Wednesday, 20 June 2018

Money for nothing, and flights for free

Like many people I like to get something for nothing, so the chance to get enough free 'frequent flyer' points to 'pay' for round trips from Australia to New Zealand for a ski trip for myself and DW was quite attractive. So, last April I Googled "QFF bonus points no annual fee" to see what credit cards were currently offering a) a sizable number of 'bonus points' for obtaining a new credit card and simply using it for my normal monthly expenses, and b) would not cost me anything (no annual card fee for the first year).

The card I decided on was the 'ANZ Frequent Flyer Black' card. The card was offering 75,000 'bonus' points if you got the card and made $2,500 of purchases using the card within the first three months. As I normally put about $2000+ per month on my credit card (for standard expenses such as groceries, utility bill payments, petrol etc.) and pay the amount due in full each month, it would be no trouble simply putting those charges on a different card for a couple of months. The online application took about five minutes to fill in, and, because I included some investment income (dividends) in the financial details, I received a phone call a few days later asking for evidence of the dividend income I'd listed. I simply had to send a pdf statement of the past 12 months worth of dividend payments, sourced from the two share registries that do the admin for most Australia shares.

The card arrived a week or so later, and, as expected, I easily met the required 'spend' amount within the first two months. Now that the 75,000 QFF points have been 'statemented' I just have to wait until they get transferred to my QFF account, and then I'll phone up to cancel that credit card. Meanwhile, since I've met the required spend amount, I've switched back to using my normal credit card.

The 75,000 points will be sufficient to 'buy' two round-trip economy class seats from Sydney-Christchurch (they currently are listed at 36,000). And it cost nothing. Well, almost. I did manage to forget to pay the first monthly statement by the due date (my normal credit card bill gets paid automatically via direct debit from one of my savings accounts), so I ended up paying about $30 in interest. Still, overall it is a very cheap way to fly from Australia to New Zealand!

Once I've cancelled that card I *might* do a similar thing with a credit card from another bank, although at the moment the best offer I can find is 'only' for 40,000 QFF points. Once the ANZ account has been closed for at least 12 months, I could apply for a similar offer as a 'new' ANZ customer again, although it seems slightly unethical.

Aside from costing me a few dollars when I forgot to make the monthly payment (in full) on time, the only 'downside' of this technique is a potential 'hit' to ones credit score. So, if you are about to apply for a major loan (eg. a home loan), then this probably isn't a good idea. And if you don't have a good credit score, you probably won't get approved for such a card anyhow. Also, unless you are used to charging your expenses to a credit card and paying off the balance IN FULL each month, it would be highly inadvisable to start using a credit card just to qualify for some frequent flyer points. Another thing to look out for is any 'service fee' that may be added to bills paid using a credit card (for example, some utility bills add 1% or more to your bill amount if you pay using a credit card). Similarly, Coles and Woolworths don't apply any 'surcharge' for paying for groceries using a credit card, whereas Aldi adds on a small charge for making payment via credit card.

Another thing to watch out for is cancelling your card too soon - before the FF points have actually been transferred into your FF account - such transfers are usually only processed when the following monthly statement gets processed. So, if you pay off and cancel your credit card as soon as the FF points appear in your online transaction listing, they may never arrive in your FF account.

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Friday, 8 June 2018

DW working again (again)

It's been more than a year since DW was made redundant by the multinational company I work for (so far I've still got a job - finger's crossed), and in that time she has only had a couple of short-term periods of employment, and has spent a lot of her time doing various free courses at TAFE and community colleges while applying for jobs. She recently had a couple of interviews with a local company for a part-time admin role, and she has now been offered the position (starting next week). Hopefully she enjoys the work and it leads to a permanent job, possibly evolving into a full-time role over time. The company is located only a short bus trip from where we live, so it is certainly convenient from a commuting point of view.

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Net Worth: May 2018

My geared stock market portfolio declined by almost 10% last month, and the estimated valuation of our home also declined slightly. The value of my retirement savings increased somewhat. Overall my net worth decreased by $16,965 (0.74%) during May.

I've started doing some UberEats deliveries in the evenings as I quite enjoy driving around our local area and I can make around $25/hr gross during the peak 6pm-8pm period. Petrol costs will consume around 20% of the proceeds, but on the other hand it will mean that a portion of my existing car expenses (registration, insurance, servicing) will be tax deductible. Depending on how many evenings a week I feel like doing UberEats deliveries, I could earn around $10,000 pa, which I intend to add to my retirement savings as an 'undeducted contribution'.

I also decided to sell off all my individual stock holdings (held within my CommSec and Leveraged Equities margin loan accounts) this week. After paying off my margin loans (and paying any capital gains tax liability) I'll also invest most of the proceeds into my superannuation account. The trigger for deciding to sell off my shares at this time was the possibility that Labor may win the next Federal election, in which case their proposed changes to the treatment of long-term capital gains might have significantly increased the amount of tax payable.

DS1 turned 18 recently, so I've added him as a trustee and member of our SMSF. Adding his details using the eSuperfund portal was very quick and easy, but resulted in being sent a 103-page pdf file to printout, sign in about 20+ places (all three of us), and also get some identification documents for DS1 certified by JP... Once the paperwork has all been finalised, DS1 will be able to roll-over his existing superannuation account balance (with a retail fund manager) into our SMSF.

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Tuesday, 1 May 2018

Net Worth: Mar-Apr 2018

I've been quite busy at work, especially at the end of the month, so I didn't get around to doing a Net Worth post for March. So here are the snapshots for March and April:

Everything was down in March, with my geared stock portfolio shedding $33,764, and my superannuation account balance losing $14,037. Real Estate continued to 'correct', so the estimated house price (my half) declined by $13,474. Overall my NW decreased by $61,043 (-2.64%) that month.

April was a mixed result, with property prices continuing to weaken, reducing the estimated house price to $830,451 - a drop of $9,069. On the other hand, the local and international stock markets recovered, so my geared stock portfolio net value rose to $229,186 (up $22,305 or 10.78%) and my retirement savings rose to $943,899 (up $24,457 or 2.66%), helped along as usual by the employer SGL contribution and my 'salary sacrifice' contribution.

Overall, my NW declined by -$61,043 in March, and recovered $37,912.

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Thursday, 1 March 2018

Net Worth: Feb 2018

My NW decreased slightly during Feb, almost back to where I was at the end of 2017. Weakness in both the international share market (which affected our retirement savings) and the Sydney real estate market resulted in an overall decline in net worth of -$6,115 (-0.26%). The market recovered some of its earlier losses towards the end of the month, although it showed continued weakness in the final days of the month.

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Thursday, 1 February 2018

New Worth: Jan 2018

My personal net worth increased slightly during January (up 0.45% to A$2,322,494), mostly due to an increase in the value of my retirement savings (up 1.22% or $11,334). My geared stock portfolio ended almost unchanged at the end of the month (up 0.07% or $162), having given back most of the month's gain during the final two trading days. As expected, the estimated valuation for our home decreased during January (down 0.30% or -$2,591), driven by weakness in the Sydney real estate market reflected in average sales prices for our suburb.

While predictions are notoriously inaccurate, especially ones about the future, I anticipate my net worth may end the year in the range A$2.3m-A$2.5m. The lower figure would reflect stagnant house prices during 2018, but not a 'crash', and lack-luster stock market performance being offset by my continued retirement savings. Any significant adverse event (loss of employment, significant downturn in Sydney real estate throughout 2018, or a major stock market crash) could easily see my NW dip below this figure. The upper figure assumes an overall gain of around 7.5% during 2018, which would represent a dollar amount of around A$174,000. While not outside the realms of possibility, I can't see any evidence to suggest that either the property or stock market (or both) will perform well enough during 2018 to achieve that result. It will be interesting to see how 2018 does pan out, and what NW figure I end up with at the end of this year...

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Wednesday, 3 January 2018

Net Worth: Dec 2017

DS1 is mid-way through his European vacation. He got a good enough ATAR to get into his first choice of university course, and has already completed the offer acceptance online. He'll finalize his enrolment details when he returns to Sydney at the end of January, and start preparing to start university at the end of February.

My net worth increased again in December, with my geared share portfolio adding a bit over $10,000 to my net worth, and my retirement savings also increasing by around $10,000. Some of the increase in the estimate of my retirement savings account balance is due to my making a slight adjustment to the calculation formula used to work out the % of the total SMSF balance that belongs to each member. I had previously simply added up the contributions made by DW and by myself, and used the relative % of total contributions to apportion the current balance to each member. The correct method is to calculate the relative effect of each contribution to the current total balance at the time of each contribution. The revised calculation method accounted for most of the increase in my SMSF account balance between Nov and Dec.

The estimated valuation for our home increased slightly, as the median sales price in our suburb rose slightly, bucking the general downward trend in property prices in Sydney. 'Experts' are now predicting a decrease of between 4%-10% in Sydney property prices during 2018, which would make it difficult for my NW to continue to rise during 2018, unless there is a substantial shift in investor focus from real estate to the share market, which might assist my geared share portfolio.

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Tuesday, 26 December 2017

Starting early on the New Year resolutions

My perennial self-promise has always been to loose weight and exercise more, and yet again this year I didn't manage to make any progress with either. So, as we were going to have a low-key Christmas anyway this year (as DS1 is away in Europe on a back-packing holiday before he starts uni at the end of February, and I won't be visiting my parents at the lake house until the New Year) I decided to eliminate the Christmas tradition of overeating and having lots of sweets, and instead get an early start on sticking to my diet plan. Nothing too onerous, just healthy breakfast, a modest lunch and healthy dinner, and a serious attempt to eliminate desserts and snacks from my diet. I also need to start tracking my daily step-count and make sure that I meet my target of at least 10,000 steps every day.

Aside from health and fitness, my others goals for next year are to complete the Diploma of Financial Planning course I'm doing via distance education, as well as a Six Sigma Green Belt certification I am doing at work. I've pretty much resigned myself to not re-enrolling in the MSc/PhD by research that I was doing part-time, as I can't see that I'll every get enough time for it while I'm working full-time, especially if I have any health issues such as during the past couple of years. I'm due to re-enrol by next July, so I'll wait and see if I my eczema improves significantly before then.

My other goal for 2018 is, of course, to keep my job as long as possible. Ideally I'd like to remain employed full-time for another 7+ years. But these days one could get retrenched at any time. And as DW has found out, it isn't easy to find a suitable full-time job when you're nearly sixty, despite the economy doing quite well at the moment.

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Thursday, 14 December 2017

DS1 HSC results out

DS1 got his HSC marks via email last night, and sent them via IM to DW and myself (he is currently on a train between Vienna and Venice - halfway through his 10-week post-HSC European back-packing holiday). His results were close to what he expected, or slightly better:

Economics 93/100 band 6
Mathematics 90/100 band 6
Modern History 90/100 band 6
Software D&D 89/100 band 5
English Adv 87/100 band 5
English Ext1 43/50 band E3
Chemistry 83/100 band 5

Plugging these numbers into an ATAR calculator suggests he should get an ATAR of around 95.75, which should be plenty for him to get offered a place in his first choice uni course (Commerce/Computer Science double degree at UNSW), especially as UNSW offers 'bonus points' for getting top results in the top bands in English Advanced, English Extension 1, Mathematics and they also offer bonus points for having completed the Gold Duke of Edinburgh award.

His actual ATAR will be released tomorrow morning, and the first round of university offers will come out on December 21. I'm very happy with his HSC results, and delighted that he should be getting into his first preference uni course. Hopefully DS1 gets home safely from his European adventure at the end of January, and is keen to apply himself to his uni studies in 2018.

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Friday, 1 December 2017

Net Worth: Nov 2017

DS1 has arrived in Europe for his 10-week post-HSC/pre-uni vacation. He had a couple of days stop-over in Singapore on the way, then spent a few days in Frankfurt before getting the ICE train to Berlin. He had a few days there (seems to be mostly visiting museums based on his IMs, but that might just be the sanitized version he is telling mum&dad). He left Berlin yesterday, travelling by train (he has a rail pass for ten days of train travel during his time in Europe) to Prague for the next stage of his journey. His HSC result and ATAR will arrive via SMS this month, and he'll find out if he gets offered a place in his first choice for uni (a Commerce/Computer Science double degree at UNSW).

DW is still looking for a new job, but is filling in her time doing some short courses and attending free investment seminars, playing table tennis etc. The sale of her investment unit 'settles' in a couple of weeks time, and she is planning on putting most of her $100K capital gain into her superannuation fund.

My net worth increased to a new high this month - due to the strength of the share market providing strong gains in both our superannuation investments and my geared stock portfolio. The valuation for our home dropped slightly (back to where it was two months ago), as the current weakness in the Sydney real estate market spreads to the more affluent suburbs of Sydney. The general consensus seems to be that the Sydney property market will decline by a modest amount during 2018 (maybe 5%-10% decline), but I'm not confident that we will see substantial gains in Sydney real estate during the coming decade, and we could see further falls if interest rates start to pick up.

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