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!
Monday, January 25, 2010
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!
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