsewhere!
I thought the DELIs were interesting. I fit into category no.4 Creative Production - interested in the multimedia and artistic aspect of my job (websites, print media). I pretty much dislike my job though, so I am aiming to finish my degree in June and move to a job that I can love. Ideally, I would like to do craft stalls at concerts etc but I suspect the viability of this pursuit would be dubious! In the meantime, I will practise the STAR question types and interview scenarios with my friend, Miriam, who is an ex-HR person. She is willing to help me dust off my skills and get my CV in order.
Am studying for the online quiz. A bit of trepidation….
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