Tuesday 17 October 2023

Australian Superannuation Averages 2023

QSuper has an interesting webpage providing details of the average superannuation balance for various age ranges for Australian Males and Females, along with a calculation of the approximate amount a person should have in superannuation now to reach the Association of Super Funds of Australia (ASFA) 'comfortable standard' balance by the time you turn 67.

For interest I plotted these figures together with the actual current superannuation balances of DS1, DS2, DW and myself to see how we compare. DS1 is tracking very well due to a combination of having had a child superannuation account to provide a solid foundation, and his current income being quite good for a recent university graduate. DS2 has just started his HSC (final) year at high school, and his child superannuation account is quite modest, but should provide a solid foundation for his future retirement savings. Especially if he makes an annual $1K contribution and benefits from the government co-contribution of $500 each year while still studying. DW is just under the calculated sum required for her age to be on track for a 'comfortable retirement' at age 67. I doubt that she will continue working until age 67 though. My super is more than adequate for my retirement needs - I mostly add to superannuation as a tax effective investment vehicle, rather than to boost my income during retirement. I have stopped making additional salary sacrifice contributions as I need the cashflow to fund my investment property investment, but earnings and SGL contributions should be sufficient to hit the transfer balance cap by age 65 when I can transfer my superannuation balance (up to the TBC) into 'pension phase' while still working full time. Transfer to 'pension phase' will reduce the tax rate applied to my superannuation earnings and realized capital gains from 15%/10% to 0%. Once I hit the TBC any further superannuation SGL contributions will remain in accumulation phase, which is still a tax effective environment for balances up to $3MM.

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Tuesday 3 October 2023

Long, long term real estate investment prospects

Browsing through Moomin's blogroll, a post from Climateer Investing to a Nature article about the next supercontinent caught my eye. Looks like my home and investments properties in NSW will still be prime real estate in 250 million years, as this is one of the more temperature zones projected to exist in the future supercontinent ;) (And my properties may closer to 'absolute water front' within 1,000 years if the Antarctic ice sheet melts away faster than expected causing sea levels to rise by up to 65m - but although the floating Antarctic ice sheets might melt within 500 years, the 1.9km thick icecap on the continent would take a lot longer to melt away, even if temperatures rose significantly above zero in Antarctica).

I am a long term investor, and even contemplate wealth transfers and family trust structures that could last hundreds of years, but looking 250 million years ahead seems silly even to me.

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Monday 2 October 2023

Net Worth - SEP 2023

Chart updated to end of September in sidebar.

Stocks/cash increased $784 (+0.37%) to $211,211. This was unexpected given the generally terrible month for the stack markets (Dow Jones down -3.27%, S&P 500 down -4.64%, All Ords down -3.86%). So I can only attribute this to my brilliant trading/stock picking (or sheer dumb luck).

Retirement savings (SMSF etc) decreased by -$66,709 (-4.20%) to $1,522,844 in line with the market trend and our asset allocation. We have about $77K sitting in cash (ANZ V2 savings account), so we might add this to our investment in Vanguard High Growth Fund once the transition from retail fund to online ETF investment is completed later in October.

Est. of Home valuation (my half) increased by $6,374 (0.61%) to $1,054,479. 'Other real estate' (my 'lake house' and the investment apartment) also increased over the past month by $17,854 (0.87%) to $2,078,388.

The outstanding balance of the investment property mortgage remains at $999.993 during the 'interest only' period of the mortgage. I have about $131K sitting in the loan offset account (which is included in the stocks/cash figure), which helps reduce the monthly interest charged.

Other assets (my online depository bullion account at  Perth Mint, and the bullion value of my gold and silver proof coin collection) decreased by -$1,641 (-4.43%) to $35,426.

Overall, NW decreased by -$43,338 (-1.10%) to $3,902,355 during September. Looks like I won't become a quadrillionaire this year.

The tenants of my investment apartment paid 4 weeks rent during September, but as a lump sum at the end of the month (in arrears), rather than weekly in advance (as required by their lease agreement). So the managing agent lodged the NCAT lease termination application with the NSW Civil and Administrative Tribunal.

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Sunday 1 October 2023

Rental Investment Property update

The managing agent submitted the NCAT (lease termination application) form (costing me $60) last week, as the tenants had still not been paying their rent weekly in advance as per the lease agreement. It wasn't quite as bad as I had thought though, as they had paid four weeks rent in one lump sum last week. So they are currently only one week in arrears, but not complying with the terms of the lease. We'll see what the tribunal determines - if they agree to start paying the rent each week and catch up on any rent that is owing over a reasonable period of time, the tribunal is likely to not terminate the lease. Hopefully the proceedings might encourage the tenants to start paying their rent weekly, as my biggest concern would be if they vacated the property without notice and were owing a month or more of rent in arrears. The two week rental bond is meant to cover any damages beyond normal 'wear and tear', and isn't sufficient to cover a substantial amount of unpaid rent. Then again, my landlord insurance does (theoretically) provide some cover for unpaid rent, but making an insurance claim is bound to be time consuming and tedious.

If the lease was terminated the managing agent would charge me another one week of rent as a fee for finding new tenants, plus any advertising costs. So it would be best from my POV if the tenants simply start paying their rent on time.

ps. After chasing up the local and international payroll/HR departments of the company I work for, they finally processed the PAYG tax variation approval from the ATO. So I will now have slightly more after-tax 'take home' pay each fortnight rather than having to wait until lodging the annual tax return to get a large tax refund. This is good, as the extra income can sit in my mortgage offset account at an effective pre-tax interest rate of 6.29%, rather than have the ATO holding onto my tax instalments for more than a year (and not paying any interest) before providing a tax refund.

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12% solution 'superhero' portfolio and 'moomoo' trading account - end SEP 2023 update

The "12% solution"" recommendation email from David Alan Carter for the end of September was for

60% SHY (or cash) + 40% JNK (or SHY or cash)

So I will liquidate the 12% solution portfolio holdings when the US market opens and move to cash for this month.

David Alan Carter's monthly "12% solution" update email reported the YTD performance for 2023 so far as being +16.1%.

Overall my 'superhero' trading account was down during September - from $2,162.41 to $2,056.81

My other 'moomoo' trading app account (where I try to read the entrails of technical charts to make profitable 'long' positions on the index trading VAS ETF) managed to be slightly up during September despite VAS and the markets being down - from $5,179.63 to $5,200.38. This month the movement was entirely due to my trading performance. My overall trading result is now a 43% win:loss ratio, with four stop-loss trades losing an average of $61.53 per trade, and three take-profit trades gaining an average of $84.87 each. The win:loss ratio is still quite good (but still way too early to draw any conclusions), and the average realized losses moved closer to the planned (-$50) target, and the winning trades getting closer to the planned ($100) target. 

Compared to the 'benchmark' of the S&P500 index my 'trading' was quite successful during September. My overall yield is +2.03% while the S&P 500 during the same period is -6.41%. The 'plan' is to open a long position when the market seems to be in the early stages of an upward trend, and take a profit (or roll-over the position and reset stop-loss and take-profit alert settings if the trend is holding) when the price target is reached, or close out when the stop-loss is reached. Setting the take-profit to be a 1% gain while the stop-loss is set at a -0.5% loss, should result in profitable trading *if* I have winning trades close to 50% of the time. Of course, the take-profit trigger being twice the stop-loss trigger as a percentage change means that the stop-loss would be triggered more often than the take=profit trigger, if my reading of the trading entrails doesn't avoid opening positions when the market is about to start dropping. We'll see how things play out over coming months.

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