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….