I originally started using savingadvice to mirror my blogger site, as it offered 'categories', which wasn't available on the old blogger. However, it did have some drawbacks, mainly less ability to customise the blog template, and the fact that savingadvice gets revenue from google adsense ads using MY content.

The new version of blogger (came out late last year) supported categories, so the only reason I kept this blog going as a mirror site was because it appears that I have different readers here than I do at my main site

enoughwealth.com. However, recently I became worried that having "duplicate" content on the two sites might be bad for my google pagerank, so I started only posting the first part of each post on savingadvice.com, with a link to the the full post on enoughwealth.com

Ever since doing that, the new posts have been getting deleted shortly after I've published them! I feel that this is a bit much, especially as there doesn't seem to be any stated policy against this, and I haven't been sent any notification that this is happening, or why.

So, I've decided to only blog on my main site from now on. I invite you to continue reading EnoughWealth at http://enoughwealth.com

Regards

ps. We'll see if this post survives, or gets purged by the mysterious SavingAdvice content police.

Trent, over at

The Simple Dollar has done three great post in succession:
1. Dealing With Professional Burnout Without Quitting Your Job
2. Revisiting The Happiness Scale
3. A Financial (and Personal) Commitment For November

The only trouble is I don't think I can apply his good advice myself. For example, I'm currently less than enthused at work, and Trent's post offers some great tips for recapturing enthusiasm for your current job. However, the aspects of my job that I find least enjoyable happen to be the ones my boss wants me to focus on! And my company isn't so large that there are any other suitable positions I could transfer to for a change of scenery. In this situation Trent's advice is to update my resume and look for another job. But, realistically, I couldn't get the same or higher pay if I changed jobs. I'm also not feeling energetic enough to want to start over at a lower paid position and put in the hard yards required to get promotions and pay rises. I did that ten years ago when I started at my current company, when I was still single, and I can't see myself working late evenings and coming in to work on the weekend for unpaid overtime now that I have a wife and two small kids. So, I think I'll just soldier on in my current position, focus on taking an overseas holiday with the family next year, and plan on eventually changing jobs when I complete my GradDipEd qualification and a suitable teaching position becomes available close to home (or in the area I'd like to move to for my retirement).

The second post (about the happiness scale) is also very interesting. But, unlike Trent, the three times I can recall my happiness state getting close to "10" were all quite expensive and not easily replicated:
1. on my honeymoon,
2. on a scuba diving cruise in the coral sea
3. on a cross-country skiing/camping trip in the Snowy Mountains.
Focusing on small daily pleasures and keeping my happiness score above zero is more my style.

The third post regarding Trent's commitments for November is more inspiring. We can all benefit from making "to do" lists, and posting them on a blog helps turn a wish list into a commitment. My list of things to do before the end of the year includes the following:
1. Get my tax return completed and lodged. And get my GST transactions log up to date so future tax returns will be easier.
2. Measure and order a replacement pool fence. Install it.
3. Do some garden improvements. And landscape the pool area. Maybe even build a garden pond and put in some Koi.
4. Complete the remaining assessment items for my current GradDipEd and DFS(FP) enrollments.
5. Lose 10kg and exercise more - so far this year my weight loss goal is the one that has given me the most trouble.

Fortunately my financial goals tend to take care of themselves now that I have my savings and investment plans in place. I do spend a few minutes each morning updating a spreadsheet with my various account balances (I like graphs), but aside from the occasional bit of paperwork for a stock takeover or SMSF admin task my investments are running on autopilot.

Copyright Enough Wealth 2007

Well, the first anniversary of EnoughWealth has arrived. I enjoy blogging about personal finance, and enough people read this blog to make it seem a worthwhile hobby, so the stats are largely irrelevant. Then again, I like to see readership trending upwards, and it's interesting to see which posts are most popular and which attract the most comments. I've combined the stats for the two sites that post my blog - they are mirrors of each other but seem to draw from different readership pools. The logs show very little referral from one site to the other, so the amount of double counting in the stats is negligible.
YTD:
# Posts: 474
# Visitors: 37,524
# Hits (Page views): 97,267
nb. This data doesn't include July and August 2006, and only partial data for
September 2006 as I didn't install sitemeter until late September 2006.


Copyright

Enough Wealth 2007

My theory about the IPE options was correct, the IPE share price went up another 3c to $1.08, so the IPEO price also went up around 3c. However my order for 70,000 IPEO at 2.7c was only partially filled (only 5,000 shares) and I doubt that the remainder of the order for 65,000 additional options will get filled at that price. By the close the highest bid was at 3c with the lowest sell bid at 7c. The last sale was at 6c, so I would have done really well if my order had been filled at the market open.

It was only after the market had opened up around 1% this morning that I realised I should have made the IPEO order 'at market' rather than 'at limit', but for such volatile penny stocks it's usually a bit too risky to place 'at market' orders.

Anyhow, since I already had 54,000 IPEO stock options with todays small addition I now have 59,000. Todays price rise gave me a quick $590 profit on just this small stock holding. The last NTA reported for the IPE shares was $1.23 after tax as at 13 July, so the stock price could easily continue upward now that some positive sentiment seems to have developed.

Copyright

Enough Wealth 2007

Last year I bought some shares in a private equity company

(IPE) because it was trading at a discount to it's float price of $1.00 when it was largely sitting on cash in the bank plus some general stock market investments. Since the general market had gone up since it's IPO it had a book value above $1.00, so it seemed like a sure thing. So far, so good, and I've made a bit of money with the stock now trading at around $1.05.

The odd thing is that I also bought some options on this stock, which entitle purchase of the stock at $1.00. The options expire in October, so they should still have some time value, and with the stock now trending up they should be worth at least the stock price - $1.00. However, IPEO is still trading well below the price I would expect, at around 2.5c/3.0c. I already have 54,000 of these options, but I think I'll buy another parcel, just in case the underlying stock keeps going up towards $1.10 or above, which should push to options to around 10c.

We'll see how it turns out.

Copyright Enough Wealth 2007

I'm quite enjoying the Diploma of Financial Services (Financial Planning) coursework from ps146.com. There are 80 assessment questions to complete within 4 months, so far I've done the first three. The subject matter in the first course is quite general, but serves to fill in any gaps in your knowledge, especially the finicky details like exactly what is the difference between general and personal advice, and how that translates into what obligations are restrictions apply.

The folder of course notes for the third subject (Superannuation) only arrived today - apparently the delay was due to updating the material to include the "Simpler Super" rule changes that came into effect on 1 July. It looks as if that is the most detailed of the subjects, as there are a lot of specific conditions that impact on how superannuation is taxed and when contributions and withdrawals are allowed. Since DW and I are trustees for our own SMSF this will be a useful subject.

Copyright

Enough Wealth 2007

I lodged our claim with the insurance company last night regarding the tree damage to our rental property. The CSR told me to call the Sydney office this morning to confirm that the assessor would inspect the damage today. When I called they had the claim recorded, but advised that a builder would be sent to inspect and quote first, and that it wouldn't happen today. The tennants have been good sports about the whole thing so far, but are complaining that it's a bit cold with a hole in the loungeroom roof just covered with a plastic sheet. If it takes too long to get the roof fixed (or we get heavy rain before the repairs are done) I suspect the tennants may just give notice and move elsewhere.

At 8am the repair man from the water company phoned to ask if I knew where the water meter was located. I had to admit that I had no idea - I knew where the tap was to turn off the main water supply, but hadn't noticed the meter (it's usually next to the control valve). The tennants later said that the broken water pipe (ripped up when the tree was uprooted) had been repaired by an emergency crew the night before, so I'm not sure why the water company was looking for the meter the next morning - perhaps to check how much water had been lost while the pipe was broken?

During the day we went into town to convert our home loan from principal and interest (P+I) to interest only for the next ten years. DW will be working part-time until DS2 starts school, so we need to reduce the home loan payments in the meantime. We also spent a hour and a half (!) at the family assistance office filling in paperwork to apply for family tax benefit payments. Hopefully we'll get a letter in a couple of week confirming the payment amount, but it's just as likely that we need to spend more time during business hours providing some extra paperwork that they forgot to request this time around.

Copyright

Enough Wealth 2007

Three out of the four modules for the Diploma of Financial Services (Financial Planning) arrived by Australia Post parcel delivery today, which is pretty good service considering I only enrolled in the course online on Thursday. The modules look fairly interesting, and the assessment items seem fairly straight-forward. In the first few assessment items you only have to read through the material provided and regurgitate the material in your own words. You have to pass all the assessment items with a mark of "100%" (ie. get the answer correct), but if you stuff up the answer you get sent back some "feedback" on where you went wrong and can resubmit.

The one missing module is the one on Superannuation. I'm not sure if this parcel was just delayed and will arrive by post tomorrow, or if ps146.com is in the midst of revising the course due to the changes to superannuation regulations that apply from 1 July. I don't think that they revise and update the material too often, some of the "background reading" material is at least 18 months out of date. It can't be too long before it arrives as you are only allowed four months from date of enrollment to submit all the assessment items (although you can get a couple of months extension for an extra $150 fee).

Copyright

Enough Wealth 2007

According to a study made last year by Professor Donald Black from the Univerity of Iowa, and published in World Psychiatry, 5.9 per cent of Americans have a shopping addiction. The compulsion seems to run in families, which also tend to suffer from mood and substance abuse disorders. See

this article in the SMH for more detail.

Enough Wealth

I bought DW a pair of diamond earrings last year for her birthday, on the understanding that, being a large one-off item she wouldn't expect much for future birthday or Christmas presents (we tend to only exchange token gifts between the adults anyhow). So, for this year's Mother's Day I simply gave DW a tin of "deluxe" hot chocolate drops, and a $20 gift card (one of the ones I'd redeemed using my accumulated points earned scanning the snack food items in my shopping for the past year). DS1 made a Mother's Day card at the church kids group on Friday, which I think is enough of a gift from someone that just turned seven. My own mother I just gave a $20 gift card, although a might also buy one of her favourite pot plants tomorrow morning before we drop in for a visit after lunch.

Enough Wealth

A quiet couple of days - DW has been hogging the laptop trading forex madly. After some big losses she clawed back almost to her previous high, before having another bad day today. She's still up a couple of hundred dollars overall, but has been up $700 on a couple of occasions. As my CFD trading account is currently in the red, I'm not in too much of a hurry to trade.

Meanwhile my new Dell PC arrived - plugging all the bits and pieces together went without a hitch, although I had one D'Oh! moment when I was wondering why the bluetooth wireless keyboard and mouse weren't working when I turned on the screen and PC. After rechecking the setup instructions I noticed that you had to turn on the mouse and keyboard, not just insert the batteries! I'm not sure how long the batteries last in wireless mouses and keyboards - especially if I don't bother to turn them off when not in use.

I tried plugging my Optusnet cable modem into the new PC, but the internet setup wizard couldn't find the service. I'll check what the settings are on my laptop configuration, but if I can't work it out I'll have to call the Optusnet service desk tomorrow after work.

The wireless network router and USB adapter kit hasn't arrived yet from Mitec. Hopefully it will come in the next couple of days (it was on back order and expected to take 5 days from last Friday). The payment via Paypal was initially confirmed, but then the "eCheque" transfer from my bank account into Paypla failed (Paypal reports it as "insufficient funds" but it's actually because my ING online account will accept online deposits from anywhere, but will only transfer funds out into the original bank account I used to setup the INGdirect account). I expect Mitec will send me an invoice if they ship the order. If the order status changes to cancelled, I'll try to call their service desk to arrange alternate payment. I would have done this today, but their web site has a notice that they often don't answer the phone, and recommend contacting them via email. This payment issue is too complex to fix via email tag, so I'll wait and see whether they invoice me or if I have to contact them to make payment.

I received a dividend cheque from Ludowici for $195.75 with a $83.89 franking credit. As I've put in a request to redraw the undeducted, unrestricted, non-preserved $34,000 from my superannuation account, I won't be selling off my stock portfolios for a couple of years. I already have some put contracts on the All Ords Index in place to protect against any major declines in the Australian stock market between now and December, so I'll review my situation towards the end of the year.

The Australian stock market was down the last couple of days, but today it rebounded over 1% to set yet another "all time high".

Enough Wealth

Do you prefer white wine or red? Collect HO or N gauge railway models? Do you prefer actively managed funds or index funds? Stocks, Bonds or Property?

I must admit that to a large degree I treat investing as a hobby. I enjoy reading through the weekly investment lift-outs in the newspapers, read investment magazines and surf the web looking for the next "millionaire in the making" article. Even if a lot of it doesn't teach me anything new, or I don't agree with the viewpoint, I still enjoy spending my time "playing" with my investments and reading about investing. Just as I enjoy reading about scuba diving sites or model railway layouts. Sometimes I'll even open up a new investment just for the fun of it.

Another thing in common with my other hobbies is that to some extent I accumulate net worth just for the sake of it. My retirement fund is on track to support me when I choose (or are forced) to stop working for an income, and although my other investments have theoretical performance targets, and target amounts, I'm not saving for any particular items or expenditures.

For me, saving and investing my money isn't all about deferred expenditure for some future purchase. For me the act of investing is an "experience" or "consumption" in and of itself. The only strange thing about this particular hobby is that often the more you spend on buying fancy new investments, the more you can afford to indulge your hobby in the future!

One mildly worrying thing (OK, it doesn't actually worry me at all) is that many people apparently view collecting money as a hobby as an undesirable behaviour. While gathering money to "keep score" may be OK for businessmen (ie. investing as a sport), it is viewed as unwholesome to accumulate money "for it's own sake". Some people continue to have a phobia about being poor even when they are, by most measures, already rich, and thus end up taking frugality to extremes and becoming the stereotypical Scrooge McDuck. I'm sure many well-balanced people enjoy the simple pleasure of watching their net worth increase over time. And you don't have to justify it by saying that you're saving for that round the whole cruise you've always wanted, or intend leaving your millions to a charity in your will.

Enough Wealth

The Australian Treasurer today released an updated "Intergenerational Report", five years after the first report made official the looming demographic disaster facing government finances as the aging Baby Boomer generation reached retirement age, stopped paying taxes and starting drawing on the aged pension. The most interesting aspect from my point of view was the radical change in the projected situation in 40 years time (which is based on expected trends in life expectancy, fertility rates, retirement ages and workforce participation) compared to the previous report. Instead of a projected 50 Billion dollars a year (5% of GDP) budget deficit in 40 years time, the latest projection is for a more modest $35 Billion dollar a year shortfall - a reduction of 40%. This decrease was largely due to a slight increase in the fertility rate (whereas the original report expected the downward trend in fertility to persevere) and a slight increase in the participation rate, especially of older male full-time employees. It makes me wonder what situation will arise if, as is likely, the participation rate increases further. As there is apparently a large proportion of the Baby Boomer generation that has insufficient funds socked away for their retirement, it seems inevitable that more of them will have to continue working beyond their planned retirement age. Perhaps this will end up being a non-event. I'll see what comes out in the next update 5 years from now.

Enough Wealth

I've been posting updates of my Australian and US stock portfolios each month, so I may as well post a monthly snapshot of my mutual fund holdings. I've excluded my shares in the Commonwealth Diversified Share Fund (CDF) as it is an exchange traded fund (ETF) and already appears in my stock portfolio posts.

After investing in several actively managed funds in my early days as an investor (in those days a monthly $50 or $100 savings plan was more in line with my available savings than buying blocks of stock), I've slowly moved away from funds, aside from low-cost index funds and some "hedge" funds. I found that, apart from often poor performance relative to the index they were bench-marked against, there were often problems with funds being "wound up" if they were performing badly.

My current Managed Fund investments are:
St George Margin Loan;
Code Fund Name Price Qty Value Margin
FSGSF Col First State Geared Share Fund $4.9418 4,427 $21,879.71 70%
OMIP320 OM-IP 320 Diversified Limited $1.8899 5,000 $9,449.50 65%
OMIPSL OM-IP Strategic Limited $2.2971 5,000 $11,485.50 60%
OMS1220 Series 1 OM-IP 220 Limited $4.1063 5,000 $20,531.50 70%
VIISF Vanguard Index International Share Fund $1.1462 13,046 $14,954.28 70%
VLHGF Vanguard LifeStrategy High Growth Fund $1.7237 18,453 $31,807.49 70%

Comsec Margin Loan;
FSF0169AU CFS Geared Global Share Fund $0.777 8,241 $6,403.47 50%

Enough Wealth

As a shareholder in Qantas, I've yet to decide whether or not to accept the $5.45 takeover offer by APA (Airline Partners Australia). When the stock was up near the offer price I was thinking of selling the stock on the market to lock in a tidy profit (my average cost is around $4.00) - I was leery of accepting the offer, mainly because it is conditional of receiving 90% acceptance and thus becoming compulsory. Unfortunately the stock drifted down below the offer price, and then dropped due the general market correction. Since then it has failed to get back up near the offer price as there was speculation that APA wouldn't reach the 90% acceptance level.

Today a major stockholder (with around 4% stake) announced that they defintely wouldn't be accepting the offer, so it looks likely that the APA offer will lapse, even though they've extended the offer until late in April.

I'm now toying with the idea of buying some MORE Qantas shares at their current price of around $5.06. This is 7.3% below the offer price, and, presumably the Qantas shares are thought to be worth at least this amount, otherwise the takeover would be accepted by shareholders. I'm thinking that if I buy at $5.06 there's three chances out of four of getting a good outcome. Either
1. the takeover succeeds, in which case I'd make a quick 5%+ return
2. the offer fails and a new, higher offer emerges - say $5.70
3. the offer fails and Qantas shares go higher than $5.45 in the medium term - say $5.80
4. the offer fails and Qantas shares drop back to their pre-offer level of around $4.20 - say $4.40

As the outlook for Qantas has improved since the takeover offer was announced, I doubt that the share price will drop back to $4.20 even if the takeover fails and no new offers emerge. I'd thus make a very rough estimate of my risk analysis as:

cost price = $5.09 (with brokerage costs)

expected outcome = [25% x $5.45] + [25% x $5.70] + [25% x $5.80] + [25% x $4.20]
= $5.34

ie. Expected outcome is 5.1% return in a couple of months.

Hmmmm, decisions, decisions

Enough Wealth

The Aussie market was up 58 points, or a nice round 1.0% today. All told I've recovered around 2/3 of the loss experienced since the market peaked at the end of February. It will be interesting to see if the market is really resuming it's bull run, or if this is a "correction trap" (I just made that up ;0 ). If the market does keep going up for most of '07 I'll be looking to buy a few more Index Dec-20 5,500 Put Option Contracts so that I've got some insurance against any nasty surprises. I'm still collecting the old paperwork for my stock portfolio so I can work out how much capital gains tax I'd be liable for if I liquidate my holdings and reinvest the funds into a tax-sheltered superannuation account in the new tax year.

Enough Wealth

Sponsored Post:

One of the nice things about sponsored posts is that they sometimes point you to a worthwhile site that you probably would not have come across otherwise. Debt Consolidation News is one such site. It has a nice, clean appearance, and is easy to navigate around the site (although there are some problems, which I'll cover below). The site has archives going back to June 2006, so it has been going for quite a while, and has a wide range of posts about credit cards, debt, getting out of debt, student loans, saving and various other related topics.

Browsing through the site some of the more interesting posts for me included one on "teaching kids about money" which linked to an article with a few good ideas on how to interest your kids in finances and money, and one on the 100 most famous quotes about finance (although I can think of a few other quotes that I'd have included in place of some of the ones on this list!).

However, one short-coming in the site is the very short list of categories. The side bar only lists seven major categories. While this helps retain the clean appearance of the website, I think it's a triumph of style over substance. Once of the beauties of the internet is that you can have multiple links to a page, so there's no reason not to use many categories to allow readers to easily find all articles relating to a particular topic, such as kids, education, student loans, UK, US, or whatever. The fact that there is no site search tool built-in to the site design makes this even more infuriating. While there's plenty of material here to interest you, you'll probably have to browse through all the archives to find the articles that you may want to read. So this site is more suited to browsing through at your leisure than for a quick visit in search of a particular debt-related topic.


Enough Wealth

Well, a correction was well-overdue, so a one-day drop of around 3% in the stock market was no great surprise, although the alleged "trigger" for the event (the Chinese market taking a hit) was a surprise, as is normally the case. On the up-side it makes the $5K I spent on buying 3 Index Put Option contracts on 9 Feb look more like sensible insurance, rather than simply throwing money down the drain.

I'd need to be holding 12 5500 ASX Put contracts to fully cover any losses to my stock portfolio due a bear market (or severe correction), so I'm not fully insured yet. I was hoping to pick up some additional ASX 5500 Dec Put Options as the market continued it's bull run - on Friday the Australian market had closed over 6000 for the first time and the cost of the Put Options had dropped as low as $0.98 at one stage (I had bought the previous 3 contracts for $1.58 on 9 Feb). Although I thought about buying some more Put options last Friday, in the end I didn't bother. (If I had I'd be thinking how great I was at market timing!

Unfortunately the price for the options probably won't be as attractive even when/if the market recovers back to the 6000 level as the increased volatility will make the options more expensive.

This month I selected VRGY from the MagicFormula listing to add to my "Little Book That Beats The Market" Portfolio of US Shares (100% geared). I bought 270 VRGY @ $18.29. My US Stock Portfolio currently stands as:
Symbol P/E Last Shrs Trade Date Paid Comm Value Gain
HRB 25.28 23.83 200 28-Jun-06 24.16 130 $6,074.43 -$ 214.12 - 3.40%
MOT 13.14 19.24 265 24-Jul-06 18.98 130 $6,498.34 -$ 42.18 - 0.64%
MSFT 25.13 29.46 200 21-Aug-06 24.64 130 $7,509.56 $1,098.65 +17.14%
ASEI 24.67 55.95 100 18-Sep-06 49.51 130 $7,131.02 $ 690.80 +10.73%
PWEI 4.11 33.10 150 13-Oct-06 33.29 130 $6,328.07 -$ 166.32 - 2.56%
OVTI 9.72 12.59 300 13-Nov-06 16.47 130 $4,813.92 -$1,613.56 -25.10%
EPIQ N/A 17.98 320 11-Dec-06 15.65 130 $7,333.16 $ 820.29 +12.59%
CRYP 12.23 24.91 200 10-Jan-07 23.92 130 $6,349.73 $ 122.36 + 1.96%
VRGY N/A 18.66 270 14-Feb-07 18.29 130 $6,421.36 -$ 2.67 - 0.04%
9 symbols Total(AUD): $58,459.61 $ 693.24 + 1.20%


As I intend to build up a portfolio of 18 stocks, and then start selling the oldest holding each month and replacing it with a new pick, I'm not doing much investigation of the individual stocks I pick each month. Basically I just run the MagicFormula filter and select half a dozen stocks that have the best looking stats. I exclude any stocks that I feel may have their performance temporarily boosted by the resources boom - ie. any railroad, oil or mining stocks. I then have a look at the 1-yr chart for each of the stocks on my short list, and exclude those that appear to be in a downtrend or starting to drop. With a total holding of 18 stocks I think I'll have enough diversification to basically just pick a random selection of the stocks thrown up by the MagicFormula search tool. After all, it's only supposed to list stocks that have met its "Value" criteria.

My US Stock Portfolio now has the following composition:

Industries:


Stocks:

I remember back in the early days of the "mobile" telephone when the handset was the size of a brick and the battery pack was a separate, even larger brick that took all night to charge up and then only lasted a couple of hours on standby. In those days I was a volunteer for the State Emergency Service and the "duty officer" had the dubious honour of lugging this "mobile" phone around with him or her all weekend.

Times have sure changed since then, with current mobile phone models that fit in your pocket lasting a week between charges, and let you browse the web etc. The other thing that has changed a lot is the cost of using a mobile phone. It's common to get a current model phone for "free" when you sign up for a mobile phone contract - DW and I got two phones (of the same model so that we can exchange batteries, chargers etc) for free under a 12 month contract at $14 a month per phone, with $14 worth of included calls. The included call balance is shared between the two phones, so we can run up a combined phone bill of $28 in calls each month without paying anything above the basic plan rate. As we don't make that many calls, we haven't ever exceeded our included call limit in a month.

In comparison, our landline costs us $32 a month just for the line rental - any calls are extra. In the near future we will dump the landline and just use our mobile phones for all our calls.

If you're looking around for the best possible cell phone plans and phones, have a look at Wirefly. They even have some free cell phones available, and family plans from all major service providers including cingular, T-mobile, verizon, sprint and nextel. You can get two free phones with a family plan. Family cell phone plans (also known as shared plans) can be great value for a single household or family compared to using an individual cell phone plan. A family plans mean all your talk time minutes are pooled for common use, so you'll need to have an idea of the total talk time required for all members of your family.


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