Tuesday, 17 April 2018

Ten Things






Hi folks

Here are some different things to look at - hopefully it will spark some new ideas for you. It will also provide a welcome relief from my ramblings too  - ha ha!

When I surf the net (is that still a saying?), I'll usually spend some time on one of these sites.


  1. Totally loving what they are doing to old furniture at Antiquechic HERE
  2. Financial Independence FIAustralia at reddit HERE is always educational
  3. Becky's Homestead Vlog is a little corny but always a good cheery listen HERE
  4. A good compound interest calculator that I use is found HERE
  5. A bunch of great ideas on MIgardener Vlog HERE
  6. I love the old-school advice on gentlemen's clothing at Gentlemen's Gazette HERE
  7. A favourite men's blog of mine The Art Of Manliness HERE
  8. Australia's most under-utilised finance site is ASIC's MoneySmart site HERE
  9. This man and his woodwork calms my soul HERE
  10. USA readers - an astoundingly astute investing education can be found HERE by J.L. Collins

I've been super busy and will be for a while yet. It is the busy season at work as well as lots of 'matters' that need attending to on the home front too. But we're all good.

Take care folks and stay nice.

Mr HM

Tuesday, 3 April 2018

Beware Of Paper Profits





Hi folks

I hope you all had a pretty good Easter break.  On the last day of the long weekend Mrs HM and I went for a drive through the beautiful farmlands of Clarence Town, Dungog, Chichester Dam and state forest, then back home via Vacy, Paterson and Tocal - an utterly beautiful drive through lush green rolling pastures and cheery old hamlets. I love drives like this as they reset my over-wound brain.

So, what's this business about paper profits? Well, I have been seeing lots of articles and hearing lots of conversations about profits on investments - you know the type of thing .... "Yes, we bought a house last year and had it revalued after we painted and it is now worth X amount"  or  "Well, my shares have doubled in value in the last 5 years" or  "We are knocking down the old place and putting up three flats and we will triple our investment" or the most common one " the rent will cover the mortgage" (eeeek!).  These type of things are paper profits. Theory not reality. On paper only, not in the bank.

Paper profits need to be treated with a grain (or bag) of salt. Often the person pontificating or humble-bragging about the said profits is not factoring in taxes or costs nor are they factoring in labour costs or selling costs or the market or liquidity or, or, or. Often these claims of profitability are just big talk. Profit is never profit until everything is paid and settled and the money is in the bank clear and free.

Houses can be a great investment, but always factor in capital gains tax, renovation costs, advertising costs, stamp duty and fees, non-paying tenants, tenant damage, market fluctuations, buyer availability, seasonal impacts, total asset liquidity issues etc.  Shares can be great investments too, but always factor in capital gains tax, market volatility, fees and charges, trading costs, buyer and seller availability, liquidity, company leadership, market factors, political risk, legislative risk etc.

Being wise and canny about word-of-mouth advice/claims of the profitability of any given venture is a must.  Every investment has costs and risks. Those investments that claim to have no costs or risks are to be viewed skeptically.  Always do your own homework and research. Stay away from the big talkers.

Too many paper profits get talked about, printed in prospectuses, used as sales pitches, used in popular culture, chatted about and unquestionably believed.  You know you are onto a winner when you are getting a balanced list of pros and cons, profits and costs .... and preferably from someone who has already done it and is qualified to comment.


Take care folks and stay nice.

Mr HM.

P.S. The above photo is from the dashboard computer of my Suzuki Swift. Is the fabulous fuel economy on that screen to be believed?


Friday, 30 March 2018

Three Phases Of Retirement





Hi Folks,

There are three distinct phases of retirement.

1. Self-Funded
2. Access to Superannuation
3. Aged Pension

Essentially, many folk have to wait till they are eligible to receive an aged pension (in my case 67 years old) to be able to retire. This is the worst case scenario for someone with zero investments and zero or little super.  It used to be the norm, but with pension ages increasing and the worth of the pension amount so low, it is a bad choice if you can avoid it.

I'll use my own case scenario to explain the three phases.

1. Self-Funded -  I wish to retire from paid work at about 55 years old. I'll be 5 years too young to access superannuation and 12 years too young to get the aged pension.  This means I absolutely need to have investments outside of superannuation that I can draw on to provide me with an income to tide me across.

In my opinion, the wisest investments to have for this stage of retirement are investments that attract little CGT (Captial Gains Tax - simply, the tax you pay on the increased value of your investment when you cash it in) and that pay regular earnings and also are easy to liquidate. Dividend bearing shares with 100% franking credits fit this bill perfectly.

I need enough of these investments to cover my intended expenses for 5 years till I can access my superannuation in phase 2.

2. Access to Superannuation - 5 years on from phase 1, I will be 60 years old and can now access my superannuation. I would transfer my superannuation accumulation account across to a pension account and reap the benefits of zero tax on earnings and zero CGT too (if indeed this is still available in 5 years time). Back when I was working, I would have actively bought a combination of growth and dividend bearing shares inside superannuation which I can now access tax free. Also, during the 5 years that I was living off my self-funded investments in phase 1,  my superannuation would have been quietly reinvesting its earnings and increasing in value even though I was not adding to it.

I would need enough in my superannuation to see me through for another 7 years till I was eligible for the aged pension in phase three.

3. Aged Pension - By this time I will be 67 and would receive the aged pension in full if my remaining investments in superannuation and self funded investments were below legislated thresholds. I would also be eligible to earn a prescribed amount tax free from all my sources of investment outside of super too.



Camp drafting at the royal Easter showing this year.
I love watching these horse men and women camp drafting.


For some of us, retiring early is a necessity due to ill health and/or being too physically/mentally worn out to remain in paid work. For others it will be a luxury decision. For me, at 55, it will be a bit of both to be honest.

Using the above phases and concepts, you should be able to reverse engineer your own retirement date and identify the three phases and how they will work.  Yes, I know this is based on an Australian scenario, but the similarities certainly still exist across most developed countries.

Have some fun with these figures and concepts, you might just surprise yourself with what is possible!

I have not even mentioned the option of working part time or casually/seasonally during the first two phases which would potentially augment your income in both of these stages.

It's possible folks - do your homework.


Take care and stay nice.

Mr HM.

Wednesday, 28 March 2018

A Menu Planning Argument






Do you menu plan then shop or shop then menu plan? It is not a new argument, but it is worth talking about.

I believe that if you are really trying to save every penny then shopping 'specials' then planning your menu around those specials has better fiscal merit. Mrs HM disagrees however, as she feels that shopping specials, whilst noble, does not always produce a balanced or nourishing set of weekly meals - looking at all the stupid stuff 'on special' at the shops lately, she just might have a point.


Invent your own coleslaw - break the rules.


I guess it all goes back to stockpiling and making sure that we are only buying things 'on special' that we will use and like. Just because it is 'on special' does not mean it is worth buying. Less and less staples go 'on special' compared to five years ago when we were first starting our frugal journey.

How do you menu plan - pre shopping or post shopping? Or maybe something entirely different?


Making your own sauces and dressings is cheaper than
buying it on special anyway.


Take care folks and stay nice now.

Mr HM

Monday, 26 March 2018

What Fruit Is This?




Hi folks

This fruit is growing on the vine-like hedge at Mrs HM's late mum's place.

When I picked it, the sap was milky white.  I brought it inside and cut it in half and it revealed a bright pink cavity inside but no seed. It reminded me of a fig ... but not.  The vine grows very fast, nearly weed-like.

Is it edible?  What is it?  Any of our gardeners out there .... a shove in the right direction would be greatly appreciated please.

Thanks in advance.

Mr HM

Wednesday, 21 March 2018

A Puppy and Potpourri





Hi folks

Puppy? Potpourri?  Well yes, they are connected.

When Mrs HM's biological mum passed away recently she left us her pupper - Toby.  The post picture is of Toby himself. Toby was her full time companion and never left her side. It was just him and her. You can only imagine his transition to our place bustling with many people coming and going being a vast difference to his previous life - not to mention him having to also share the house with one very 'waspish' cat (Toshi) and a 'troubled' rabbit (Pan).  Toby is doing remarkably well really.  The main thing is that we just love him and he sure seems to love us too.

Potpourri?  Well, Mrs HM was wondering what to do with the lovely wreath of flowers that we had on her mum's casket - we brought the flowers home but inevitably they begun to droop. I unhelpfully suggested we dispose of them when Mr HM promptly pulled out all the roses and begun to deftly strip all the petals. Potpourri of course!  This was a lovely was to preserve the beautiful arrangement into a product that would keep for a while longer.  The petals are currently drying on a wooden tray and will be converted to potpourri as soon as they are dry and crisp.  A gentle homely way to extend the memories.

Mrs HM stripping the petals for potpourri.
These petals hold bitter sweet memories.


Mrs HM's mum would certainly approve - frugal much.


Take care folks and stay nice.

Mr HM (Phil)

Monday, 19 March 2018

Get Your Refund Now





Hi Folks - a quick alert.

Australians, if you live in NSW then be sure to see if you are eligible for a refund.

The NSW Government has reformed the compulsory third party (CTP) insurance scheme to reduce the costs of CTP Green Slips for vehicle owners and better support people injured on our roads.
If you were the registered owner of a private vehicle in NSW Australia, as at midnight 30 November 2017, you may be able to claim a CTP Green Slip refund for insurance policies bought or renewed before 1 December 2017.
Here is the link HERE
I got a $61 refund today....straight into my savings account too.

Take care folks and stay nice
Mr HM
(The photo today is of the beach next to our city - Mrs HM and I do walks here often at night just before bedtime.)


Sunday, 18 March 2018

Getting Ahead At Work





Hi folks


One of the three basics of financial success is increasing our earnings. (You can read about what the other two are in this post here)

There are many ways to get ahead at work and stand out from the crowd of opinionated mediocrity - but there is only one method that I want to talk about today.

Without beating around the bush or the like, it is simply this: -

Put your hand up willingly to do the stuff nobody else wants to do

Yep, the project that is too hard, too messy, too frightening, too boring, too whatever. Consistently putting your hand up to do what others are unwilling to do will get you noticed and will give you a measurable platform to build success on.

I have a personal mantra at work and it goes like this - "eat your veggies first".  In other words, always do the ugly/hard stuff first and all the fun stuff afterwards. By habitually doing this, it will stand you in good stead to easily take on that ugly project (or whatever) that no one else wants to do.

By being disciplined to do the tough stuff first and by putting your hand up to do what others will not do, the following benefits WILL come your way:
  •   You'll learn how to tackle challenges
  •   You'll learn how to get results despite the hurdles
  •   You'll learn determination and stickability
  •   You'll achieve what others do not (because they did not want the task)
  •   You'll widen your network (solving problems always means collaborating for answers)
  •   You'll learn more about your business
  •   You'll learn things about yourself (self awareness is priceless in the workplace)
  •   You'll gain the reputation of getting things done
  •   You'll open your mind for other possibilities
  •   You'll grow your confidence exponentially
  •   You'll taste success

All the above creates professional wisdom which is a valuable commodity - it also has a currency.

I have personally tripled my income step by step by consistently using the above simple principle.  
Folks, if I can do this, you can too.


Take care folks and stay nice.

Mr HM (Phil)

Saturday, 17 March 2018

Food Pictures from Mr Home Maker's Place



A delicious cheesy chicken, cauliflower and broccoli bake.

.
Carved roast  lamb piping hot from the oven


Home made pan gravy and butter-fried white sweet potato
along with hot beans glazed with honey


Creamy curry chicken with brown rice and a garden salad.


Oven dry-baked potatoes.
Awaiting a knob of butter  or sour cream


Home made mint jelly from scratch.
We were being overrun with mint in the garden!

Did I mention that our biggest budget saving comes from cooking from scratch and eating at home? 

Literally  $1000's better off every year. True story.



Take care and stay nice folks.

Mr HM

Sunday, 11 March 2018

Investment Bonds - The Forgotten Retirement Fund






Hi folks

You all know my conspiracy theories on retirement Superannuation and how I am getting the best out of my Super despite it's inherent problems, however, I have not chatted to you about Investment Bonds yet.

Investment Bonds have taken a back seat as a legitimate form of investment with the rise of superannuation and folk's love of direct share and property investing. However Investment bonds are now making a comeback since Australian Superannuation laws have continued to change for the worse.


Slow baked sweet potato. 



What are Investment Bonds?

They are not the low earning cash bonds you can trade on the stock market - these are actually insurance policies that invest directly into a variety of equity (share) investments. Investment bonds combine the features of a managed fund with the benefits of a life insurance policy. Here is an excellent write-up on investment bonds by ASIC HERE.


What are the benefits of Investment Bonds?

Due to these investments being held under the structure of an insurance policy, the following benefits are available to the holder of investment bonds in Australia.


  •   Investment bonds are tax paid (30% company tax).
  •   Zero personal tax is payable once you have held the bonds for 10 years 
  •   If you do need to withdraw funds in under 10 years you still get a 30% tax rebate on the taxable portion of the amount withdrawn.
  •   Investment bonds can be pre-bequeathed outside of an estate.
  •   Highly tax effective outside of Superannuation. 
  •   Can be accessed at any age or stage of life.
  •   No need to ever declare the earnings of investment bonds for taxation purposes (unless you withdraw in the first 10 years).
  •   Can start with as low as $1000 initial investment and then Bpay/EFT/Direct Debit as little as $100 a time for no fee.
  •   Can swap investments for fee.
  •   No limits on initial investment amount or subsequent amounts in the first year of investment.
  •   Can invest 125% of the previous year's investment year on year and still have full tax benefit.
  •   Tax effective investment for children from the age of 10.
  •   Tax effective for early retirement before being able to access preserved superannuation
  •   A variety of investments and funds available including Vanguard and iShares products (depending on the bond provider).
  •   Fees comparable to Superannuation products (always scrutinise this however)

A delicious home cooked lamb roast.
Even the mint jelly is home made.



Here is a link to a couple of high-level articles HERE and HERE to get you started on researching investment bonds.

There are many providers of investment bonds in Australia the largest being Australian Unity . As part of your research, always-always-always read the PDS thoroughly, be fully aware of all fee structures and also be aware of the return and quality of the investment products being offered by each bond provider. Australian Unity's PDS is well written and highly educational  - I suggest you start your first PDS research with that one HERE. (No, Australian Unity are not paying me in any way!)

The reason I personally like investment bonds is that I can access these well before I can access my Superannuation and they have slightly better tax benefits than even fully franked dividend shares and after 10 years any of my earnings are tax free including GST (..... pokes tongue out at my Superannuation and makes an immature face). Investment bonds are also infinitely easier to deal with come tax time every year - no tracking of share parcel purchases, dividends, franking credit claims etc etc.  Once retired you can organise a regular withdrawal plan for free too - and all tax free after 10 years (..... blows a childish 'rasberry' at Superannuation pension administration fees this time)

Now I am not a financial adviser but I think Australian investment bonds are truly worthwhile your time researching as a highly flexible and tax effective alternative or supplement to Superannuation. Many articles say that investment bonds are good tax havens for the rich (very true) but they are also excellent for low income earners, early retirees, those transitioning to retirement before preservation age and many other personal circumstances too. 


Take care folks and stay nice.

Mr HM (Phil)


Here is a lovely picture of  Mrs HM's mum and Toby-the-dog
a few days before she passed.
Toby lives with us now.






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