Tuesday, 21 November 2017

Starting Over At Any Age





Hi Folks

Plenty of folk have to start over again for many and varied reasons and the older they are the harder it is - some just give up and sink into the quicksands of poverty.

The younger we are when we have to start over, the easier it is - time is on our side if we are younger. However, starting over older means we have lots of life experience and can be ruthless about our needs and wants based on real life wisdom.


I just had to add another food photo - we eat very well at our house.


So let's not muck around - here are the best budgets (IMHO) for starting over by age. The percentages quoted are those of our NET income.


If you are starting over in your 20's - here's your budget:

 1. 20% Extra Debt Payments 
 2. 60% All living expenses and commitments 
 3. 10% Emergency Fund
 4. 10% Spend on whatever you want

Once all debt is paid, then revert to this version of the budget

 1. 20% Invest in low cost index ETF's
 2. 60% All living expenses and commitments 
 3. 10% Big spend items
 4. 10% Spend on whatever you want



If you are starting over in your 30's -  here's your budget:

 1. 30% Extra Debt Payments 
 2. 55% All living expenses and commitments 
 3. 7.5% Emergency Fund
 4. 7.5% Spend on whatever you want

Once all debt is paid, then revert to this version of the budget

 1. 30% Invest in low cost index ETF's
 2. 55% All living expenses and commitments 
 3. 7.5% Big spend items
 4. 7.5% Spend on whatever you want



If you are starting over in your 40's  - here's your budget:

 1. 40% Extra Debt Payments 
 2. 50% All living expenses and commitments 
 3. 5% Emergency Fund
 4. 5% Spend on whatever you want

Once all debt is paid, then revert to this version of the budget

 1. 40% Invest in low cost index ETF's
 2. 50% All living expenses and commitments 
 3. 5% Big spend items
 4. 5% Spend on whatever you want



If you are starting over in your 50's or older - here's your budget:

 1. 50% Extra Debt Payments 
 2. 40% All living expenses and commitments 
 3. 5% Emergency Fund
 4. 5% Spend on whatever you want

Once all debt is paid, then revert to this version of the budget

 1. 50% Invest in low cost index ETF's
 2. 40% All living expenses and commitments 
 3. 5% Big spend items
 4. 5% Spend on whatever you want




Roses - a simple delight


Some of us will look at this, snort, roll our eyes and say it is impossible.  It is not impossible.  In fact there are a whole community of folk world-wide living happily and meaningfully on budgets just like these - go find them and be encouraged.

The longer we stay in injury time-out mode, the longer and harder it will be to start over. Release the past without judgement, wish it well, smile, shoulders back and then take action. You're in good company.

Do it now - talk about it later.


Take care folks and stay nice.

Mr HM (Phil)

Worthwhile Money Reads





Hi Folks

Here are some sites and blogs that I read regularly in regards to financial matters.  All of them are very focused on educating the reader on all things financial, be it saving those pennies right through to investing wisely. Whilst the details may not be specific to your home country, the principles are globally true and utterly relevant - enjoy.


Our Christmas tree went up last night - feeling happy.


In no particular order (just click on the heading)

The Mad Fientist

Strong Money Australia

The Barefoot Investor

Mr Money Mustache

The Simple Path To Wealth (I'm currently re-reading his excellent Stock Series)

Aussie Firebug

All About Balance

Think Save Retire . com


My new glasses - 1940's style (my favourite era)


The beauty of all these writers is that they are DOING what they are writing about.  They all generously share the bulk of their content freely and engage enthusiastically with their readers.

Enjoy!


Take care folks and stay nice

Mr HM (Phil)

Monday, 20 November 2017

Bubble 'n Squeak





Hi folks

I just love bubble and squeak made from left-overs from the previous night's lamb roast.  All those lovely leftover baked veggies and scraps of lamb all fried up together make the perfect breakfast. So, we were shopping in Aldi the other day and lo-and-behold ..... pre-packaged bubble and squeak for $3 something per packet!  What the?!

Bubble and squeak is one of the epitomes of frugal living at its finest and now it has been commercialised. Fancy that.  I'm not surprised really I guess. We are now expected to pay for prepackaged leftovers! The world is mad.

So in the spirit of spreading a better message, here are some food photos that have been cooked from scratch at our place lately - you know how I love food photos.


Fried southern chicken with peach salad

Waldorf salad

Crispy skin salmon, chicken skewer, quinoa salad
and asparagus. 


Cooking from scratch not only saves huge dollars out of the budget, it is also a act of love and care for those for whom we cook.


Take care folks and stay nice.

Mr HM


Saturday, 4 November 2017

An Elegantly Simple Investment Plan (Australia)





Hi folks

I have received a lot of comments and have also received plenty of emails enthusing about my investment musings here on Mr Home Maker. However, many of these comments and emails also express fear and paralysis about actually investing (AKA doing it as opposed to just talking about it!).

Again, I am not a financial adviser and the information I share now is purely for your encouragement in becoming more fiscally responsible. Absolutely do your own research and analysis please.


A Simple Elegant Investment Plan for Australians


  •   50% invested in old Australian Licensed Investment Companies like Argo and/or AFIC.
  •   50% invested in Vanguard MSCI Index International Shares ETF (VGS).

That's it folks - as simple and elegant as that. Uh huh.




Happy to answer any questions on why etc in the comments below for everyone's mutual benefit.


Take care folks and stay nice.

Mr HM (Phil)


Wednesday, 1 November 2017

Who's Behind These Products?






Hi folks!

Do you like the home made Arancini balls in the picture above? With a little patience, anything can be cooked from scratch at a fraction of the broughten price.

So anyway, here is a bit of a quiz:

Question: What do all the things on this list below have in common?


FaceBook
Ben and Jerrys (icecream)
H&R Block (tax agents)
Calvin Klein
Westfield shopping centres
Max Factor cosmetics
Goldman Sachs
SlimFast
TED talks
Valium 
Many generic pharmacy prescriptions
SodaStream
Stanley Black & Decker (power tools)
Dreamworks (movies)
Sandisk (usb memory sticks)
Max Brenner Chocolate
Power Ranger (action man toys)
Pentium and Celeron (computers)
Disney Company
Estée Lauder
Ralph Lauren
World Trade Centre (Sept 11)
Q-tips (cotton buds)
Levi (jeans)
Google
RSS (web feed)
20th Century Fox (movies)
Carnival Cruise Liners 
Hyatt Hotel
Four Seasons (resorts and hotels)
Cosco
U-Haul (removal rentals)
Jim Beam (whisky)
Visyboard (cardboard products)
Meriton (hotels/suites)
Bagels (as in bread)


Answer: They're Jewish ....owned and/or founded and/or invented.


A lovely fruit and homemade
 yoghurt breakfast


  Interestingly, the very fact that you probably will not be able to knowingly match a single Jewish name to any one of these things reveals another interesting Jewish wealth principle viz. that Jewish folk promote their product to society not themselves. Of course there are exceptions when the product is themselves e.g. Jewish actors (the list is too long to write here!)

Jews believe in the morality of business. They believe in offering a service or goods to wider society as an act of being able to genuinely fulfill the needs of society. A product well placed in the lives of others is something to be proud of.....and the money earned are just notes of appreciation for the product from those who needed it.


My office....the kitchen table


Incidentally, the list above is rather small (I was just thinking of things Australians would know) - our USA and UK readers would be able to add another 100 products to this list easily.

Take care and stay nice!

Mr HM (Phil)

Saturday, 28 October 2017

Simultaneously Frugal and Extravagant




Simultaneously Frugal and Extravagant? What on earth is Mr HM on about?!  Well, what I'm 'on about' is another Jewish wealth principle.

It is not unusual to hear Jewish folk going off about the price of petrol, how much coffee is, how on earth they are going to afford this that or the other ..... whilst the Mercedes is quietly sitting in the driveway and the gardener is pruning the roses.  It sounds hypocritical and fake, however it is not. You see, Jewish folks understand that wealth has a purpose and that it is not an end in itself. Being generally frugal allows spending on other things that are important to them. Jewish folk will scrimp and save on a whole myriad of things whilst simultaneously funding some really big ticket items.

The Jewish family who invests several million dollars/pounds into a local hospital will probably be also drinking no-name tea and coffee, shopping at Aldi and snipping coupons. Our said Mercedes-driving Jewish neighbours will also be getting their shoes repaired, cooking all their meals from scratch, wearing the same outfits from season to season and still using fly swats (because Mortein costs money and fly swats are essentially free!!).

Quintessentially, Jewish folk spend money on what they value. Their values are well balanced across family, synagogue, community and country.  Their children will get a lavish education whilst sharing a bedroom with siblings. The synagogue will get a fat subscription every year whilst the family takes a packed lunch daily. Their local community will have this Jewish family as a known financial benefactor of many good causes, whilst also being known to bargain with the butcher over the price of Friday chicken. The same Jewish family and their brothers, aunts, uncles, parents, cousins....(there is never just one of them!).... will also have their names on those plaques you see on Universities, hospitals, schools, galleries and the like, as being major investors and/or patrons. You'll also see these exact same folk buying specials in bulk too.

Jewish folks spend up big on things that are important to them or things that represent quality. They will also purposely spend as little as possible on absolutely everything else. There is the lesson right there.

Take care folks and stay nice.

Mr HM

Tuesday, 24 October 2017

Suspicious of Superannuation





No doubt ...... no doubt ....... the Australian Superannuation system has some terrific tax benefits both during accumulation phase and also during pension phase.  The ability to salary sacrifice at only 15% tax during accumulation stage is wonderful as is the tax free earnings, tax free dividends and tax free capital gains events during the pension phase.

However, I'm still suspicious of placing all my eggs into this government regulated Superannuation system. Now, I am no finance man, I have no qualifications in this regard, so my following thoughts can only be fairly classified as a conspiracy theory - nevertheless, I see what I see.

Consider the following with regards to Superannuation:

1. Constantly changing rules and many layers of complexity
2. Your money is not truly accessible tax free before retirement preservation age.
3. Retirement age is getting older by law - (mine is now 67 !!)
4. No ability to access your money before preservation age (60 for me) without a huge tax bill
5. Most Superannuation funds have huge fees - as bad as most fat managed funds in many cases
6. Default Super options (the one that you automatically get if you do not choose) is usually a balanced fund with significant fees.
7. Very difficult to see where your funds are invested beside vague labels like "Australian Shares" etc
8. Not everyone can choose a fund of their liking depending on their employer.
9. Fees are often hard to understand and can be recorded (hidden!) in several scattered places across PDS's (Product Disclosure Statement).
10. Administration fees during retirement or pension phase are often many times greater than when in accumulation phase.
11. Life insurance within Superannuation can be very tricky to access in a variety of scenarios and can sometimes be taxed.
12. Transition to retirement (TTR) tax rules have recently been introduced into Superannuation which do not benefit the retiree.
13. Maximum limits on pension phase accounts have been introduced and changed recently.
14. Before and after tax contribution limits have been changed for the worse too.
15. Thresholds have changed and many pensioners have had their aged pensions drastically reduced simply because they were good savers and used Superannuation the way they were historically told to. A nice reward for doing the right thing - not!
16. What future changes will the government make to Superannuation? It is a complete unknown. Therefore is my money predictably a proper investment in Superannuation?
17. Will Superannuation taxation structures and rules change?  If so, this could completely compromise your retirement plans.
18. Cyber risk to Superannuation funds is a hush-hush topic
19. How will future legislation impact on Superannuation? Given the long list of legislative changes directly impacting Superannuation over the years, it is reasonable to assume that this trend will not change.
20. The younger you are, the less appealing Superannuation is as legislative changes across the next 30 or 40 years could massively change the intention and viability of Superannuation in much the same way as the aged pension has gone from being a wonderful innovation generations ago, to now being a pittance that is mockingly referred to by many as a charitable or social security payment.
21. I challenge you to easily read and understand your superannuation yearly statement (!)


Look, in Australia our employers are obliged to contribute 9.5% of our gross salaries into a Superannuation fund for us. We have zero say in this. So my approach is that I have chosen not to add any extra than this obligatory 9.5% because we plan to retire from our current paid work before our preservation ages and thus we will need plenty of funds invested and accessible outside of Superannuation for this purpose.

So because I have to get the best out of my obligatory Superannuation account, I have therefore researched scores of Superannuation PDS's (product disclosure statements - gosh they are so freaking boring) and have chosen a Superannuation fund that offers a Balanced Index Fund charging only 0.02% fees plus a $78 yearly admin fee. This Superannuation fund also offers a very low cost self-managed investment platform where I can choose a reasonably good selection of ETF's, LIC's, individual stocks, bonds and term deposits to invest into directly.  The proviso is that only 80% of my funds can be invested via the self-managed platform and the other 20% needs to be in the Indexed Balanced Fund option - but that is OK.  The other pleasing (and rare) thing about this Superannuation fund is that once I am allowed to retire and change my accumulation account across to a pension account, they will allow me to transfer all my stock holdings across to my pension account as a once-of transaction without the need to sell all my holdings which would normally trigger a massive capital gains tax event - this is pretty good.

However, outside of Superannuation we will continue to stick to our personal budget to invest 20% of our net incomes into tax efficient investments (namely investments that are 100% franked). Fortuitously, under Australian law, the company tax of 30% paid by the company on its 100% franked dividends does not need to be double taxed by the owner of the shares and thus can be used as an efficient tax claim at tax time each year.   e.g. for low income earners, they will get a tax rebate on their 100% franked dividends and for high income earners they will only need to pay the difference between the 30% tax already paid on their dividends and their particular tax bracket. Australian shares also generally pay slightly better dividend percentages than international stocks. Because of the lower immediate tax advantages but higher growth trends of international stocks (USA, Europe, Asia etc) I use my Superannuation to buy international growth ETF's and stocks thus taking advantage of the generous tax rules within Superannuation to diversify my holdings outside of the tiny Australian stock market whilst my ex-Superannuation investments are all Australian investments specifically geared to be tax friendly.

When we eventually decide to pull the ribbon out of our typewriters for the last time, we will first use our investments made outside of Superannuation as an income stream to tide us over the decade or more before we are allowed by the government to access our Superannuation funds.

Anyway, make sure you thoroughly check everything I have said because I am not a qualified finance person and may well have got it all badly wrong ..... (but I doubt it). I am only sharing this information for the purposes of encouragement and open, honest discussion about the often taboo subject of money and investments - this post is obviously not qualified financial advice. Always do your own homework.

Take care folks and stay nice.

Mr HM (Phil)

Sunday, 22 October 2017

Mr and Mrs Home Maker's Weekend



Mr and Mrs HM out at a country fundraising pig race.



Hi Folks

Just a quick picture post on this rainy Sunday evening of a couple of things we got up to over the last couple of days - enjoy


Sometimes dinner is just a plate of great cheese.
Saves a whole lot of washing up and is pretty fabulous

Home made hot stewed apple

My lovely girls bought me an exquisite
pocket watch for my 50th birthday. I wear
it to work every day now connected by a chain
across my waistcoat.
 (I love 1940's men's clothes in case you wondered)

The piglets at the Westpac Rescue Helicopter fundraising
pig race at Denman NSW. They were super cute and ran real fast!

Our cute little red Suzuki petrol miser hanging out with the big
country petrol guzzler boys  at Merriwa NSW
 (....we were in the bakery!)

The wonderful B&B we stay at when we go to Merriwa.
Pam and Peter at B&BonBettington are the cheeriest folk I know
and the place is spotless, decorated in old world style and you
get a hearty cooked breakfast and a great chat before heading off.
We have our cuppa out on the balcony through those French doors.

Mrs HM doing the meat prep for the week. It all gets cut up
and packed....

.....into meal-sized portions before being popped into the
$50 freezer that just keeps on going (!)

I found myself a pair of good quality
plum coloured jeans reduced from $70
to $4.99 exactly my size. Frugal much!

A beautiful Italian quill pen and ink - a 50th birthday
present from my wonderful friends Kathy and David.
(p.s. Kathy is a avid crocheter  - her work is extraordinary)


Lovely chatting folks  - have a great rest-of-the-day.


Take care and stay nice too.

Mr HM

Tuesday, 17 October 2017

When Can I Retire?





Hi folks....so when can we retire?

Well, I had this exact discussion with a work colleague yesterday. Here is a rough transcript of that conversation:

******

Phil:  Hey Sam

Sam: Hey Phil....um, I wonder if I can ask you a question about retirement?

Phil:  Yeah sure Sam - but hey I'm not a qualified finance guy or anything  - you know that?

Sam: Yeah, that's alright. How do I figure out when I can retire? Like...the simple version (grins). Do you know how to do that math?

Phil:  Yep - so the simple answer is when you have enough invested to cover 25 times your yearly expenses....you can retire.

Sam: (Chokes on his biscuit) What??!

Phil: So yeah, just say your yearly expenses are say $60 thousand dollars, then times that by 25 and you would need $1.5 million dollars invested to retire and live off that drawing down $60 thousand dollars a year.

Sam:  I will never be able to save up that much!!  (expletive). Well, OK then, what percentage of my wage will I need to save to retire in ....say... 9 years.

Phil: (raises eyebrow incredulously) To retire in 9 years at least 70% of your wage needs to be pure untouched savings Sam.

Sam: OK, OK (snorts) well what about if I wanted to retire in 15 years - just being a bit more realistic.....?

Phil: Then that would require pretty close to 50% savings mate.

Sam: Strewth! Well, what about retiring in 30 years, would that mean 25% savings?

Phil: Nope - only about 20% actually......and 10% savings would be needed if you were to retire in 45 years time.  Look, I'll jot it down for you on the back of this envelope (I scribble on the envelope)

(What I Scribbled Down For Sam)

25 x your yearly expenses (lump sum invested)

Years to retire / net pay savings rate:
45 years - 10% savings
30 years - 20% savings
15 yrs - 50% savings
9 yrs - 70% savings

Sam:  But hang on, work pays us 9.5% into Superannuation so.....(scratches head trying to do the mental arithmetic)

Phil: Yep.... so we'll see you retiring in about 49 years using that percentage alone. (pauses with spoon poised dramatically whilst giving Sam 'the look') (side note...Mr HM has conspiracy theories about Superannuation, but spares Sam that conversation)

Sam: Oh no!!  So if I just rely on my Super' I'm gonna have to work for a lifetime.

Phil: Yup (stirs coffee nonchalantly) pretty much.

Sam: Are....are....are you sure you are doing the math right?

Phil:  Yep. I'm sure.

(long pause as this all sinks in ....)

Phil: (quietly) So....what are you going to do about that Sam? (me now feeling nervous...am I prying too much??  But I can't let this conversation finish unresolved like this)

Sam: Gee Phil -  all of of sudden reducing my expenses is really important - that way I will not need to save so much - Yeah?

Phil: Spot on Sir!

Sam: ...and, and, and earning some more but not increasing my spending also looks pretty important too ..... like, so I don't have to wait so long - Yeah? (looks at me hopefully)

Phil: Right again.

Sam: (sounding more hopeful now) ..... and I'll have to get a grip on how to invest and all that jazz so I get reasonable returns on my savings.

Phil:  Absolutely.....but learning how to invest is actually the easiest bit.

Sam: So in a nut shell (uses his fingers to tick off each item...) 1. Reduce my expenses ..... um, 2. Increase my earnings and, um..... 3. Invest wisely. Yeah?

Phil: ....... and do all three in equal measure. Each of those three is as important as the other. Like a triangle approach.

Sam: Got it. Good chat Boss

Phil: Y'welcome Sam. No more chatting but.... now go do it.

Sam: (smiles broadly) Yup.


******





Now can we see why the math is important folks?

Boring - but important.


Take care folks and stay nice.


Mr HM




Sunday, 15 October 2017

I'm 50 this week - NEW GOALS







Hi folks

I turn 50 on Wednesday and instead of moping, I have decided to set myself some goals.

My Goals:

1. Running - To go from Couch Potato Esq. to running for 30 mins daily within 30 days. This will start in the morning at 6:00 am - 6:30am every morning for the next 30 days. I intend to walk 29 mins and run 1 min on day one, walk 28 mins and run 2 mins on day 2 and so on and so forth till I run the full 30 mins on day 30.

2. Write an eBook on Debt Reduction - The consumer debt reduction journey has been my most significant personal journey over the last few years and I want to write about it and share it, not as a financial book, but as a normal bloke talking openly about it.  I will be devoting 30 minutes each evening to writing this until it is done....and then I'll have to figure out how to get it onto Amazon etc. This goal starts tomorrow evening and will continue daily till it is done. You all will be the first to know when it is done.

3. Resume losing weight - I have done so well and have now stalled, so need to keep going. I will resume my frugal weight-loss regime that was working very well and keep updates happening. Luckily I have only put on a very small amount which will be simple enough to shift and continue losing. I need to get to 80kg (176.5 pounds) in 40 weeks.

4. Become Financially Independent - it sounds like a bit of a  hype buzz-word, but I can now see that there is a large, quiet and sensible community of folks worldwide taking this very seriously. I will be 67 in 17 years and need to ensure that my income streams will be well in place before then. I simply will not be able to do the work I am currently doing into my 70's, nor can I wait till then to create new streams of income, so I need to start now. Total retirement is not a very big motivator for me, so I will need to create income streams that will keep me engaged well into old age. Step 4a is to devote 30 minutes each day to educating myself on multiple income streams and how to create them and keep them healthy. Step 4b will be to track my savings to ensure a nest-egg of sufficient size is invested by the age of 67 to cover all living expenses and be maintained to leave a legacy for my daughters when I eventually choof off.

5. I intend to live till I am 110.  I just decided this recently.  I believe with a combination of emerging medical technology and research, a commitment to excellent eating habits, a commitment to physical exercise, a commitment to loving relationships, an excellent GP, an interesting and brain-stimulating way to create income, a non-focus on retirement (in the classical sense) and an increased interest and commitment to contributing to my community/country/world should do the trick. I have just decided to live (really live...not nursing home live) till 110 - so there! I have wasted 40 of the last 50 years in so many ways and thus I intend to have those 40 years back  - I intend to have my time over again which means I'll have to live till I'm 110 and that's that. I'm determined to do it, and if I don't, then I'll die trying ;-)

Have a great week ahead folks

Take care and stay nice.

Mr HM (Phil)


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