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Sunday, 31 March 2013

NBN Co - 'No Broadband Network'

The government election ads (oops - they're just 'informational' ads) about the NBN 'rollout' continue to irritate me. Ignoring the fact that the whole 'gold plated', inefficient and snafu-prone NBNCo process (sound like anything else the Labor government has implemented recently?) is way over-budget and behind schedule, when exactly will NBN come to our area? After all, its the rich (aka net 'tax-payers') that are funding the whole thing, so surely they should get some benefit, even if disadvantaged (ie. lots of the population on the dole or other government assistance) areas are intended to get it first?

Sure, we live in a 'blue-ribbon' Liberal seat, so despite assurances that the NBN rollout-schedule has been developed 'independantly' of government and has not been targeted at marginal Labor seats in western sydney (any correlation is pure coincidence, we're told), so I'm not surprised that we are can't expect to see NBN coming to our area any time soon. But, with a major new hospital due to be constructed in our area 'soon', I'd have expected a prospective rollout-date to at least be available on the NBNCo rollout plan website - after all, it says 'to find out when the NBN is coming to your place, enter your full address'. Instead, for our area, you get a 'not available' message, which obviously means that there's not even any prospective of the rollout starting here within the next 3 years, given there is a category for 'construction commences within three years' which apparently doesn't apply to our area.

Given the likely change of government in September, which may see the whole NBN scheme effectively abandoned (there are apparently much cheaper ways to achieve pretty much the same end result), the end result will probably be that taxpayers end up footing the bill for providing cheap, fast internet tv to low socio-economic areas and then have to pay to get fast broadband via some other means than NBNCO - much as they currently do?

This may have been Labor's plan all along - rollout NBN to key Labor areas to buy some more votes ('bread and circuses' for the masses) at taxpayer expense (aka stick it to the 'rich', or 'class warfare'), and then abandon the NBN scheme as 'unaffordable' before getting around to servicing most of the 'blue-ribbon' electorates. I can't see that the NBN is going to achieve much increase in national productivity (especially given recent moves away from 'telecommuting' by IT companies), so it will probably just end up shifting leisure time activity from viewing free-to-air TV to internet tv and movies-on-demand. Hardly a great allocation of the countries wealth.

Subscribe to Enough Wealth. Copyright 2006-2013

Friday, 29 March 2013

Learn from the mistakes of others

There is a german word "schadenfreude" (meaning 'pleasure derived from the misfortune of others') which is sometimes used in English, as we have no equivalent term. Although there's no pleasure to be derived from sad tales such as this, we should be able to learn a lesson from such tales of woe (perhaps this is 'schadenwissen' ?):

1. Don't believe your 'friend' the bank-manager when he tells you that everything is alright. If you were worried enough to go talk to him, you should at least put some concrete risk mitigation strategies in place while you're there, for example

2. Diversification applies to ALL forms of investment. So keep your savings in several different banks, as well as a mix of at-call, term deposit and other 'cash' investments, not all with one particular institution. It may be the one that 'goes broke', or it may be the the one that the government doesn't bail out...

3. Point 2 has to be tempered by a consideration of cost and convenience. Keeping some of my cash in an overseas bank might make sense (eg. in the unlikely event that Australia was invaded, or all Aussie banks nationalised etc.), but putting some in an Irish bank, some in a Nigerian bank, some in a Canadian bank etc. would be expensive, time consuming, and confusing.

When considering risks, it is tempting to completely ignore low-probability events that would have a large impact if they were to happen. In reality, every risk should be ranked according to its likelihood X its potential impact - so some thought should be given to events that are unlikely but would be devestating if they occured. Fortunately, there is often a simple way to mitigate against such events.

Subscribe to Enough Wealth. Copyright 2006-2013

Monday, 25 March 2013

Pomp and ceremony

I flew up from Sydney (NSW) to Townsville (QLD) last week to attend my Master of Astronomy graduation ceremony, taking DS1 along for the experience (and to try some snorkelling on the great barrier reef). I hadn't bothered attending my last couple of graduations (for Graduate Diplomas), but this time I decided to attend as my niece happened to also be graduating at the same ceremony (with an honours degree in microbiology), and because getting a Masters degree had been one of my long-term goals - and also because it might also be the last of my graduations that my parents are able to attend (they're each about 80 years old now). I was pleasantly surprised to be awarded an Academic Medal at the graduation ceremony (getting it wasn't a certainty, and they won't let you know beforehand if you will get the award), so overall I'm happy that I decided to make the effort to travel the 1600km to attend graduation. DS1 seemed duly impressed by all the pomp and ceremony (and he managed to stay awake during all the speeches!), but I'm glad I didn't drag DS2 along as he would have been bored to death.
Attending graduation wasn't particularly cheap, with the cost of the long-weekend coming close to the total fees I'd paid out for the degree (around $2500)! Return airfares for DS1 and myself were about $500, and the four nights accomodation for us and my parents all (sharing one room with one queen size and two single beds) was another $500 or so. The motel was quite basic but clean and tidy, and was very well situated - just across the street from the beachfront, and only a short walk from the marina, aquarium and museum. DS1 had a great time at the nearby 'waterworks' playground.


For this graduation I chose to pay $175 to purchase the academic gown, hood and 'mortar board', as it may be possible to use the same gown at my MSc and PhD graduations in the future (only the colour of the hood and the style of silly hat changes). If nothing else I'll be able to use it as 'Harry Potter' fancy dress at the office Christmas party ;) Renting the gear would have cost about $85, which is quite expensive considering academic gowns hardly ever vary in design (although JCU did change their choice of gown style in the 1990s - from a tropical tan colour to the more traditional black gown), and gowns get hardly any wear-and-tear during a graduation ceremony. The uni co-op bookshop (which has a virtual monopoly on gown supply and hire) must be on a real money-spinner, as they can rent out the same gear at 3-4 ceremonies each year, given that the rental charge must be about the same as the wholesale cost! The biggest cost to them would be for ironing and storage of gowns between ceremonies.

Although DS1 and my parents took some snapshots of the graduation ceremony, the professional photos turned out quite nicely, so I've ordered four photos for about $110 (2 20x25cm photos for $32 each, one 25x33cm photo for $49.50, and a 'free' [for spending over $100] 20x25cm 'stage crossing' photo). Not quite as cheap as digital prints from Big W (15c for a 15x10cm print, or $2.94 for a 20x25cm print)! Although the exhorbitant cost of one set of prints can be somewhat justified by the time and cost of using a professional photographer and equipment (and I assume the uni also gets some benefit from appointing the 'official' photography company), charging the same amount for reprints seems counter-productive. Although the photos copyright is retained by the photography firm, I can't imagine many students will fork out $32 for a 20x25cm reprint. And since the 'professional' stage crossing photo doesn't look 11x better than the one my 12-year-old son took, the cost-benefit just isn't there.

Other costs associated with attending the graduation ceremony included a post-graduation dinner at a local restaurant (about $50 a head for a main course, plus drinks etc.), and three days of sight-seeing while in Townsville (it definitely wouldn't have been worthwhile just flying up for the graduation ceremony, staying overnight and flying back the following day!). Taxi trips cost around $10 each around town (good value with four people sharing a cab), and a half-day sailing schooner cruise at Magnetic Island for snorkelling cost $110 pp (lunch, snorkelling gear and use of a 'stinger suit' for the jellyfish are included). A family ticket for the reef aquarium cost a little over $40, and the local museum cost about the same (nice displays of fossils from Riversleigh, artifacts from the shipwreck Pandora (sent after the Bounty mutineers), and tropical insects).


My next graduations (for a MSc(Res) and/or a PhD) should be a lot cheaper, as they will be held here in Sydney - so I'll only have to pay for parking (and for renting a different hood and 'silly hat') ;)

Subscribe to Enough Wealth. Copyright 2006-2013

Sunday, 24 March 2013

Rental Property progress - two steps forward, one step back

No luck selling our rental property yet - only a few expressions of interest during the past 6 months, and only at a substatial discount to what I estimate to be fair value, so we weren't interested in accepting the offers as we aren't in any particular rush to sell the property. Now that the peak spring/summer selling season is over, we don't expect to be able sell it until next spring. Fortunately the new tenants seem quite good, although a bit tardy with paying the rent on time or in full - always a risk when you have several young adults sharing a house and each responsible for part of the rent. Their lease doesn't expire until the end of the year, so that should be one less headache during 2013.

The old kitchen sink started leaking again - I've previously repaired a crack in the drainage board with 'liquid metal' sealer, and the tap washers had been replaced and the tap reseated several times, so this time we decided to replace the entire sink and tapset. A new double sink assembly cost $149 (some similar sized 'designer' kitchen sinks cost up to $1000 or more!), and a mixer tap with swivel spout cost $75 (again, some 'designer' taps can cost ridiculous sums of money), so the capital cost is very modest. The new sink is not the exact same size as the sink it is replacing - about 3cm more front-to-back, and about 20cm less side-to-side as it only has a draining board on one side rather than both sides. Hopefully the older benchtop is in reasonable condition under the old draining board, so the plumber will be able to just cut as slightly larger hole for the double sinks and leave more of the benchtop exposed. But I hate to think how much the plumber will charge to install the new sink - aside from the larger cut-out and a couple of extra PVC fittings to suit the double sink, the old sink had its rear 'lip' embedded under a wood panel beneath the kitchen window, so there will be some fidding required to remove the old sink before installing the new one... perhaps I should ask the plumber to provide a quote before giving him the go-ahead.

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Sunday, 3 March 2013

Net Worth Update: February 2013

February was another good month for the stock market, and hence for both my geared stock investments and our SMSF account balance.

The ASX200 broke through 5,000 (the 'year end' prediction of many so-called experts only a couple of months ago!) and my net worth topped the A$1m mark once more. Maybe it will be a case of "third time lucky"? However, in real terms this is still well below the levels my NW reached in 2007, and is around the level of seven years ago. At least the trend is in the 'right' direction, and as I still have considerable levels of gearing in my stock portfolio, a little bit in our SMSF account, and a substantial mortgage on our properties, and a sustained positive trend would see a rapid rise in NW. This of course would require the US economy to continue to improve, the Eurozone start to recover and the strength of the asian region no falter. Given the experience of the past decade that is far from certain...

Assets$ Amount $ Diff% Diff
Stocks *$19,603+$17,869n/a
Retirement$481,403+$21,1284.59%
Properties$887,547+$9450.11%
Debts$ Amount $ Diff% Diff
Home Mortgage(s)$363,551-$128-0.04%
Net Worth$1,025,002+$40,0704.07%
* the Stocks figure is portfolio value - margin loans
Subscribe to Enough Wealth. Copyright 2006-2013