Saturday 30 June 2018

Is dead?

One of the sources of things to read about personal finance on the internet is It is (or at least was) an ad-free aggregator of 'personal finance' blogs. While a lot of the material was pretty lame (I suppose that it true of most blog content), at least it gave one a way to quickly browse through the title and first paragraph of a whole bunch of blogs that were supposed to be about personal finance. I'd usually scroll through the first half-dozen pages to see if there were any posts that looked interesting enough to actually click-and-read.

Unfortunately, since 26 June there hasn't been any new content appearing on Hopefully it is just a technical issue, and not the death-knell of pfblogs. If anyone knows what is going on with, write a comment.

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Wednesday 27 June 2018

Networthiq and Networthshare

I've been using networthiq to record my monthly net worth summary figures each month for many years, but last month the website wasn't available when I wanted to add my latest data (and apparently it has been having intermittent issues for a while). So I did a quick search for an alternative and found networthshare. There are slight differences in the presentation of data in the two sites, and I haven't yet manually entered data into networthshare (all my existing data was copied across within a couple of weeks of posting a request in their forum), but networthshare may be of interest to anyone currently using networthiq.

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Everything you need to know about personal finance in 1,000 words by C.J. Carlsen

While browsing to see if there were any interesting books in the area of 'personal finance' that I wasn't already aware of, I came a across "Everything you need to know about personal finance in 1,000 words" by C.J. Carlsen. The title was intriguing, and the price ($0 for the Kindle edition) was certainly a bargain. So I spent five minutes 'buying' the free Kindle edition and reading it via the Kindle cloud reader.

Overall, nearly everything in it I completely agree with, with a couple of minor tweaks. The advice to accumulate six months of living expenses before putting money into investment accounts (after paying off any credit card balances and continuing to pay off any credit card balances in full each month) is fairly sound, but rather than simply accumulating this in a savings account (often at very low interest rates), I would look around for a high-interest online savings account. Also, once you have a home mortgage, if there is a mortgage-offset account available, this might be preferable to a savings account.

The chapter on 'investing' is also US-centric, so the references to 401(k)'s, IRA's, SEP's, and 529 plans are only relevant to US readers. For those in Australia the approach would be to max out salary sacrifice limits into superannuation (possible a low-cost SMSF via eSuperfund once you have a sufficient balance to make it cost effective compared to an industry fund). The advice to invest via low-cost Target Date funds also has to be translated into the local alternative - in my case our SMSF invests via the Vanguard High Growth Index Fund.

Overall, I recommend this as a quick read for anyone starting out with learning about personal finance, and it is also a good 'refresher' of the fundamentals for anyone that already knows a bit about personal finance.

I'll include this book in my amazon affiliate booklist (not that I'll get any revenue from this, as its a free book), along with my other favorite books in the area of PF and investing.

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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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