An article in the SMH reported that although the number of people in the USA losing money to internet scams had gone down last year, the total amount being lost had increased to $US239.09 million (up 20.5% from 2006). That is, while people in general were getting more savvy about internet fraud, those that were taken in were being taken for larger amounts.
"We're seeing more schemes involving bigger ticket items, get-rich-quick and work-at-home schemes that involve higher dollar losses," FBI special agent John Hambrick, who is in charge of the FBI's Internet Crime Complaint Center (IC3). The bottom line, as always, is caveat emptor.
Copyright Enough Wealth 2007
Sunday, 6 April 2008
Alternative/Passive Income Week
Last week was a good one for 'passive' income. A cheque from Primary Healthcare arrived for the takeover of my Symbion shares ($11,664) and the half-yearly dividend payment season was in full swing, so I received $4,298.71 by direct deposit into my credit union savings account:
However I don't count this as disposable income as it all needs to be reinvested (the takeover payment) or used towards the interest payments on my margin loans (the dividends).
Copyright Enough Wealth 2008
26/03/2008 LLC $ 206.83
26/03/2008 QBE $ 394.55
28/03/2008 APA $ 12.76
28/03/2008 APA $ 679.33
31/03/2008 AEO $ 56.20
31/03/2008 WPL $ 121.00
01/04/2008 SYM $ 144.00
01/04/2008 BSL $ 171.82
01/04/2008 SUN $ 500.76
01/04/2008 BBI $ 4.62
01/04/2008 BBI $ 9.82
02/04/2008 FGL $ 450.12
02/04/2008 CBA $ 146.90
04/04/2008 TLS $1,120.00
04/04/2008 TLS $ 280.00
However I don't count this as disposable income as it all needs to be reinvested (the takeover payment) or used towards the interest payments on my margin loans (the dividends).
Copyright Enough Wealth 2008
Saturday, 5 April 2008
Review of Select-Credit-Card.com
This website provides some useful information about credit cards - such as an information centre that provides articles about recent innovations in the credit card arena. A recent article discusses the pros and cons of so-called "green" credit cards from Bank of America and Wells Fargo. The article discusses how rewards points on these cards can be used to purchase carbon dioxide offsets or support projects aimed at developing renewable energy sources. On the downside the article reveals that these cards tend to have higher interest rates than other types of credit cards, but may still be attractive to customers that are concerned enough about the environment so pay extra for an environmentally-friendly card that encourages signing up for paperless credit card payments.
There's an interesting article on the site that discusses the benefits of cards with no annual fee and low interest rates for mature age customers (who tend to pay off their balances in full and use their cards sparingly). Another article discusses the option of using a debit card if you can't qualify (or don't want) a credit card, and how the debit card can help you learn the basics of credit card management. The article also points out the potential pitfall of accruing overdraft charges if you make a mistake and exceed the available funds in your debit account.
So, if you're looking for easy to access information about Credit card innovations you should browse through some of the articles on this site.
Copyright Enough Wealth 2007
There's an interesting article on the site that discusses the benefits of cards with no annual fee and low interest rates for mature age customers (who tend to pay off their balances in full and use their cards sparingly). Another article discusses the option of using a debit card if you can't qualify (or don't want) a credit card, and how the debit card can help you learn the basics of credit card management. The article also points out the potential pitfall of accruing overdraft charges if you make a mistake and exceed the available funds in your debit account.
So, if you're looking for easy to access information about Credit card innovations you should browse through some of the articles on this site.
Copyright Enough Wealth 2007
Tuesday, 1 April 2008
Net Worth Update March 2008
March was looking really bad by the middle of the month, with my daily net worth estimate dropping below the $1m mark on the 17th and 18th. At the low point ($994,777) my net worth was down 6.60% compared to the end of February (even with a slight gain from my real estate valuations which are updated on the 1st of each month). But the stock market rally last week salvaged the situation and I ended the month down "only" -$19,167 (-1.80%) for the month, to $1,044,608.
The final result was due mostly to further losses in my geared equity investments (still down -$24,176 or -8.15% after the recent "bounce"), which were only partially offset by yet another good month for Sydney property valuations (at least for the northern suburbs) -- my share of our property valuations was up $11,534 (1.39%) to $842,978 while my share of the mortgage loan balance only rose $850 to $366,540 (0.23%) as we were able to fund part of our loan repayments using our tax refunds rather than the usual monthly "redraw" of some of our advance payment balance. Preliminary data for March shows that the property component of my portfolio will show a slight gain this month, but the amount could easily be offset by one bad day in the stock market given the current levels of volatility.
The $50,000 I invested in the Colonial FirstState Geared Share Fund on the 7th of March had shown a small profit by the end of the month, although I missed the March low point by a week (I've no idea if the March lows will eventually turn out to be the low of this bear market). This is small beer compared to the situation I'd be in if I'd still had the Index Put Options in place that I bought early last year, but which expired value-less in early December.
The balance of my retirement account gave back the gains of last month, dropping by -1.88% to $295,784. The decrease would have been even larger if not for my monthly retirement contribution (around $4,200). My retirement account balance is down 13.5% from it's peak last year, despite the large monthly contributions I've been making since last July via "salary sacrifice". The only bright spot is that this means my salary sacrifice contributions have been purchasing investment units (in the Vanguard High Growth Index Fund) at lower prices, which should be beneficial in the long term (fingers crossed). It hardly compares to the position I'd now be in if I'd simply stayed invested in cash since we moved our retirement accounts into our Self-Managed Superannuation Fund last June. Looking back there was no urgent need to reinvest my superannuation balance immediately into equities, given the exceptional performance of equities in recent years, the uncertainty about the impact of the sub-prime lending crisis (at that time), and the consensus view that equity returns would be modest in 2008. Short-term cash deposits in online savings accounts are currently paying around 8%pa, which is looking very attractive in the current environment. However I don't intend to alter my long-term asset allocation. No good closing the barn door after the horse has bolted!
We're now 25% through 2008 and there seems no way I can possibly achieve my initial goal of increasing my net worth by $150,000 (13%) in 2008. From my current position I'd have to gain around $244,000 (23.35%) over the next 9 months, or around 31% annualised!
My revised target is to reach $1.15m by the end of 2008 - this would be the same point I was at in May 2007, and still 4% below my all-time high achieved on 1 Nov 2007. I give this a 35% probability. However, I wouldn't be surprised to find my net worth dropping even lower sometime during 2008 (50% probability), in which case my net worth may not rise at all by the end of this year. I can only hope that we won't see a repeat of the 1970's, in which case I could find my net worth stagnating well into the next decade (10% chance).
Of course the real "worst case scenario" (<5% chance) would be a Great Depression II (possibly followed by WWIII). I'd give this scenario very, very low probability (1%?) - but people generally tend to completely discount high-impact, low probability risk events (such as earthquakes, tsunamis) unless they've happened recently. "What-ifs" such as a SARS pandemic around the time of the Beijing Olympics, or a hot war between the US and Iran, are possible, but not highly probably. It's much more likely that the global economy will weather the current storm, and we'll return to long-run average asset performance over the coming years.
Copyright Enough Wealth 2008
The final result was due mostly to further losses in my geared equity investments (still down -$24,176 or -8.15% after the recent "bounce"), which were only partially offset by yet another good month for Sydney property valuations (at least for the northern suburbs) -- my share of our property valuations was up $11,534 (1.39%) to $842,978 while my share of the mortgage loan balance only rose $850 to $366,540 (0.23%) as we were able to fund part of our loan repayments using our tax refunds rather than the usual monthly "redraw" of some of our advance payment balance. Preliminary data for March shows that the property component of my portfolio will show a slight gain this month, but the amount could easily be offset by one bad day in the stock market given the current levels of volatility.
The $50,000 I invested in the Colonial FirstState Geared Share Fund on the 7th of March had shown a small profit by the end of the month, although I missed the March low point by a week (I've no idea if the March lows will eventually turn out to be the low of this bear market). This is small beer compared to the situation I'd be in if I'd still had the Index Put Options in place that I bought early last year, but which expired value-less in early December.
The balance of my retirement account gave back the gains of last month, dropping by -1.88% to $295,784. The decrease would have been even larger if not for my monthly retirement contribution (around $4,200). My retirement account balance is down 13.5% from it's peak last year, despite the large monthly contributions I've been making since last July via "salary sacrifice". The only bright spot is that this means my salary sacrifice contributions have been purchasing investment units (in the Vanguard High Growth Index Fund) at lower prices, which should be beneficial in the long term (fingers crossed). It hardly compares to the position I'd now be in if I'd simply stayed invested in cash since we moved our retirement accounts into our Self-Managed Superannuation Fund last June. Looking back there was no urgent need to reinvest my superannuation balance immediately into equities, given the exceptional performance of equities in recent years, the uncertainty about the impact of the sub-prime lending crisis (at that time), and the consensus view that equity returns would be modest in 2008. Short-term cash deposits in online savings accounts are currently paying around 8%pa, which is looking very attractive in the current environment. However I don't intend to alter my long-term asset allocation. No good closing the barn door after the horse has bolted!
We're now 25% through 2008 and there seems no way I can possibly achieve my initial goal of increasing my net worth by $150,000 (13%) in 2008. From my current position I'd have to gain around $244,000 (23.35%) over the next 9 months, or around 31% annualised!
My revised target is to reach $1.15m by the end of 2008 - this would be the same point I was at in May 2007, and still 4% below my all-time high achieved on 1 Nov 2007. I give this a 35% probability. However, I wouldn't be surprised to find my net worth dropping even lower sometime during 2008 (50% probability), in which case my net worth may not rise at all by the end of this year. I can only hope that we won't see a repeat of the 1970's, in which case I could find my net worth stagnating well into the next decade (10% chance).
Of course the real "worst case scenario" (<5% chance) would be a Great Depression II (possibly followed by WWIII). I'd give this scenario very, very low probability (1%?) - but people generally tend to completely discount high-impact, low probability risk events (such as earthquakes, tsunamis) unless they've happened recently. "What-ifs" such as a SARS pandemic around the time of the Beijing Olympics, or a hot war between the US and Iran, are possible, but not highly probably. It's much more likely that the global economy will weather the current storm, and we'll return to long-run average asset performance over the coming years.
Copyright Enough Wealth 2008
Subscribe to:
Posts (Atom)