Tuesday, 17 September 2019

Progressing with my uni (and other) studies

A new uni semester (Q4) has just started. This semester I'm doing the 'Superannuation' subject. Browsing through the modules it all looks quite familiar, so I *should* be able to get another HD in this subject. So far I've completed four out of the twelve subjects required for the Master of Financial Planning degree, and have gotten two HD's (in Communication and Ethics for Financial Planners, and Investment Planning,) one D (in Financial Planning), and a Credit (in Commercial Law).

My GPA for 2019 (so far) is 6.0 which is just at the cut-off for getting onto the annual "Dean's List". Either a D or HD this semester will be enough to get on the Dean's List for 2019, but I'd prefer to get an HD this semester, as it will improve my chances of getting a university medal when I graduation.

My GPA overall (so far) is 6.25. To graduate 'with distinction' I'll need my GPA to be above 6.00, and for the Dean's Medal award at graduation I'll need a GPA above 6.00 AND be in the top 2% of my 'cohort' (which I think will be all the postgrad students graduating from the school of business that year). Hopefully I can get mostly HDs and Ds for the remaining subjects and get my final GPA to  6.50 or above. It's hard to know exactly what GPA will be sufficient to make it into the 'top 2%'.

This semester I also want to finish off the specialist courses in Margin Lending and SMSF that I'm doing with IIT, and also finish off the ADFP I'm also enrolled in with IIT. So I'll be quite busy studying for the rest of this year. Next year I'll only be doing my WSU studies, so it should be a little bit easier to ensure I get as many HDs as possible. Once I've finished the Masters degree I then plan on doing my CFP (the Masters degree will give me credits for three of the four required CFP courses) and to enrol in a PhD in Financial Planning. We'll see if things go according to plan...

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Thursday, 12 September 2019

Trying "12:36" (intermittent fasting) for a change

My 'diet' hadn't been working too well this year - I'd stopped tracking my daily intake and gotten into a bad habit of buying snack foods when doing grocery shopping and then browsing on them while watching TV in the evenings. Instead of losing weight, I'd been slowly gaining weight this year!

So, after reading about 12:36 ('alternate day'(ADF), or 'intermittent') fasting producing some good results for weight loss and improving a range of health markers, I decided to give that a go. I'd previously found it quite easy to stick to a five-day regime of my version of FMD ('fasting mimicking diet') that involved a balanced but low-calorie (~600/day) regime for five days, but after initially intending to do that once a month (and stick to my 'standard' healthy diet plan the rest of the time), I'd found it too much of a chore to buy and prepare the fairly specific food items for FMD. After doing it a couple of times I'd never gotten around to it again...

Therefore, the '12:36' fast seemed like a good idea, as it will be a lot easier to implement. The original version of 12:36 is to eat 'ad libitum' (whatever you feel like) for 12 hours (eg. from 8am to 8pm) and then eat nothing for 36 hours (i.e. have a fasting day). That has been applied to 'normal' weight humans, but as I am obese (BMI ~34) I really don't think having any 'ad libitum' days is a good idea (I can easily eat a family pizza and a couple of packets of confectionery or a family-sized block of chocolate in an evening if I'm in the mood). Therefore, my version of the '12:36' diet plan is to stick to my standard, healthy food plan most days of the week, and simply have a fasting day every Tuesday and Thursday. If I'm really keen I might also stick to my low-cal 'FMD' diet regime some weekends.

I experimented with doing a couple of days of fasting last week, but not stictly as I did eat a few food items on those days. I ended up having 936 cals last Tuesday and 685 cals last Thursday. I didn't feel particularly hungry on those days, so I stuck to a proper fast on Tuesday this week (no food at all) and today. I've actually found it very easy to 'fast' - not feeling very hungry at all (no more peckish that I often feel at 4pm after having a normal breakfast and lunch!).

Studies have shown that ADF has similar benefits (at least in animal studies) as CRAN, so I think this might be my ideal diet regime. The biggest plus from my point of view is that it is incredible easy to implement - no special foods to buy or prepare, and nothing to keep track of on the fast days.

So far the only 'glitch' caused by fasting is that one day I completely forgot to take my multivitamins and prescription medications in the morning as I didn't have any breakfast.

So far I haven't been on ADF long enough to determine what the long-term rate of weight loss might be, but I'm hoping to lose weight at a steady rate of 0.5-1 kg/wk once the initial 'water loss' period is over, and then slowly move towards my ideal BMI (70-75kg) over the next 12-18 months. Hopefully my rate of weight loss will slow down as I approach my ideal BMI (it takes a lot more calories to maintain and move 110kg compared with 70 kg!) - but if not I'll just replace the 'fast' days with the more modest FMD food plan on those days once I get close to the lower bound of the healthy weight range.

So far the initial results look quite promising:

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Monday, 9 September 2019

Sydney Planning for Population Growth - a house built on sand.

A read a feature article in the SMH about how Sydney's population is expected to grow by 1.3 million over the next decade. The article is full of pretty computer generated 3-D views of 'projections' of where this increased population will be housed (mostly west of Paramatta), but, having looked at the data for my suburb, I have to question whether this whole planning exercise is built on pretty dodgy data foundations.

When I selected my suburb the 'model' responded that the 2016 population was 2,656 and that by 2031 it would increase to 2,677. Really? An increase of only 21 people?

Given that the brand new Northern Beaches hospital was recently opened in this suburb, resulting in rezoning from single dwelling to medium for quite a few blocks (one house nearby was already replaced with a block of six or so units just this year), and that the nearby High School is slated to be moved to another location and replaced with a new 'town centre' featuring three apartment blocks of around 10-15 floors each, I have to wonder at the accuracy of all the 'data' being used for these projections and modelling.

God help us if they are actually planning infrastructure developments based on these models.

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Thursday, 5 September 2019

AMP casting Financial Planners adrift

An article in today's SMH describes how AMP has started cancelling the licences of some of its 1500+ aligned financial advisers. The article parrots the AMP line that this action is to take a 'tough stance' as "some advisers were not going to meet new regulations imposed by the government to abolish commissions and increase compliance".

This implies that these advisers are being dumped due to some compliance issue, whereas the reality is that those adviser's "business economics simply aren't strong enough" -- which is AMP's way of saying that these advisers don't generate enough revenue to make it worth AMP keeping them as authorised representatives.

Those advisers will now in the difficult position of having to find a new AFSL to get registered with, or, if they decide the quit the industry they find that the value of financial planner's "books" of clients being worth a fraction of what it has traditionally been - due to reductions in ongoing commissions and increased costs (compliance) for servicing clients. This is reflected in the fact that AMP has also slashed the amount it will pay their advisers as 'buyer of last resort'.

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Monday, 2 September 2019

Government meets demands of AFA and FPA lobbying - FASEA exam and education deadlines extended

Due to the large number of AFA and FPA members that were unhappy with the 'short' timeframes allowed to a) pass the FASEA Financial Planner examination (which basically just tests the ethics and best interest concepts that all financial advisers should already have embedded into the day-to-day practice), and b) upgrade their educational qualifications to meet the new minimum requirement of the equivalent of a tertiary degree in financial planning, the AFA and FPA have been actively lobbying the Federal government to extend the current deadlines.

The rational for extending the FASEA exam deadline was that it had originally been announced as being "two years" to pass the exam, but due to the time required for FASEA to actually develop the exam with ACER and implement the first round of exams in June, the original deadline of 1 Jan 2021 would have 'only' allowed 18 months for existing financial planners to pass the exam (or be deregistered and have to go through the 'new adviser' process). The associations also complained that due to the time taken to mark exams and issue results, the last possible session for sitting the exam and receiving notification of a 'pass' before the deadline would have been Sep 2020, not the end of the year. In the end the government agreed to change the exam deadline to 1 Jan 2022 (a full 12 months extension), which allows more than two years to sit and pass the exam (I sat my exam in June and passed, and around 90% of the first cohort passed, so it isn't a particular difficult exam).

The deadline for the educational requirements was originally 1 Jan 2024, which seemed perfectly generous to me - even doing a full Masters or Bachelors degree in financial planning would only take 4-6 years part-time for those with no advanced standing for 'prior learning' such as the advanced DFP or a CFP qualification. But apparently due to business and family commitments (which are the normal status for nearly all part-time students) many financial planners had indicated it would be 'too hard' to meet this deadline. So, the deadline for the educational requirements has been extended by two years - to 1 Jan 2026.

The AFA and FPA have expressed the hope that this extended deadline will allow more planners to remain in the profession. Personally I think this would be due more to older, existing planners being able to keep working until the end of 2025 without needing to upgrade their educational qualifications, than many more planners attaining the higher educational requirements simply due to having another couple of years to complete the studies. Those who complained the most (planners with many years of experience and no tertiary qualifications) will still find it a shock to go 'back to school' at a university level, regardless of how much time they are given to complete the courses.

On the downside, the changes mean that the public may still be getting 'professional advice' from financial advisers that don't have a tertiary education for another five years...

Both changes will require legislation to be passed before coming into effect.

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Net Worth: August 2019

Although the equities markets recovered slightly towards the end of August, this did not completely offset the sharp declines experienced when the US-China 'trade war' became more intractable earlier in the month. Therefore, my geared stock portfolio and superannuation (which is mostly invested in Australian and International share markets via the Vanguard High Growth fund) investments declined by $11,061 and $10,163 respectively.

The net value of my geared stock portfolio continues to reflect the ~$2,600/mo of startup costs for my financial planning business that are being funded using my 'portfolio loan'. I haven't got any clients yet, but my goal is still to get a few clients by the end of 2019, and (hopefully) enough clients by the end of 2020 to at least cover the running costs of my home business. The major costs are the monthly fee to the AFSL ($1,150/mo), the monthly fee for Midwinter (admin) basic subscription (~$200/mo), and the costs of my uni studies (about $1,200/mo on average) and FPA and AFA memberships (~$100/mo).

The estimated value of my half of our home remained unchanged, as the local sales data was not updated last month, but the CoreData index of Sydney house prices showed a 1.5% gain during August, so it definitely appears that the decline in property prices has bottomed out after the two consecutive cuts in the cash rate by the RBA, and the introduction of personal income tax cuts by the Federal government.

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Monday, 12 August 2019

Is Labor doomed to mostly stay in opposition for the rest of this century?

Putting aside the fact that Labor managed to loose the last election (contrary to most peoples expectations), I was reminded today about the rapidly growing over 65 demographic in Australia (15% of the population in 2017, up from 9% in 1977. And projected to comprise 22% of the population by 2057 and to reach 25% of the population by 2097). Combine this with the fact that the two-party preferred breakdown shifts from Labor to NLP with age, and it looks as if it might become increasing difficult for Labor to form government in Australia during the remainder of the 21st century.

Age     two-party vote (%)
         ALP      NLP
18-24    59.5     40.5
25-34    58.5     41.5
35-49    51.5     48.5
50-64    46.0     54.0
65+      39.0     61.0

While the young tend to favor progressive policies and redistribution of wealth, older voters tend to be more conservative and prefer lower taxes. This attitudinal shift tends to occur with age - the same cohort of twenty-something voters that voted "It's Time" for a Labor government in 1972 and the aging baby boomers that mostly voted NLP in the last election. Therefore, it can be expected that as the percentage of over 65s increases, this should boost the overall two-party preferred vote of NLP at Labor's expense.

Another factor that might work in NLP's favour is that as the population ages and once radical social agendas become 'mainstream' they tend to be adopted by the conservative side of politics. Whereas the Labor/Green policies constantly have to be ever more progressive to appeal to their 'base' of young voters.

This also explains why Labor occasionally spruiks the idea of lowering the voting age further -- as these voters would be predominately Labor/Green supporters.

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Thursday, 8 August 2019

Passed the FASEA exam

The results from the June FASEA exam sessions were released today - I'm glad I passed as that is one less thing one my 'to do' list as a financial planner (and resitting the exam would cost around $500 each time!). All registered financial planners in Australia are required to pass this exam (on ethics and compliance/legislation) by 1 Jan 2021 or lose their registration.

Apparently 579 (out of approximately 25,000 registered advisers in Australia) sat the exam in June, and about 90% passed the exam.

When the current semester at Western Sydney Uni finishes in a few weeks I'll also be 1/3 of the way through my Master of Financial Planning degree, so the extra educational requirements that come into force on 1 Jan 2024 for existing advisers are also progressing nicely (although it costs a small fortune).

Now I just need to get my first client!

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Wednesday, 7 August 2019

Saving money by 'switching' Electricity Supplier/Plan

Late last year I finally got around to using the State Government's "Energy Watch" website to compare my electricity supplier/plan with others that were available. After entering some facts about my current bills (costs and usage pattern) it turned out that the best alternative for us was 'switching' to a different plan offered by our current supplier. (Because I didn't actually change supplier I've since received reminder emails from Energy Watch saying that I didn't complete the switching process).

As I have setup automatic payment of our electricity bills by direct debit (I just have to make sure I remember that the charge is due, so I have enough money in that bank account!) the best plan available for us was one where there is a hefty (around 25%) discount on the energy usage component of the bill (ie. everything except the daily 'supply'/connection charge) if the bill is paid "on time". It also involved locking us in to that supplier for a period of time, but as I hadn't bothered switching suppliers for the past decade that isn't an issue.

Looking at the four quarterly bills we paid for 2017/18 vs 2018/19 our figures were:

FY 2017/18 kWh = 8,941 cost = $2,367
FY 2018/19 kWh = 9,065 cost = $2,092

Therefore our usage had increase 1% (no significant change) while our bill had dropped 12%, despite only making the switch to the discounted plan at the end of 2018.

We also saved a little bit by paying more attention to our usage during 'peak' times - managing to reduce our 'peak' time electricity usage from 10% of our total to only 6% (basically by DW not doing any washing during the 'peak' hours, and us not starting to cook dinner most days until after the 'peak' period ended (peak period is 2pm-8pm on weekdays). Peak electricity cost around 60c per kWh, compared to 27c for 'shoulder' periods (7am-2pm and 8pm-10pm) and 13-16c for 'off peak' (10pm-7am) and 'dedicated circuit' supply (which I think is our hot water tank).

Switching plans half way through the year saved us around $250 last financial year, and we should reduce our annual electricity bill by about another $250 this financial year.

The comparisons don't take into account the price changes for electricity over the past two years - as prices have increased 9% during that period, our bills would have been even higher if we hadn't switched plans or reduced our 'peak' usage.

The next item on my 'to do' list relating to electricity costs is to get our solar panels/inverter checked and possibly repaired. We had solar panels installed on our garage roof about ten years ago, and because the cost was subsidised by a government rebate and there were initially very generous 'feed in' tarriffs applied, the system had paid for itself after only 2-3 years, and the solar power had been subsidizing our electricity bills (until the inverter stopped working a couple of years ago).

While our solar power system is out of warranty (and the supplier went out of business long ago), it might be worth getting a new inverter installed (if the panels are still OK). I made a few inquiries about getting a repair quote, but most solar panel suppliers only seem interested in selling new system.

Getting the solar panels working again would only reduce our total mains usage by about 10%, but it would mostly cut our 'peak' and  daytime 'shoulder' use, so it would have slightly more impact on our bills than on our mains electricity consumption. It would also help cut our contribution to carbon emissions a little bit (but probably not as much as the fact that I now get the bus and train to work each day, rather than driving).

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Thursday, 1 August 2019

Net Worth: July 2019

My net worth total was marginally higher at the end of July (+$1,873 or 0.08% compared to last month) at $2,382,540. This was due to a significant increase in the balance of my retirement savings (SMSF and ColonialFirstState superannuation accounts) that was largely offset by a drop in the estimated value of our home. In reality, Sydney house prices stabilized during June/July, but this was masked by the fact that last month I didn't have updated local sale price data, so I had used the previous month's estimate. So I basically included the June decline in house price in the July figures.

My direct stock and managed fund investments (via margin loan accounts) also showed a slight decline during July, but the reality was the stock markets rose during July, but my net stock portfolio total also included some draw downs on my 'portfolio loan' for payment of uni fees, a monthly transfer of $1,500 to cover my financial planning business fixed costs, and payment for an unlisted investment of $4,215 in the company Adviser Ratings (via a crowdfunding campaign). Theoretically I should include the value of the Adviser Ratings shares in my portfolio, but I can't be bothered (it is probably also prudent to 'write down' the value of this investment to $0, as they are illiquid and of dubious value unless the company does well and eventually floats on the ASX (or gets sold to an investment company).

Overall, the stock market gains of 2019 have been largely consumed by my expenses relating to my financial planning business running costs (~$2,000/month) and my university fees (~$1,000/month) for the Master of Financial Planning degree. Hopefully within two years my business will have reached 'break even' and I will have completed the Masters degree (if I decide to continue on to do a PhD in financial planning the fees should be covered by RTS government funding).


The $7,900 valuation of the S type Jaguar I bought last year might also be optimistic - it has an electrical issue (the new battery keeps going flat within 1-2 weeks of being charged up - probably due to the fact the the brake lights stay on even when the engine is off and the key removed from the ignition!). This car is due for registration renewal this month, so I'll have to arrange for it to be towed to the local mechanic to get repaired and obtain an inspection report ('pink slip') so I can renew the registration before it expires... getting the car towed will be a little bit tricky as the anti-theft system locked up the steering when the battery was disconnected for charging, and the NRMA road service mechanics were unable to unlock the steering. So it will be hard for a tow truck to get it out of the garage and onto the street...

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