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Sunday, 25 August 2013

House Sale Settlement Tomorrow

The sale of our investment property should 'settle' tomorrow, and all going well the balance of net funds should appear in our bank account. The sitting tenants had found a new place recently, and were scheduled to move out yesterday, and today DW will be dropping by the do a final inspection (in case there is any substantial damage to the property which would need to be claimed against the tenants' bond deposit) and collect the keys. Our agent should be handing over all the sets of house keys to the new owners tomorrow.

The net proceeds (after paying off the investment property mortgage and the various selling costs) should be just enough to clear the mortgage on our home and pay the capital gains tax on the investment property sale - although one of our home mortgage accounts is a 'fixed rate' loan that runs for another 18 months or so, and the capital gains tax won't be due until about March 2015.

Being mortgage-free will provide additional cash flow that I shall use to whittle away at some of my existing margin loan balances, and DW will use her extra cash flow and the available equity in our home to borrow and invest in a diversified share portfolio. I tend to favour investing in the stock market via low-cost 'index fund' investments, having had little luck 'picking' individual stocks (or high-cost 'managed' investment funds), but DW wants to be more hands-on, and will 'pick' her own portfolio of 5-10 stocks to invest in.

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Sunday, 11 August 2013

Apparently I'm more conservative than I thought...

Being a pro-choice, atheist I had thought I wasn't that much of a conservative, but according to the results of a survey I completed on the ABC's votecompass website my overall viewpoint is more conservative than the NLP!



I suppose that why I've ended up voting for the Liberal Party candidate in most elections despite considering myself a 'swinging' voter ;)

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Sunday, 4 August 2013

Early start to Christmas shopping

I tend to buy several small Christmas presents for the boys throughout the year, as I come across 'bargains', plus one 'expensive' item. This year I decided to order an Elenco 750R snap circuits student training kit as a combined gift for both of the boys. The present won't come as huge surprise (unless they forget about between now and Christmas Eve) as I checked if they thought they'd like spending time using it before I placed the order. The kit has received some good reviews, and seems suitable for a wide age range - DS1 (13yo) can use it to learn about electrical circuit theory and test out circuits of his own design, while DS2 (7yo) can construct simple working devices by following the step-by-step instruction manual, in a manner similar to building a Lego model. As is usually the case, buying the product online from Amazon.com was a lot cheaper than getting it from a local distributor - the kit cost A$136.32, plus a hefty A$52.00 shipping and handling fee for delivery within a couple of weeks, making a total of A$188.82 delivered to my doorstep. Getting the same product from the Australian distributor would cost A$249.95, which includes the 10% local GST plus free delivery.
 

Hopefully the boys have lots of fun playing with this kit for years to come.

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Thursday, 1 August 2013

New Worth Update: July 2013

The past month saw strength in the international and local stock markets give a substantial boost to the value of my retirement savings (SMSF) and geared stock portfolio.

However, the overall gain in net worth was substantially affected by writing down half the difference between my previous monthly estimated value for our investment property, and the agreed sale price. Settlement of the sale is due at the end of August, so next month the remaining impact to my net worth will be felt. However, it won't be apparent in the property figure as the sale proceeds will be split between paying off one of our mortgage accounts, paying off some of the 'portfolio loan' currently secured against both our property titles, and the balance sitting in a cash account. There will be a capital gains tax liability of around $60K created by the sale of our investment property, but as I use cash accounting for my finances this won't affect my net worth figure until the tax is due around March 2015.

Despite this partial write-down in the value of our investment property, my NW this month reached its highest level since May 2008. On the one hand it is nice to see the worst impact of the GFC on my NW has finally dissipated, but the down-side is that it has taken five years to do so. And considering I save about $50k pa the situation is still dire compared to where I would have been if I'd been invested 100% in cash and fixed interest investments since late 2007...

Assets$ Amount $ Diff% Diff
Stocks *$15,694$5,246n/a
Retirement$523,216$26,8565.41%
Properties$864,689-$15,812-1.80%
Debts$ Amount $ Diff% Diff
Home Mortgage(s)$363,014-$89-0.02%
Net Worth$1,040,585$16,3791.60%
* the Stocks figure is portfolio value - margin loans

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