Get Rich Slowly [link] has just done a review of his blog's progress over the past six months. Aside from being green with envy at his blog's success (and his writing ability), I thought that some feedback on my blog would be extremely useful. So I'm asking for your feedback. (With acknowledgement to Get Rich Slowly for the structure of this post - it hardly seemed worth reinventing the wheel).

Enough Wealth began three months ago (19 July to be exact). In that time, it has started to slowly build up some momentum:
Posts: 61 (1.0/day)
Comments: 3 (0.03/day) !
Spam: 1 (0.01/day)
Visitors: 553 (16/day) since 25/9
Page Views: 1,045 (53/day)
Subscribers: 2 (0 by email)
I'd love to get your comments (more, more!), suggestions, and contributions. To quote GRS "If you find something that other readers should see, send it in. If you have a question about personal finance, let me know. Your feedback (good and bad) will help to improve this site. Please let me know what you think, either in the comments or via e-mail."

Where my Reader's are from:
United States 68%
Canada 10%
India 9%
Romania 5%
Japan 2%
Poland 1%
New Zealand 1%
Ireland 1%
United Kingdom 1%
Germany 1%
Other 1%
As an Aussie blogging from Sydney, I'm thrilled that 78% of my readers are in the US and Canada (but a bit perplexed that I have no readers here in Oz!) I think this probably has to do with most readers finding me via links on pfblogs.org and a handful of PF blogs [thanks Free Money Finance, Living Poor, and 1stMillionAt33].

BTW - If any other bloggers have tips on increasing traffic, please let me know.

Aside from the main part of my investment portfolio being in stocks and property, I have a minor portion of my portfolio (around 5%) invested in some "alternative" assets:
Hedge Funds - Ord Minnett OM-IP 220 series 1,
OM-IP 320,
OM-IP Strategic Ltd.
Agribusiness - Timbercorp Timberlots (1999),
Rewards Teak Project (2005),
Rewards Sandlewood Project (2005)
Other - Macquarie Film Investment Fund (FLIC)
While these are possibly good "diversification" assets, and, at least in the case of the agribusiness investements, assisted with tax planning, they have several substantial drawbacks:
* illiquid - the units in the hedge funds can be redeemed upon request, but it takes at least a month. The agribusiness units are "locked in" until maturity, unless you want to try to sell them privately (at a bargain price).
* difficult to value - the hedge funds publish a monthly "unit price". The others I just value at "cost" (except the FLIC which I wrote off ages ago) and hope for the best in the long term. There's really no way to guess what the prices for woodchips, teak and sandlewood will be in 5-10 years time (although the sales brochures have some really fancy looking graphs!)
* management fees - think of the worst possible combination of insurance "up front" sales commission, followed by the sort of on-going fees the hedge funds charge for "outperformance"! Boo, hiss.
* risk-adjusted return - the return (after fees) is probably insufficient for the amount of risk involved, although it's hard to evaluate with them being a part of a diversified portfolio. For example, my $5,000 FLIC investment provided an immediate tax deduction, but has since only returned around 15% of the amount invested and is being wound up with no residual value. At least I may be able to claim a capital loss on my tax return this year.

In terms of reporting, the hedge funds are held in one of my margin loan accounts, so I just include their value in my "equtities" total, along with a notional "value" ie. cost base) for my agribusiness investments.

So far, the Hedge funds have performed pretty well:
Fund Date Date Unit Price ROI
Issued Matures (Aug 06) pa
OM-IP 220 Aug '97 Jun '15 $3.9465 15.35%
OM-IP 320 Dec '98 Jun '07 $1.7648 7.43%
OM-IP S/L Aug '99 Jun '08 $2.1426 10.93%
and have a low co-variance with my share investments, thus reducing overall "risk" (volatility).

I bought them without any gearing (debt), and have since transferred them into one of my margin loan accounts to provide extra collateral. As I'm not using making use of the increased borrowing capacity, they act to greatly reduce the chance of getting a margin call.

I also have a tiny amount of other "alternative" asset classes like coins and gold bullion - but I don't bother trying to include these (or my cars/household items) in my net worth calculations as they're not really liquid.

personal finance
investment
investing

It's always good to get some "free" money from your employer. Yesterday I had my application for study assistance approved, up to a maximum of $1200 this year. I'm currently doing a Masters in IT by distance education and my employer has agreed to reimburse me for 50% of the course fees for the subjects I'm doing this year (paid when I pass each subject). As the course fees are tax deductible [as "work related self-education" expenses] the refund from the company will be somewhat offset by the reduced tax deduction, but I'll still end up ahead by about $900.

As usual the process of applying for study assistance is extremely bureaucratic - I'd previously had an application to be reimbursed for the entire cost of the degree approved - unfortunately the approval was only "valid" for that particular financial year budget, and as the degree will take about 8 years of part-time study by distance education this ended up meaning I got nothing refunded for the subjects I completed that year. Working out how to submit an application worded in a way that means I'm entitled to get some money back within the current budget period took some doing!

As I'd already budgeted for paying my course fees, when I get the refund money I'll probably use it to by some shares for my new baby boy.

personal finance
money
saving

In keeping with the "open wallet" philosophy, I'll track my progress monetarizing this blog.
income expense
Jul 06: $ 0.00 -$ 0.00
Aug 06: $ 0.00 -$ 0.00
Sep 06: $ 0.00 -$ 0.00

ps. In case anyone is wondering why I've included Amazon.com and AdSense links in the "body" section of my blog, it's simply that my template currently only lets my post content start to appear after the end of any sidebar material - so including all sponsored material in the sidebar would mean a huge amount of whitespace appearing between the posting date (which does indent correctly for some reason) and the start of the actual post content! If I work out how to fix my blogger template I'll move all the "ads" into my sidebar.
monetization

The latest Festival of Stocks is now running over at Value Discipline. It includes my recent post about selecting US stocks to add to my US stock portfolio using Joel Greenblatt's Little Book methodologies, as well as one about selecting non-US stocks (for US investors) by Controlled Greed. Between the two of us we have the entire global stock market covered! Be sure to drop over and check out the festival.

A survey by Money Magazine and ICR was reported in CNN.money this week - and I think that the survey question has to win the title of "this week's most badly worded survey question":

"the amount of federal taxes paid by Americans is distributed appropriately across individuals of all income levels."

I find it absolutely unsurprising that most people, regardless of political persuasion, disagreed with that statement (85% of Democrats, 73% of Independents, and 60% of Republicans disagreed) given that you would have to disagree whether you thought the rich paid too much in taxes, or if you thought the rich should pay more tax!

The 69th Carnival of PF was held over at Carnival itself! This was my first Carnival and I loved reading through all the top posts that were selected...

The Financial Times.com reported that the Chigago's Mercantile Exchange has launched futures and options that can mitigate the risk of house price movement:

"The CME will offer futures and options based on house prices in New York, as well as Washington, Boston, Miami, Chicago, Denver, Los Angeles and San Francisco. Las Vegas and San Diego, two of the hottest real estate markets over the past two years and the source of feverish discounting by some new-home builders, are also included, and could create volatility."

If you have a large fraction of your investment portfolio tied up in real estate (eg. your home), this could be a way to protect against declines in the value of your home now that the US property "bubble" appears to have started to deflate.

"Retail investors can use the futures in three main ways. The simplest, direct investment, lets you take a view on a housing market by going long if you think it will go up, or short if you think it is going down. This is not possible for all futures contracts. These will be settled in cash, unlike, for example, the CME’s frozen pork belly contracts.

A similar shorting strategy would allow homeowners planning to move within a limited time frame to lock in the current value of their property, with the contract paying out the difference, or at least part of the difference, if house prices decline before their planned move.

Each contract is valued at $250 multiplied by the index value. Thus to cover the value of a $500,000 home in Chicago, where in January 2006 the index stood at 163.98 – would require 12 contracts.

Finally, owners could link the value of their home to an index. For example, the home above could be listed at a constant 3,000 times the value of the Chicago index, tying its worth to the index and providing transparency to future buyers."

Traditionally diamonds have been a terrible "investment" for small investors - usually restricted to just buying a mounted diamond engagement ring of dubious quality from a retail jeweller, all the while knowing that at best you're going to end up paying twice what the stone is worth, plus a small fortune for the setting. As a "real" investment diamonds were disadvantaged both by the mark-up charged by retailers for unmounted gems and by De Beers having a virtual monopoly until recently - marketing around 80% of gem quality diamonds and controlling the supply of gems in order to "support" prices. [The was an urban myth that De Beers had a large concrete slab poured to "lock away" a huge amount of gemstones to keep them off the market...]

However, although De Beers still mines around 40% of the world's rough diamonds, and is by far the largest seller of gem-quality diamonds, it was allegedly "decartelised" in 1999-2000 when Ashton Mining (owner of the huge Argyle Diamond mine in Western Australia) decided to start market its own diamonds. Unfortunately, Argyle's diamonds are mainly of industrial grade, so even today the competition with De Beer's is rather limited.

Since 2000 De Beer's excess stock of diamond gemstones has slowly been released into the market, which has depressed prices somewhat at the lower end (smaller stones), as can be seen in the International Diamond Exchange IDEX index below:



As the De Beer's stockpile slowly unwinds, is it now time to look again at diamonds as another alternative investment, similar to gold and silver? A few things make me think not (yet):
1. I'm not sure what fraction of De Beer's huge store of diamond gemstones has actually been sold off - there could still be a huge, unknown oversupply.
2. The trading of individual stones is problematic due to each stone being individually valued based on the "4Cs" (colour, clarity, cut and carats) with the evaluation of these being more art than science. The same stone can get slightly different appraisals from the various certified diamond valuers.
3. Trading the IDEX index would be an option (excuse the pun) to overcome this, but I don't think this index is actually traded anywhere - it's used mainly for diamond merchants to monitor changes in the market for physical diamond gemstone trades.
4. Artificial diamonds may reduce the demand for natural gems in the future.
5. They're still huge, relatively untapped diamond fields off-shore along the coast of africa, and new fields may be discovered such as the ones fairly recently developed in North Australia and Canada.
6. Diamond gemstones are not "consumed" (apart from some loss when they are recut into more fashionable shapes), so each year production is adding to the total "pool" of available gems. At the same time the population in the developed world is aging, and birth rates in the rapidly developing countries trending down, so demand may diminish over time.

I recently finished builing a tree-house for my two sons. I had always thought that having a tree-house would be "cool", and as our house has a huge liquid amber tree growing right outside our front porch I couldn't resist letting my "inner tradesman" run amok. (Actually its TOO close to the house - one day I'll have to get it removed before it damages the house).

Luckily my eldest son was keen on the idea, having enjoyed reading the "magic treehouse" series of books (written by Mary Pope Osborne) in pre-school. The materials cost around $500 altogether, mostly spent on the wood decking and handrails, plus some screws, decking nails and poly rope for the ladder. Luckily I already had some suitable wood lying around to use for the main beams and floor joists, and had all the required tools already.

Construction took longer than expected (doesn't it always) - around 5 days all told, spread over several weekends and a couple of days off work (the company I work for allows you to take up to half of your "sick leave" entitlement as "personal days"). I went for a simple "open" architecture - just a floor and safety rails (with fly-screen glued and nailed to the rails for added safety). As my two boys are aged 6 and 0, they'll be able to enjoy playing in it with their friends for the next 15 years, so the cost works out at only 32c per week per boy





When the boys are older I'll be able to increase the "fear factor" by adding a "flying fox" (zip-line) which is available as a kit for around US$80 [link]. Hopefully the tree doesn't do any more damage to our house in the meantime - it had already put a small crack in the brickwork at the front of the house before we bought the place 3 years ago, and we've had a couple of visits from the plumber to clear tree roots out of the sewer pipes. Hmmm - perhaps the total "cost of ownership" will average out at a bit more than 64c a week.

Our rental property has now been vacant for almost a month now... there's nothing to do but wait for the right tenants to turn up. The property is over 40 years old, and pretty much in "original" condition, so we're only asking for a modest amount of rent for this suburb. Unfortunately, whilst the small cliff that the house is perched on gives wonderful valley views [link], it also puts off prospective tenants that have small children.

We're soon going to have to start "redrawing" the extra payments we'd made on our home loan over the years in order to make the loan payments while the wife is on maternity leave and then goes back to work part-time. I hate to think how much longer it will take us to pay of our home loans for every week we're missing out on any rental income. I always told the wife I prefer investing in the stock market...

Insurance is undoubtably a "good thing". Unfortunately there is still an archaic commision-based sales system in place that adds huge costs to many insurance products.

While you can shop around via the internet for car and home insurance these days, and competition has therefore brought costs down, the story seems to be totally different when it comes to life insurance and loss of income insurance.

I have my life insurance via my company's superannuation scheme, which has the benefit of being paid for out of "pre tax" dollars. The group rates that apply are comparable to what I could get outside of super [I think the situation would be different in the US where there is more discretion in the setting of individual rates]. However, the downside is that this requires being a member of my company's "preferred" superannuation provider. Now that "choice of superannuation fund" has become a reality in Australia, I'm tempted to shift from my current BT/Westpac scheme into one run by Vanguard in order to save on fees, but I'm not sure that I'd be able to get the same amount of Death &TPD life cover outside of my superannuation scheme.

The BT scheme I'm in has a MER (fee) of around 2.25% of my superannuation balance, although I'm lucky that my employer has arranged for a "rebate" of some of the fee back to members. This reduces the overall MER to around 1.5%. This is still a fair bit higher than Vanguard Superannuation, where fees start at around 1.1% for the first $50,000 (.75% admin/plan fee + .29%-.37% management fees) and then reduces to around 0.85% for the balance above $50,000. Over 20 years the extra 0.65% would have quite an impact on the final balance when I retire! Based on published research about the likelihood of getting outperform from an active fund manager vs. an index fund, I don't think I'll end up ahead by paying the higher management fees.

Even with the Vanguard Fund, the fees in Australia are significantly higher than what Vanguard charges in the US. And in the case of the Superannuation funds, I can't see why the .75% admin/plan fee on the first $50,000 ($375) can't cover their cost per plan for administration overheads. As far as I'm concerned the admin fee for the balance over $50,000 should be zero, and their profit margin come only from the 0.29% - 0.37% management fees (more than sufficient for a mix of index funds!)

My other main insurance expenses are private health cover (around $50 /mo) and around $75 /mo for income protection insurance. These too have negatives - the medical insurance is really only worthwhile to save tax - otherwise I'd probably have to pay a medicare tax surcharge the same or higher than the insurance is costing. In terms of benefits, the hospital-only cover we've got has reimbursed one ambulance fee in the past five years. It was of no use for the delivery of our baby last month, as we couldn't arrange accomodation at the private hospital, so had to "go public". In any case the care in public hospitals is generally just as good as private, and being a private patient would still have cost us several thousand dollars more out of pocket due to the gap between the medicate scheduled fees, the private cover, and what the private charges are. I suppose the "payoff" for having private cover will come if we ever need "elective" surgery, such a hip replacement or some such.

The loss of income insurance costs are not too steep. Planning of working for another 20 or so years before retirement, and having two kids, the odds (around 20%) of suffering a medical disability that severly reduces my income earning ability and increases living costs is too high to be uninsured. Having a two year waiting period before payments commence kept the premiums down - I rely on having several months paid leave and sick leave accumulated, plus sufficient investments to see me through. One thing that does irritate is that the loss of income insurance pays "commisions" of 50%+ of the first year's premiums to the online insurance agent I used to arrange the cover. And, what's worse, they will be getting a "trailing commision" of 30%+ of each payments I make in future years!

While reading through the archives of the "It's Your Money:Money Musings" blog, I came across this post about class, which relates to an online "class calculator" tool available here from the New York Times. Although it's obviously US-based, the results should be applicable for Australian readers also - although, of course, we Aussies don't have any such thing as a "class system"

Money Musings found his "class" came out as:
Occupation: 49th Percentile
Education: 79th Percentile
Income: 78th Percentile
Wealth: 55th Percentile
AVERAGE: 64th Percentile

When I tried it I got:
Occupation: 81st Percentile
Education: 97th Percentile
Income: 91st Percentile
Wealth: 93rd Percentile
AVERAGE: 90th Percentile

Which seems pretty much spot on - one of my short term goals is to have a personal net worth that exceeds the 90th percentile household net worth for my age group (using data from the most recent HILDA survey), and, eventually, to exceed 1% of the cut-off the the annual BRW Rich 200 list.

One thing I noticed is that you can influence the outcome by picking the best description of your occupation - as a Chartered Chemist I can hit the 81st Occupation percentile using the "chemists and material scientists" grouping, but if I put in my current occupation (Process Improvement Manager="other business operations specialists") I only rate the 49th percentile!

Another thing to note is that there is no adjustment made for age. As Money Musings says, it is"Difficult to compare the net worth of a 50something with that of a 30something..."

Just in case anyone needed any more evidence that most "professionals" giving advice or managing equity investments are just guessing (and sometimes getting lucky), here's an illuminating graph from a recent article in the New York Times' Your Money section. It shows that the number of investment newsletter editors who were recommending a reduction in market exposure corresponded with the arrival of a good "buying opportunity". You can flash this graph at the next financial planner who tries to sell you a managed fund that charges exhorbitant fees based on an ability to "time the market"

ps. The cartoon is also cute.

As your credit report can affect your borrowing power, and, at least in the US, what interest rate you are charged, it is important to obtain and check what information the credit agencies have on you.

The NYT had a good article on this topic today, relevant to US readers. Main points are:
* There is only one Web site—www.annualcreditreport.com—where you can either download or order your free reports by phone or mail (the toll-free number is (877) 322-8228).
* You should check your report once a year and correct any errors.

For Australian readers, two main agencies maintain credit databases, and you need to obtain and check the report from each. This will cost a fee(eg. $27 from Baycorp) if you apply online. If you write in and ask for a copy of your details you can get it for free in around 10 days. (They obviously want to make it as hard as possible to make a "free" request.). A form is available online from Baycorp Advantage and Dun and Bradstreet.

There is good information on what's included in your credit reports available from here. The most relevant bit is
"If requested in writing, credit reporting agencies must provide you a report detailing all records on your file. The credit provider must provide a copy of your file within 10 working days of receiving your written request. Section 33 of the South Australian Fair Trading Act 1987 states that this must be provided free of charge to South Australians. If you require a copy urgently, you can request this online or by fax. However, a fee will be charged for this express service."

Most other states have similar legislation, so just write in and ask for a copy of your report from each agency.

Personal finance, Money, Investing, Investment, Wealth.

Sort of

My wife gave birth to a healthy baby boy yesterday, so our "investment" in children has doubled overnight [editor: this post was originally done on 23sep]. This will probably mean fewer posts for a while... though I may do one on the cost of disposable nappies!

2million has a post on starting to plan for his wedding - there are a lot of interesting comments about how much is "enough" to spend on a great wedding ("perfect" weddings don't exist in reality, and planning for them costs a fortune).

I put in my two cents worth on how to plan an affordable wedding that still provides priceless memories (and not too much stress for everyone):

As my wife's parent were both deceased, I (and my parents) paid for our wedding. We did it "on the cheap", but it was still very nice - and I used the money we saved to splurge on a "round the world, New York , London and Paris (with QEII from NY to the UK)" honeymoon

We spent a few enjoyable weekends driving around Sydney looking for a church with the right "atmosphere", did up our own wedding invitations using some nice paper, an inkjet printer and a sketch of the church the minister gave us. The biggest saving was to do the reception as an "afternoon tea" at my parent's house, which was possible because we only invited very best friends and our relatives (we don't have many living here in Australia anyhow), so we only had around 30 guests. We also got a couple of standard cakes with suitable icing from a local bakery and staked them up to construct a wedding cake - "real" wedding cakes cost a fortune and are practically inedible. It looks fantastic on the wedding photos.

We also got several of the relatives to take photos, videos etc. and got copies of everything. Unless you're planning on sending your footage to "funniest home videos" you don't need a "professional" photographer (most are pretty average anyhow).

The wife borrowed her wedding dress from one of her best friends, and my sister made up a veil and other bits and pieces which made nice keepsakes . (You intend to keep the dress and the wedding cake forever? Sounds like "Great Expectations")

Anyhow, you should discuss this option with your fiancee (doing a "home made" wedding rather than the "crass, commercialised" version) and see what she says. You never know till you ask.

Reading a post on Canadian Capitalist's blog about how much he saves started me thinking about how much I'm actually saving these days. Beyond a glib "as much as possible" it's actually not that easy to work out, as the use of gearing can complicate things.

It's easy enough to break down my standard home loan payments into a saving (principal repayments) and an expense (interest) component, and the same used to apply to my investment property loan. But nowadays we've switched the rental property loan to interest only, and the extra payments that used to help reduce the loan prinicpal (ie. were counted as "savings") are now being used to pay the interest (an "expense") on loans used for 100% geared investments in US shares (via a Portfolio Loan line of credit from St George) and an investment in the Macquarie Equinox Select Opportunities Trust (funded entirely by a loan from Macquarie Bank).

So, even though my income has hardly changed (a very slight increase in dividend income from the US shares and 1% interest income from the Equinox trust) more of my cash flow is now going into interest payments (an expense) than into reducing debt (savings). So it appears my savings rate has decreased, even though I'm not spending any more than before on consumption and household expenses.

Similarly, the bit of dividend income that is getting reinvested (via a DRP) is counted as "savings", but I don't think share purchases made using an increased margin loan balance can be counted as "savings", as this increase in assets is totally offset by an equivalent amount of increased debt (ie. there is no change in net worth when the purchase is made).

The dividends received add to my total income, and the interest on the margin loan is an expense, but using reasonably high levels of gearing the interest expenses generally exceed the dividend income - ie. negative gearing. While the main goals of using gearing are to increase the returns and diversification of my investment portfolio, it also has the effect of reducing my taxable income and replacing it with (hopefully) some long-term capital gains. But from a savings point of view it is simply converting one form of expense (taxes) into another (loan interest).

This is why the use of gearing makes any meaningful calculation of percentage of income being saved very difficult, and make it meaningless to compare the "savings rate" of investors using gearing with other investors that save without any gearing.

The best approximation I can come up with for FY 05/06 is:


Savings - 32%
Taxes - 9%
Mortgage Interest - 21%
Investment Interest - 21%
Other - 17%

nb. The tax figure is low as it is based on income tax assessed last FY as a proportion of my grossed up income, ie. before deductions such as superanuation (SGL and salary sacrifice) and margin loan interest. It also doesn't include any GST, fuel taxes etc.

Personal finance, Money, Investing, Investment, Real Estate, Wealth.

I must confess, aside from spending time on "big ticket" items (like continual self-education to boost my salary income, reading about investing and trying to inch towards the efficient frontier by tweaking my asset mix and minimising fees) I also like to waste my time dabbling in getting "freebies".

For anyone else who likes getting something for nothing (of course this assumes that your down time would otherwise earn $0 per hour - say watching TV) I list a few of my favourites.

1. Email cash - You can earn a regular 5c per day doing a couple of clicks on their website, occasionally get advertising emails which also pay 5c when you open them and click the link. Most fun is the daily number guessing game which you get to pick 5-7 numbers between 1-1000. If your number comes up you get 200 pts ($2 worth). You can invest up to 10000 pts ($100 worth) in their "eBank" which pays around 15% interest. When you have some pts to cash in you just exchange them for e$ which can be used to buy a real money cheque. Cheques are only available for $30, and there is a 1e$ admin fee. So far I have got about $90 of real cash from this. Makes a good diversion during a tea break or when you're on hold. If anyone wants to join up, go to email cash. Using this link will get me a few pts for a referral

2. FlyBuys - Joining this program is free, and just flashing the card when buying your normal shopping at Coles, Myer, Shell petrol, Target etc. will get you 1 pt per $5. You can earn pts much faster however if you have a NAB credit card. You'll then get a 2nd pt per dollar on such purchases if you pay by CC. You will also get 1 pt per dollar for all purchases using your NAB CC. Obviously this is NOT good if it means you run up CC debt. I always pay off the balance in full during the interest free period (up to 55 days) so my only cost is the annual card fee (about $28 pa). I use my CC for all my regular payments - shopping, doctor, dentist, water, phone, electricity, car rego etc, etc, so I put through about $2000 per month on CC and earn around 6,000 pts per month. You can redeem 13,500 pts for $100 paid off your NAB CC - so I'm getting about $45 value per month for free.

3. Mypoints - a US based email "clicking" program. You can redeem pts for Barnes & Noble gift cards or webcertificates. If you have a US address available to get the gift cards sent to, then you can use the gift card number and PIN number to order B&N books online and get shipped as gifts to the US. Not really worth getting books sent to Australia as the P&H is exhorbitant. If you redeem for a webcertificate, you basically get a VISA debit card number with an available balance. Theoretically you could use this to pay yourself if you have a merchant website - eg. CC payment processing via Paypal. I'll let you know if this actually works out in practice. I tried it once years ago and had trouble "activating" the Webcertificate so couldn't use it, so I've since just redeemed MyPoints for B&N giftcards to send friends and relatives in the US.

Well, if you write a blog you obviously want to be read - so pfblogs.org seems a good idea.

I'm not so keen about the need to pay $2 a month if you want to be a "friend" and get a better ranking in the blog posts listings - apparently you used to just have to give them a mention and add a permanent link to become a "friend".

There is also a commercial (with ads) version pfblogs.com - I would have expected THAT one would be the one to charge to become a "friend"!

While blogging about wealth creation, it's natural to ponder the possibility of making some revenue at the same time. When I joined blogger.com I was offered a sign-up to Google adsense. Theoretically, when lots and lots of people start reading this blog, some will click on the google ad links, and I'll get paid a pittance.

So far? In 12 days I recorded 30 page views, with a *huge* spike of 8 hits the day after I mentioned this blog in a post to mymoneyblog. However, there hasn't been a single click yet, and while google doesn't advertise the payment rate I expect it's in the order of cents per THOUSAND clicks, so I certainly won't be getting get rich that way

However, there are lots of other methods that *could* earn revenue from a blog - see How to Make Money with Your Blog Site for some of them.

Over time, I may try some of the ideas from this blog and see if any of them work in practice!

Meantime, the most important thing will be to blog something that is interesting enough for you to come back regularly and read

Although, from a wealth accumulation viewpoint, you're generally better off spending your spare time on continuing education than wasting it trying to get small amounts of money for free, you sometimes need 'downtime' just vegging out in front of the TV, listening to music, or, in my case, getting a trickle of money for nothing. (It also helps subsidise the cost of the broadband connection).

Many US blogs (eg. mymoneyblog) have quite a bit of information about using a 0% APR credit card transfer offer to access to free money which is then invested to earn some interest when deposited into a savings account. In Australia things are a bit different - your credit card apps don't drop your credit rating (this isn't any), but they do appear on your credit report, and, more importantly, if you're honest in your application, there is a limit on the total line of credit you'll be able to get (based on your income and existing repayments). Also, in Australia, these interest free offers often only run for 6 months (compared to 1 year in the US) and you can only get the balance transfer from an existing credit card or other account - you can't simply get a check for the transfer amount as seems to be possible in the US.

For these reasons, I took a while to figure out a way that would make the 0% offers available in Australia work in a similar way to the US - and I think I've found a way. I'll outline the "PLAN" today, and we'll see how it actually works out...

Before, we start, let me remind everyone that I'm not giving any financial advice here (I'm not allowed!), just blogging what I'm doing myself. If you want to try it yourself, it's entirely your own choice, and you'll need to do your own investigations into the risks involved.

Now, my plan:
1. Open a new Coles Source Mastercard (currently with a bonus $20 giftcard offer) [http://www.source.com.au/MasterCard/ColesGiftCard/] or any similar card offering a 0% balance transfer offer (and no annual fees) - I got one with a reasonable credit limit without any problems.
2. In the specific case of a Coles Source MC - I bought $30 worth of groceries at Coles to earn a 4c/L fuel discount voucher AND qualify for the gift card offer.
3. I'll now pay off the purchase amount so I don't have a balance on the card (otherwise it would be charged interest while I have a balance transfer amount on the card)
4. When I send in the 100 point identify check form, I'll apply for a balance transfer to my RediCredit account with Citibank.
5. As I currently have a balance owing on the Citibank account (for some margin loan interest prepayment) I'll be saving 11.99% interest on the balance transfer for 6 months. If I didn't have any current debt on the Citibank account I could draw a cheque to myself and deposit it into an online savings account earning around 5.85%
6. Don't purchase anything using the Coles MC while the balance transfer amount is owing - otherwise you'll pay the normal interest charges until the balance transfer amount has been paid off in full.
7. Before the 6 months interest free period ends I'll pay off the balance transfer amount owing on the Coles MC - either with cash I've got sitting in a savings account, or I could pay off using my Redicredit account (back to square one).

The end result - we'll see. But, hopefully, I'll have saved 11.99% interest on the balance transfer amount for 5-6 months. Assuming a balance transfer of $6,000 this will be worth around $350 - not bad for around 20 minutes work.

Hi. I'm Ralph. I started my personal finance blog Enough Wealth back in July, and I'm now setting up this blog to serve as a mirror/backup site (with links to the original posts) and to make use of the extra features not available on blogspot - mainly some stats and CATEGORIES.

I post every day, and will add the latest post title with a link to the original post stored on Enough Wealth - you can either read my blog there, or, you may prefer to browse past posts here, where they are categorised.