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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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