Sunday, 16 November 2014

Going on a cruise

We haven't been on a holiday for quite a while (I currently have about 40 days of 'long service leave' accumulated plus another 40 days of accumulated 'annual leave'), so early last week we decided to book a 'cheap' 14-day round-trip cruise to New Zealand during the January school holidays. The initial idea was to book a cheap 'quad share' interior room that would have cost a total of around $6,000, but it turned out that there were not any 'quad share' interior rooms available, and only one interior twin-share room. So we then tried to book one interior twin share room and one slightly more expensive 'ocean view' twin share room close by. However, during the booking stage it turned out that the 'quota' for 12-17 year old children on the cruise was full, so we couldn't book DS1 on. At that stage it was looking like we'd have to defer the trip, as the other available cruises to New Zealand were either one-way (and DW didn't want to have to fly back to Sydney), more expensive (over the Christmas/New Year period), or were travelling during Dec or Feb and would have meant that the boys would miss out on some of the school term.

Luckily DW decided to double-check on the same cruise again the next day, and either the quota had been increased or someone had cancelled, as we were then able to book everyone onto the January cruise we'd initially wanted. There were no longer any interior rooms available, so we ended up booking two adjacent 'ocean view' twin-share rooms for a slightly higher total cost of about $7,500. I'm guessing that the total vacation cost will end up somewhere over $10,000 for the two week trip! Aside from the cruise itself (basically transportation to New Zealand from Sydney, overnight accommodation between ports, main meals, and on-board entertainment), I've already paid another $136 for travel insurance, and we will be applying for new passports for DS1 and DS2 this week as their passports expired in 2013. Each 5-year children's passport will cost $122 (which is half the cost of a 10-year adult passport). Finally there will be extra costs for the various sight-seeing 'excursions' available at each port of call -  I'm estimating at least $100 per excursion per person for the ten days or so we are visiting various ports in New Zealand.

I'll post a break-down of the final costs (and some photos) when we get back.

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Tuesday, 4 November 2014

Net worth: October 2014

The stock market rebounded, so pretty much the opposite happened compared with last month -- my superannuation account balance was up, my geared stock portfolio was up, and, uncorrelated but still welcome, the valuation for our house was up (along with the rest of Sydney real estate it seems). So, overall, my net worth was up by a fairly massive $57,607 (3.70%) during October.

Next month is likely to be much less impressive, even if the stock market continues to do well, as there aren't any more monthly employer superannuation contributions due until next January, and I will be paying the $32,000 tax bill due on the 21st. So I'll be pleasantly surprised if my NW manages to break through $1.65M by the end of 2014, and if things go really well I might become a 'multi-millionaire' (with the bare minimum $2M) sometime during 2017. Just goes to show how little a million dollars really is worth these days.

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Sunday, 2 November 2014

Tax Sux

Having sold our investment rental property at the start of last financial year, my recent tax return ended up having a massive taxable income of over $190,000. Not only did that mean a large capital gains tax amount, but it also meant not getting any rebate for our net medical expenses this year (despite having net 'out of pocket' medical expenses of over $8,000), as DW also had a considerable 'taxable income' from her half of the capital gain from selling the investment property. The large taxable income also meant having to pay both the medicare levy and also a medicare levy surcharge (as we don't have private health insurance). All up, instead of the normal situation of getting a sizable tax refund of some of my PAYG tax (due to deductions for investment loan interest payments), this year I have an estimated tax bill of $32,370 that will be due in about three weeks. As she only works part-time, DW's tax bill will be slightly lower - just under $30,000.

Although we had used most of the net proceeds from selling our investment property to reduce our home loan, we each have around $100,000 invested in cash accounts and some share investments (so we would have funds available at short notice to pay our CGT bill). I liquidated the relevant share portfolio last week in order to have the cash ready to pay my tax bill (the $96,000 share portfolio I bought last year had lost around $6,000 - so I would have been better investing in an index fund, or else just investing in a term deposit), and once the official notice of assessment arrives in the next week or two I'll pay the amount owing and see how much cash DW and  I then have. The plan is for DW and me to each kick in equal amounts and pay off as much as possible of the remaining home loan balance (as the interest is not tax deductible). However, we don't plan to pay off the home loan entirely, as we still have an investment 'portfolio loan' account secured against our house equity.

Going forward, the reduced mortgage payments (once most of our remaining home loan has been paid off) will provide some additional cash flow, which I'll use to slowly pay down my margin loan balances as I get closer to retirement age. The big question mark hanging over my financial planning is whether I will remain in full-time employment until my expected retirement in about 15 years time...

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Tuesday, 21 October 2014

Judo and 5BX update

Well, I survived my first Saturday afternoon Judo lesson, but for a while I thought I might not even last through the 'warm-up' session! If I hadn't been doing my daily '5BX' exercise program and a long walk every day for the previous three or more weeks I never would have got through the entire lesson without collapsing. The first lesson was a good refresher of 'Ukemi' (break-falls), and an introduction to the throw 'O goshi' (major/large/full hip throw).

I was feeling pretty exhausted after the first lesson and had a sore shoulder and hands (the cost of being thrown while still having a BMI around 32!) the first afternoon. The next day I was feeling sore around the neck (probably for tensing up when getting thrown), and by the third day was feeling sore around the diaphragm (poor core body strength). Fortunately by day four I was pretty much back to normal - and was fully recovered in time for my second lesson.

The second lesson started off with an even more exhausting 'warm-up', as we were training in pairs, and I was having trouble keeping up with the thirty-something woman I was training with. I'd also managed to catch the cold that had kept DS2 home from school the day before, so I ended up coughing throughout most of the lesson. The second lesson reviewed O goshi and then introduced 'O soto gari' (major outer reap) throw and the pin 'Kesa gatame' (Scarf hold). I was favouring my right shoulder (which had been sore the week before), so of course I ended up with a sore left shoulder this week! I also had a sore inner thigh (O soto gari probably used muscles that I don't normally use very much). I ended up going to bed early due to my cough (and feeling exhausted) and was feeling pretty sore on Sunday. Fortunately I was already feeling pretty normal again today, so my 'recovery time' already seems to be improving.

Barring any injuries it is looking more likely that by the end of the ten week 'adult beginner' course I should be fit enough to handle to standard adult judo classes. I'll probably forget about attending the second weekly sessions (on Thursday nights) until I get my weight down to where it should be (about 22 kg less than it currently is).

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Saturday, 4 October 2014

Getting fit (or at least a bit fitter) on the cheap

With my 'adult beginner' Judo classes starting next weekend (I found my old 6th Kyu and 5th Kyu grading certificates from 40 years ago, but I'll be starting from scratch obviously) I needed to improve my fitness. So having recently cancelled my Crunch Fitness gym membership (I wasn't going often enough to make it worth keeping) I've taken to doing an hour or so brisk walking every day (at lunchtimes and in the evening), logging my 'step count' using my mobile phone (I'm finally reaching the recommended target of at least 10,000 steps per day). I'm also doing '5BX' exercises every day, which despite it ridiculously easy exercises at the beginning, is starting to gradually improve my fitness level (as measured by the weekly 'step test' I do). Combined with a modest rate of weight loss (using a combination of attempting to cut out all 'junk food' and 'lollies', eating a CRAN-style core diet plan most days, the odd low-calorie 'fasting' day thrown in along the lines of the "5:2 diet", and an increased level of physical activity, I'm managing to shed about 0.75 kg each week) I should be in reasonable shape to commence Judo lessons if I take it fairly easy to begin with.... we'll see how it goes. There's a grading at the end of the 10-week beginner's course (so hopefully I'll get my "yellow belt" back again), and at this stage I'm planning to continue with Judo one or two times a week during 2015, with the goal of achieving my "orange belt". I'm not sure that aspiring to any higher grades would be realistic at my age and level of health/fitness...

ps. DS1 managed to break his arm falling down while ice-skating for the first time during this school holiday period, so with his arm in a plaster cast for the next 4-6 weeks it looks like he'll miss his yet another Judo grading, and won't be attending the older kids class that runs concurrently with the 'adult beginner' classes - at least for a while.

For anyone interested in starting a free, equipment-less, easy-to-do, and quite effective exercise regime that literally only takes 11 minutes each day, you can download the original '5bx' pamphlet from various places such as:

And you might find this old training presentation of interest. It's both amusingly quaint, and provides some useful examples of how to do the advanced versions of some of the exercises properly:

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Net Worth: September 2014

The stock market was down last month. Such is life. Hence our SMSF balance was down, and my geared stock portfolio was down by a larger percentage. Sydney house prices (at least in our suburb) were unchanged. In the long run being heavily invested in the stock market should be a "good thing", but then again, as Keynes quipped "in the long run we're all dead". Maybe October will be a good month for the market...

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Thursday, 11 September 2014

Learning Judo after a forty-year break

The Judo club that my sons attend on Saturday afternoon is planning to run another 'adult beginner' course (lasting 10 weeks) next term (starting about four weeks from now), so I've decided to attend the lessons and see how it goes. I did Judo for a year or two when I was in High School, and as I have to spend a couple of hours watching the kids at Judo most weekends anyway, I thought that I may as well join in (the adult course is being run concurrently with the older kids class). I still have a Judogi from when I made an aborted attempt to resume Judo training in my late 30s (the class was full of twenty-something 'alpha males' and a bit too 'gung ho' for my liking), so the only cost will be $120 mat fees for the 10-week course, plus $120 to join the NSW JFA for a year.

The standard adult class seems reasonably accomodating of older players (there are several black and brown belts that are around my age or even older), so hopefully I can survive the adult beginner class if I don't 'over do' it. If nothing else, the decision to resume Judo training has given my diet and exercise regime a new focus, with a very short time frame in which to shed as much excess weight as possible and do daily aerobic exercise (5BX) and attend the gym until my current membership expires on 10 October.

If I enjoy (and survive) the beginner course I plan to keep attending lessons once or twice a week, and aim to eventually get a yellow and perhaps an orange belt, but I doubt that I'll be able to progress beyond that level even if I keep training indefinitely, as progressing to the higher Kyo grades require attaing some competition points and even the 'masters' competitions (for over-30s) are likely to put me in hospital!

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Tuesday, 2 September 2014

Net Worth: August 2014

The past month saw little change in the value of my stock portfolio or SMSF, as the markets dropped mid-month and had only just recovered to the previous month's close by the end of August. On the other hand, Sydney property prices have continued increasing, so my overall net worth got a boost from two month's worth of increase in the valuation of our home (as the monthly sales data were not available when I did last month's net worth calculations). Overall my net worth increased by $18,426 - which seems impressive until you realize that simply keeping pace with inflation (around 3% pa) would require a monthly rise of over $4,000.

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Monday, 1 September 2014

Cancelled my gym membership (again)

I had joined the local Crunch Fitness gym with high hopes of regularly attending and getting my money's worth for the modest $15 per fortnight fee. Unfortunately I only managed to get to the gym once every couple of months or so for a couple of reasons:
* the location isn't on my normal route home from work, so it meant an extra half-hour detour on the way home if I wanted to go to the gym after work,
* I couldn't attend three days a week in any case, due to having to collect DS2 from after-school care immediately after work and then prepare the kids dinner on those days that DW works (and usually has to work back), and
* there wasn't any car parking at the gym, which meant parking at a nearby shopping center car park and walking ten minutes to get to the gym - not really an issue, but not much fun during the recent heavy rain storms we've been getting in Sydney.

In any event, I've increased my fitness walking to a brisk 30 minutes every lunchtime at work, and also a couple of extra 30 minutes walks around our local streets after dinner several times a week. While hardly an aerobic work-out compared to spending 40 minutes circuit training at the gym, as long as I ensure I get at least 30 minutes of brisk walking done every day, and some longer walks on the weekends, it is better than nothing, and should help improve my fitness as I gradually lose weight through dieting (a cross between a daily 'standard' diet plan of around 2200 kcals that is a modest version of CRAN, and a couple of low-cal days (of around 1,500 kcals) along the lines of the 5:2 'FAST' diet, and periods when my diet goes out the window and I revert to my 'bad' old habits of eating junk foods and snacks). And when the weather is fine I can go kayaking around middle harbour with DS1, bush walking in the nearby national park, or take the bike for a spin.

All in all, it just didn't seem worthwhile paying $30 each month in gym fees when I was never getting to the gym! And in a few months time it should be warm enough again to swim laps in our backyard pool...

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Thursday, 21 August 2014

Macro Timing the Stock Market

Many years of stock market investing have proven to me that I am unable to 'pick' individual stocks that will out-perform, and I also can't 'pick' individual funds or fund managers that will consistently out-perform the general stock market (assuming that such funds or fund managers actually exist - there is a body of evidence that suggests that hardly any funds or fund managers 'beat' the relevant index after taking fees into account, and that the few that do are probably the result of random chance rather than intrinsic skill). However, having decided to (mostly) stick with investing in 'the index' (or in the case of our retirement savings, investing in a mix of indexes via the Vanguard 'High Growth' index fund that provides some automatic, low cost, rebalancing  between the various 'growth' indices - Australian shares, International shares, property, bonds etc.) I'm still left wondering if there is some way to 'time' alterations to our investment portfolio. Such as deciding when to be 'fully invested' (or even 'geared' into investments) and when it might be prudent to eliminate gearing or even move partially into 'risk free' investment in fixed interest.

As the stock market is, broadly speaking, a measure of a nation's private wealth-creation, it would seem plausible that the total stock market (eg. the 'all ordinaries' stock market index, XAO) would be correlated to the nations per capita GDP. And, indeed, a plot of this data (obtained from by selecting the 'Australian Nominal GDP per capita' and 'Australian Stock Index' options for the period 1950 to current) on a logarithmic scale, show that the XAO generally moves in line with the per capita GDP.

What is most interesting is that from this chart it seems quite obvious when the stock market was 'fundamentally' over-valued in the post-WWII period (such as in the late 1960s, in 1987 and in 1999-2001 and again in 2005-2008). The plot suggests that it was a very good idea to reduce leverage/gearing or even to short the market during 2007 to protect against a major correction (my biggest investing cock-up was failing to roll-over my index put options in late 2007), and that at present the Australian stock market isn't particularly over-valued. Indeed 2009 and 2012 look as if the were probably good times to be investing in the Australian stock market.

As I'm already fully invested (and with a bit of gearing into Australian stocks outside of our superannuation investments) the graph doesn't really provide me with much immediately useful information. But such a plot may help 'ring the bell' the next time the stock market is 'expensive' and it is a good time to move my asset allocation towards cash and fixed interest investments. It may also be a good tool for my sons to use when managing their investment asset allocation over the coming decades....

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