Saturday, 10 September 2022

Door dash update

Well, I've been doing occasional Door Dash delivery 'shifts' for about 8 weeks now. I've Dashed mostly on Friday or Saturday evenings during the peak activity time (around 5:30-8:30pm), aside from a couple of occasions where I did a few hours Dashing after dropping DS2 off at a sports competition/training (and had a few hours to wait around).

I've found that Dashing in my local 'zone' is reasonably good. There are a couple of adjacent 'zones' that sometimes pay slightly more 'bonus' during their promotional periods (where you get an extra dollar or two on top of the standard delivery fee), but one of them in quite sparsely populated, so you end up doing a lot more driving to pickup and then deliver an order. Longer trips pay slightly more, but that isn't any more than you would get spending the equivalent amount of time doing shorter jobs, so the hourly rate is about the same, but the extra distance means a much higher fuel expense. The other area is more built-up, but that means you often have to park a long distance away from the pick-up location (and waste time walking from the car and back) and also often have trouble finding a parking spot close to the delivery address. So my 'home area' is pretty much a 'goldilocks zone' for getting a decent amount of work, ease of parking, and less fuel expended.

Overall, during the past 8 weeks I've done some Door Dash delivery work on 15 days. I was off sick one weekend, so I've generally be doing two nights each week. Each session has averaged 2.75 hours, during which time I've driven an average of 54 km and made 5.13 deliveries, and earned an average of $75.53 during a session. So the average hourly gross income was $27.54 per hour, or $1.54 per km travelled. I've estimated the net income (after income tax, GST, and fuel costs) is around $23.53 per hour. The effective tax is lower than my marginal tax rate due to the business use of my car making a large chunk of the car expenses (insurance, registration, servicing and depreciation) tax deductible.

I'm on track to earn around $6,000 pa (after tax and expenses) if I continue to do a couple of three hour 'shifts' each week for the rest of this FY (up to 30 Jun 2023). I don't want to do more, as that would involve working on the less profitable days, or doing some morning or lunch time 'shifts'. I also need to stay within the annual km allowance on my cheap 'limited km' car insurance policy. I quite enjoy driving around for a few hours in my Jag, so the 'work' is quite enjoyable (a LOT less stressful than my 'day job'). It will also leave me free on Mon-Thu nights after I finish my full-time work to be able to do a couple of hours of 'cold calling' prospecting for local clients for my financial planning business.

The hourly rate (in theory) for my full-time 'day job' works out to be $54.36 per hour. I say 'in theory' as although I am 'officially' expected to work 37.5 hrs/week I usually end up doing some work in the evenings and on weekends when things get hectic. So I probably average around 45-50 hrs/week. So my effective pay rate could be as little as $40.76. So Door Dashing pays about 50%-60% of what I earn in my 'day job'. If I ever get some clients for my financial planning business the basic fee will be around $1,000 for about 10 or so hours work to produce a Statement of Advice. After associated expenses of around $250 the net revenue will be around $75 per hour. However, I also have fixed costs of around $12,000 pa, which will take a large chunk out of that (especially if I don't have many clients!). I figure I'll need at least 15 or so clients each year just to cover running costs, and as a part-time financial planner I could service up to 50 clients pa. So, my maximum revenue as a part-time financial planner would be around $26,000 pa for about 10 hours/week client work. Or $26/hour (very similar to what I can earn as a Door Dash driver!). There would be a lot of unpaid hours spent prospecting /finding clients as well. Of course this is just fee revenue for providing financial plan/SoA services. If I am engaged for ongoing services I would receive a similar (or slightly lower) 'hourly rate' for ongoing services and annual review, but would also receive a fee based on 'assets under management' (AUM) of 0.25%. If the average client had $100,000 invested this would provide additional revenue of about $250 pa per client, or possibly $12,500 additional revenue, which would move the hourly rate closer to what I earn in my 'day job'.

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Friday, 2 September 2022

Applied to do PhD at ACU, and enrol in courses for CFP (via FPA) and FChFP (via AFA/Kaplan) certifications

I may be crap at marketing and have no clients for my financial planning business, but I'll be damned if I don't end up as the most overqualified financial advisor in Australia! ;)

Having complete my MFinPlan coursework last year, I did a couple of 'specialist' courses via Kaplan Professional (one in Margin Lending and the other in SMSF Taxation and Regulation).

Since WSU declined my application to enrol as a PhD candidate (they wanted me to first complete a MRes degree which would take four years part-time and cost around $30K), I decided to apply to enrol as a PhD candidate at some other Australian universities. First cab off the rank was ACU (Australian Catholic University). I'm not religious and ACU isn't a "top tier" university, but ACU does have a suitable school of Business and one of their campuses is conveniently located only ten minute bus ride from the Sydney office of my full-time employer (although I've been 'working from home' for the past couple of years, and probably won't have to go into the office more than one day a month in the immediate future). The application will apparently take around 8 weeks to be assessed, so I'll find out if I get accepted towards the end of this year. If I'm not accepted I'll apply to some other Australian universities (an advantage of doing a PhD in Australia is that the university fees would be covered by a fee offset scholarship under the Australian Government's Research Training Program).

I'm not sure if/when I'll commence a part-time PhD, so in the meantime I decided to enrol in the CFP (Certified Financial Planner) program available from FPA (Financial Planning Association of Australia). Completing the MFinPlan degree means that I was given exemption/advanced standing for the CFP1-4 courses, and will only have to complete one course (CFP C) - the 'capstone project', which is basically preparing a Statement of Advice for a complex 'case study'. And then pass the four hour multiple choice certification exam (the 'pass mark' is 80% I think, and in July the overall pass rate for the CFP exam was 66% - so it is probably about as easy/difficult as the FASEA exam was). I'll probably enrol in CFP-C at the end of this year, depending on what else I am doing at the time. There is also a relevant experience requirement (2 years full-time or 4 years part-time), so I probably won't be able to get the CFP designation until after I have built up a bit of a 'client book'.

I also put in an application with Kaplan Professional to enrol in the AFA's FChFP (Fellow Chartered Financial Practitioner) certification program. Apparently there is automatic exemption/advanced standing granted for two of the four required courses if you have completed CFP1-4 already, so I'm hoping that having completed the MFinPlan degree (which gave me advanced standing for CFP1-4) I'll also get exemption from the courses AFA3 and AFA4, and only have to complete courses AFA1 (Business Strategy for Financial Advisers) and AFA2 (Client Experience Strategy). That would save me both time and money, and avoid rehashing coursework that was already covered in my MFinPlan coursework.

I was prompted to apply to enrol in the FChFP courses now, as the AFA and FPA just announced that they intend to 'merge' into a single new professional association covering financial planners in Australia (I'm currently a member of both associations). The merger seems like a good idea, as there was quite a bit of overlap in the services/goals of the two associations, and because the 'pool' of registered financial advisers in Australia has shrunk considerably over the past few years due to increased regulation and the requirements to pass the FASEA exam and meet the new educational requirements. The new association (which will be dominated by the FPA) plans to maintain the CFP certification, but will phase out the FChFP certification program (while continuing to 'recognise' the certification). So if I want to get the FChFP designation I had to start soon!

The FChFP courses aren't too expensive ($1,200 each) and the two courses I will need to do cover more practical/applied material relating to running a financial planning practice than what the CFP courses or my MFinPlan degree covered. Not sure how worthwhile the FChFP designation will be (I'm sure my clients won't know or care), but as I'm already a Fellow of the Royal Astronomical Society and a Chartered Chemist, being a Fellow Chartered Financial Practitioner seemed like cool post-nominal to add to my current list ;)

DFP BAppSc GDipAppChem GDipAppSc MAstron MFinPlan FRAS CChem JP(NSW)

That bloody PhD is proving to be elusive though !

***** update *****

Turns out that Kaplan is no longer accepting new enrolments for the FChFP courses, so I won't be doing that certification. Coincidentally I received a reminder email to renew my AFA subscription the same day I found out that the FChFP certification was no longer available - so there really isn't much point spending $500 or so to renew my AFA membership, especially as the AFA is likely to be absorbed by the FPA by the end of this year.

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Net Worth: AUG 2022

My monthly NW estimate has been updated in NetWorthShare for the end of August. Chart is in the side-bar.

Stocks and managed fund investments value was flat over the month - rising during the month but then selling off sharply during the past week due to hawkish comments by the US Fed chairman regarding inflation and interest rate rises. My 'Stocks' figure was only down $476 (-0.18%) to $267,365 net equity. This month I moved the value of my Perth Mint online depository bullion holdings from 'Stocks' into 'Other Assets' (which previously just included my gold and silver proof coin collection valued at bullion valuation), and I also added in the value of my art investment via Masterworks into the 'Other Assets' category.

Our estimated house price for August (my half) was flat at $1,166,000 due to there being no reported change in median house sales prices in our suburb.

The value of my retirement savings dropped slightly to $1,396,713 (down -$8,352 or -0.59%) by the end of August.

Overall, my estimated NW decreased slightly to $3,170,251 over the past month - down by $4,749 (-0.15%). 

'Other real estate' includes my off-the-plan investment apartment and my hobby farm at 'cost'. Other mortgages includes the amount that will be due on settlement for my off-the-plan apartment in late 2022. If I was tracking the estimated market value of my lake house/hobby farm and the likely increase in the value of my off-the-plan apartment since I paid the deposit, my NW would have improved slightly overall (by around +$4,500) during August (rural NSW property prices lag Sydney, and are still rising slightly). Any rise of drop in estimated NW of less than $10K is probably well within the 'error bars' due to the uncertainty associated with valuation of assets such as real estate, art work, coin collections etc. Including an estimated price increase for the off-the-plan investment unit and hobby farm would add around $709,851 to my posted NW figure. Including DWs assets and liabilities would add around $1,385,589 net to household NW, so if I was tracking total household NW it would currently be around A$5.266MM.

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Wednesday, 31 August 2022

DS2 started his first proper job

DS2 is in Year 10 and recently picked his subjects for Year 11 (and hence what he will be studying for his HSC exams/ATAR score for uni - English (with Extension 1 and possibly Extension 2), Mathematics (with Extension 1), Software Design & Development, Economics, and Business Studies). Unlike DS1 he has cut back on a lot of his previous extracurricular activities - dropping out of piano lessons and Judo classes (he still does Kendo) and not wanting to bother doing the Duke of Edinburgh awards via school (which involves some volunteering, skills activities, and some weekend/short camping/hiking trips). He has a girlfriend and is quite keen on Volley Ball (the school junior team he is in won the zone final and will be competing in the District comp next term) and he seems to spend a lot of time chatting with friends via Discord and playing online games (how he manages to still get good grades at school is a mystery).

He has reached the age where he would like some extra 'spending money' and decided that earning $10-$20 doing a bit of busking on the weekends just wasn't adequate. Unfortunately the local newspaper has gone 100% digital, so a 'paper round' was no longer an option. He had a brief go at letterbox 'junk mail' delivery last year, but decided that spending many hours over two evenings each week collating bundles of hundreds of flyers into individual sets (OK, I actually ended up doing most of the collating!) to be delivered, and then spending 3-4 hours walking around a local suburb delivering the individual sets was too much time and effort for only earning around $50-$60. I've frequently regaled him with my tale of working on weekends at a market garden for only 60c an hour when I was in high school - but for some reason I think that gave him the impression I was an idiot, rather than the intended example regarding the value of hard work.

So he dropped the delivery job and decided to get a job at McDonalds instead (the minimum wage of around $15/hr for his age group is a lot better than the 'piece work' rate paid for letterbox delivery work). In his first attempt (last year) he got through two rounds of interviews with McDonalds, but was then never offered a position (probably due to having limited shift availability at that time, plus the reduced staffing needs during the Covid pandemic lock-downs). He recently applied again, and this time he was offered a position and did his first 'training shift' (3 hours) last Tuesday. In future his shifts will be at the local Maccas that is only a five minute walk from our house, but for this initial training session he had to attend a specific McDonalds store that is about 30 mins drive from our home. I drove him there, and since it wasn't really worth driving home again when I'd have to return to pick him up a few hours later I did a couple of hours of Door Dash delivering in that area while he was doing his 'shift'.

DS2 expects to do two or three 4-hour shifts every week, so he should earn around $180 per week for about 12 hours work. He's agreed to only spend 25% (roughly) of his wages on "everyday" spending (games, movies, whatever he fancies) and to save 50% (roughly) for longer-term goals eg. saving up for an overseas trip when he finishes his HSC exams (I bought DS1 return airfares for a trip to Europe when he finished the HSC, but he had to cover his own spending on backpacker accommodation, train fares, food etc. and will do the same for DS2 as a 'graduation present'), a new laptop computer, a second-hand car when he starts uni, etc. After a bit of "negotiating" (aka disagreement) DS2 agreed that the final 25% of his earnings should be invested, with $1,000 being contributed into super as an undeducted personal contribution (so he will receive the $500 government co-contribution). Depending on how much he actually earns, that might be around half of the agreed 25%. Once he has put aside $1,000 for his annual super contribution we'll have another chat about where he might invest that portion of his wages.

As he will also receive the mandatory 10.5% employer contributions into his superannuation account (he already has about $9,000 is his superannuation account due to 'child super' contributions I had made over the years) he will end up adding around $2,500 to his super balance each year, which is quite significant considering it will then compound for around five decades before he retires ;)

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