I usually get a large dividend payment from my CDF holdings at this time of year, and use it to repay the margin loan interest pre-payment that I've made in late June. Most years I initially pay the interest using my Citibank Redicredit Line-of-credit account and then pay off the citibank debt using my CDF dividend, but this year I chose to capitalise the margin loand interest payment. This means that the $8,416.63 dividend that was paid into my Credit Union account yesterday can be used to make other investments.

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Enough Wealth 2007

I got my annual salary review letter yesterday and it turned out I got a 3% increase. Nothing spectacular, but it's slightly more than the past 12 months inflation rate so I can't complain. DW returned to work from maternity leave a couple of weeks ago - just in time to also get the annual rise of 3%. She had originally planned to return to work at the end of July but her boss advised her to return to work a few weeks earlier so that she'd not miss out on the annual rise. As a one-off rise it's not that substantial, but it will boost all future year's pay by 3%.

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Enough Wealth 2007

Next Wednsday will be my first fortnightly pay of the new financial year, so I expect the annual salary letter was distributed at my workplace last week while I was on leave. So, tomorrow I should find out what sort of pay increase I've received. The recent national minimum wage case awarded a 1.7% rise and the average weekly wage was risen by around 3.5% in the past 12 months. Since I haven't had a change in job description in the past year I expect a rise of between 2.5% and 5%. Since even a 5% rise in salary would only have the same impact on my financial position as an extra 0.35% return on my investment portfolio, the impact of my wage rise will be more emotional than fiscal. If I get a minimal rise of 2.5% or less I'll probably feel a bit unappreciated, especially since I only got the standard across the board rise of around 3% last year. A larger rise would make me feel appreciated at work. That's one of the challenges faced by employers - any large wage rise has only a transient impact on employee morale and motivation, but has an ongoing impact on the cost of the payroll and the company's bottom line.

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Enough Wealth 2007

Late June (just before the new financial year starts) is when my company does it's annual salary budget. Unless you're getting a promotion, have done an exceptional job, or were recently employed and just coming off your probationary period the salary review tends to be a somewhat disappointing experience. The default rise is a "cost of living" adjustment, which is allegedly based on the previous 12 months CPI increase. Given that inflation for the past year has been around 3%, and the fact the the

NSW minimum wage was just increased by 5.3% (from $504 to $531 a week), this year's standard rise should be around 3%-4%. Last year I got the default rise (3.5%), and I expect about the same this year, as I'm in the same role and already had a large rise two years ago. Anyhow, although a big rise would be a nice surprise it wouldn't have a material impact on my net worth. After all, a 5% salary increase this year is equivalent to my net worth increasing by just 0.35% - even less after tax! However, it would increase the value of my accrued annual and long service leave (around 16 weeks altogether) and compounds with any future rises - ten years of 3% increases leaves you in a much poorer position than ten years of 4% rises. Ah well, I'll find out the good (or bad) news in a couple weeks time... It's a bit like waiting to open a Christmas present.

Enough Wealth