Sunday, 31 December 2017

Don't Set Goals in 2018





Hi Folks

Look, goals are wonderful things, however they only represent 1% of the answer on their own.  I'm sure we have all set countless goals during our lifetimes and most (if not all) have just dropped off over the horizon like a proverbial lemming.

So this year, don't set goals.  All that nonsense about feeling your goals, reading your goals three times a day, imagining your goals, sending out goal vibrations .... blah, blah, blah ..... is useless without the following power-packed truth about goals:

Goals are only achieved by setting and following a system of actions.

Huh? How does that work?  Here are some examples of how this works.

Don't say:  I want to lose 20 kg
Instead do this: My daily action is eating only fresh above-ground veg and unprocessed meats.

Don't say:  I want to write a book by December 31st
Instead do this:  My daily action is getting up at 5:00am and writing 2 pages.

Don't say:  I will save $1000 by next Christmas
Instead do this:  Automate $40 to go to a HIBA each fortnightly pay.

Don't say:  I want to get a raise by November.
Instead do this:  My daily action  is to log into Seek site and apply for one job every week day.


It is the repetitious system of new actions that achieves goals and changes our lives. 

More simply - focus your energy on achieving the daily action, not the end goal.


Happy New Year's Eve to you all - the best of life's blessings to everyone.


Mr HM (Phil)

Friday, 29 December 2017

ING Bank - Changes In March 2018





Hi folks

ING Bank (Australia) has long been lauded as the pinnacle of online banking with zero fees and excellent interest rates etc etc.  ING Bank has been openly suggested by Australia's Barefoot Investor and other financial writers to encourage people everywhere to critically review their bank and their bank fees - what great advice too! Indeed I too have openly encouraged friends to dump fee-riddled banking accounts and defect to ING.

However, I was prowling around the ING site last night looking for some info on their interest rates and came across this change in ING's banking due in March 2018.  See if you can see the change.....

Savings Maximiser


Highest variable rate
For customers who also have an Orange Everyday bank account and deposit their pay of $1,000 or more (and from March 2018, also make 5+ card purchases) each month. Available on one account for balances up to $100,000 with the additional variable rate applied the following month.
Here is the link HERE to check this impending change out yourself.

So, as I understand it, for ING customers like me who NEVER use their ING cards to make purchases (I have 100% automation happening with ING), this means I will no longer get the 2.8% interest rate on my Savings Maximiser account. It will drop (presumably) to the base rate of 1.35%.  A subtle but potentially massive change depending on how you have organised your banking with ING.
If you are not using your ING card/s for purchases (at least 5 times a month) and are relying on the high interest rate in your Savings Maximiser account - beware of these changes dropping in come March 2018. You could be VERY out of pocket with your expected interest earnings.
In fairness, banks can (and do) change their terms and conditions regularly and are totally entitled to do so. They need to stay viable and profitable. Zero criticism from me on that front. However, I am  agnostic in my banking choices. If banking changes negatively impact me, I change banks for a better product.

Toshi  - not impressed with banking changes either.


Time to reorganise my banking me thinks.  

Incidentally, I have been sniffing around NAB (National Australia Bank) website lately and notice that the fees on their everyday accounts have gone and they are offering 2.5% for their online savings account (as long as you deposit each month and do not withdraw - which totally suits me) with no such card spending stipulations as are imminent with ING. Here is the link to NAB online savings account HERE and NAB basic transaction account HERE for your independent research. NAB fees are found HERE too.

Just thought I would drop this post quickly in the interests of keeping our frugal community updated as often banking changes can be easily missed.  Moral to the story is - keep an eye on your bank. Banks are businesses not benevolent societies. Treat your banking with a business-like head - AKA rational and mathematical. Reserve your sentiments and loyalty for your family, friend and pets - not banks.

The slow cooker working its
frugal magic.


Hopefully this info has potentially helped someone.......

Take care and stay nice folks.

Mr HM (Phil)

NB: This information was available and the links working at time of publishing this post. Do your own research and validation of the information in this post as I am NOT a financial adviser.

Thursday, 28 December 2017

A Quick EOY Picture Post



The table set for Christmas brunch


Hi dear folk.

Here is a quick picture post of how we fared on Xmas day.

We decided to do a simple brunch this year......


Eggs, fried mushrooms, baked Tom thumb tomatoes and bacon (!)

....and fresh fruit. We also had Greek yoghurt and honey for
the fruit - yum!

Croissants and muffins. Some of the croissants just might
have been chocolate ones.

Puff pastry and chocolate ganache baked Xmas tree

After that, we cleared the table and had lots of fun constructing and decorating our gingerbread houses (prepared previously from scratch). A glass or three of my deadly Xmas punch added to everyone's dexterity!


The brunch table transformed into a hive of activity....

....constructing and decorating our gingerbread houses.
All of us channeling our inner child.

Some went minimalist.

Some went gaudy 

Some succeeded ..... very nicely indeed.

And then there was coffee and finger sweets.....


Home made from scratch peanut butter balls, strawberry
LCM's, rocky road and lemon slice.

Later on in the evening, once we had digested a little, we brought out the home made cheesecake - but I forgot to take a picture sorry.

We're winding up things here at Mr Home Maker and getting ready for 2018.

All the best of life's blessings to all of you - take care and stay nice!


Mr HM

Saturday, 23 December 2017

Part 4 - Easy DIY Investment Portfolio





Hi folks

So this post it totally unnecessary to building a simple investment portfolio  - it is an interesting extra only. If you are looking for the necessary bits, go back to Part 1 and Part 2 and read those.

Now, it is important that you know that I am not a financial adviser so always please do your own research. I love to write about money, frugality, budgeting and living a simpler life to encourage others to do the same in their own way. I hate the stupid taboo of not talking about money and hope to encourage a helpful shifting of that useless paradigm.


Step 6 - Add A Personal Theme

I know of some very sensible people with very wise portfolios who also reserve a portion of their investments to speculate with - some fun if you will. Perhaps a little day trading, some penny stock trading or some Bitcoin etc.  Not me! My 'fun' comes in the form of 10% of my portfolio dedicated to an investment theme that interests me greatly but which still honours the principles of low fees, good return over the long term and that I can buy and hold.

Here are some worthy themes and the stocks we might buy to support those themes:

  • Property - Try this ETF  - VAP  (Far easier than chasing rent and fixing white ants)
  • High Dividend Yield - try this ETF - VHY  (Vanguard chooses the highest dividend payers)
  • Emerging Markets - try this ETF - VGE  (Invests in countries and regions that are growing)

Of course, that is just three of many themes we could invest in - it is a personal choice at the end of the day. You'll also see that I chose Vanguard ETF's to demonstrate that themes can be supported by wise and prudent products - there is no need to use risky or questionable products for our theme.

I think having a 10% portion of our portfolio dedicated to a theme that really piques our interest is important.  It keeps things fresh and engaging. The only proviso is that whatever this theme is, we must still aim for low fees, long term buy-and-hold and prudence. We need it to be a investment, not a flutter on something we do not understand.

I personally love dividends (as is obvious by the first post in this series showing the wisdom of LIC's) - so it stands to reason the theme I have chosen for myself is that of high dividend yields.  To that end I use Vanguard's High Yield ETF  - VHY as my theme. 10% is allocated to VHY in my portfolio. The wonderful thing about VHY is that it pays those delicious dividends every quarter instead of annually or bi-annually.

Below is what our finished portfolio looks like now. I have inserted VHY for the sake of the illustration but of course you would replace that with your own choice of theme.


Finished Easy DIY Investment Portfolio
  • Cash 10%
  • LIC's 40%
  • International ETF 20%
  • International Hedged  ETF 20%
  • Theme - High Dividend Yield ETF 10%




Now, if this all looks like too much hard work and you would rather just buy one product that does a similar thing then check out Vanguard's Diversified High Growth ETF recently released. It's symbol is VDHG. I also posted bout this product recently HERE.

Anyway, I have had fun sharing how to build an easy DIY investment portfolio with you all. These posts have attracted very little reader interest which indicates to me that that there seems to be a disconnect on how frugality and wise money management easily translates into self management of investments within the simple living community. That astounds me, as the wonderful simple living community have already done the hard work when it comes to money - investing truly is the easy part.

Either that or, the taboo of not talking about money still persists.


Anyhow, take care and stay nice folks - (two sleeps till Xmas!)

Mr HM (Phil)





Thursday, 21 December 2017

Part 3 - Easy DIY Investment Portfolio






Hi dear folk.

Ready for Christmas?  Or do we not mention the war? Tee hee.

So, in our previous two posts we have built together a simple, achievable DIY investment portfolio - if we didn't catch those two posts Part 1 is here and Part 2 is here.  In fact, these are really all that is necessary to create for ourselves a great investment portfolio. If after reading those two posts we are happy - then no need to read this post. (It truly is that simple)

This post and the next are just extras, not necessary, but an interesting couple of additions to that portfolio which might peak our interest.

So, carrying right on again from where we left off the shall we?......


Step 5 - Creating Some Safety

Last time we added VGS to our portfolio giving us a growth component to our basic portfolio. VGS is Vanguard's Global Securities ETF.

Now, as wonderful as global securities are for growth over the very long term, there is the challenge of currency fluctuation.  For instance, if we hold stocks in USA bought with $A and the Australian dollar suddenly rises in value against the US $, then our USA stocks are instantly worth less. Likewise, if the Aussie dollar slumps then our US stocks are instantly worth more. 

What to do? Well nothing really, that is all part of the investing reality and we would ride it out knowing that in the long run the stock market always rises despite the roller coaster rides. If we are really miffed by this currency fluctuation thingy, then we can hedge. Hedge? As in build a protective hedge? Yes - a currency hedge. Hedging will assist with smoothing out some of the extreme fluctuations in the movement of currency. Obviously, the downside of hedging is that is stops some delicious highs as well as saving some bum-burning lows - so it is not a silver bullet.

How to hedge our VGS then? We would simply buy VGAD which is Vanguard's hedged version of VGS. It is hedged in Australian dollars. We would have 50% of our international exposure unhedged via VGS ad the other 50% of our international stocks hedged via VGAD.  We would keep buying VGAD and our LIC's until our portfolio looked like this.


  • Cash 10%
  • LIC's 40%
  • International ETF 25%
  • International Hedged ETF 25%





Keeping Our Portfolio Balanced

A important note about keeping our portfolio balanced to the percentages mentioned above.....don't EVER sell any stocks to achieve this balance.  By selling we will incur possible CGT (capital gains tax), miss out on dividends, accidentally sell at the wrong price and a long list of other possible mistakes.

The most prudent type of investing is to buy and hold - not buy and sell.

Instead, the best way to re-balance our portfolio is to BUY the stock that is sitting the most beneath our required percentage.


Again, we could stop there and this would be a wonderfully easy DIY Investment Portfolio just the way it is with equal amounts of income yield and international growth elements, half of which are hedged against currency fluctuations, to perform well over the long term.

However, in the next post I want to just show yet another easy addition to this portfolio that will add some personality and flair....a theme if you will. (We all like a bit of individualism yeah?) 


To be continued .......


Take care folks and stay nice. (4 sleeps till Xmas)

Mr HM (Phil)


NB: I am not a financial adviser so always please do your own research. I love to write about money, frugality, budgeting and living a simpler life to encourage others to do the same in their own way. I hate the stupid taboo of not talking about money and hope to encourage a helpful shifting of that useless paradigm.

Sunday, 17 December 2017

Part 2 - Easy DIY Investment Portfolio






Hi Folks

We started Part 1 of this topic previously here where we discussed the beginnings of building a simple investment portfolio ourselves.  To recap, we had bought up low cost LIC's that pay 100% franked dividends and also added some important on-call cash (never any more than 10% of our portfolio).

In a pie graph, this basic portfolio of cash and LIC's paying us juicy dividends looks like this:


10% Cash on-call and 90% dividend rich LIC's


So, carrying right on from where we left off the shall we?......


Step 4: Adding Growth Stocks

Although Australian shares have a reasonable record of growing as well as giving us yield (income from dividends), Australia only represents a small percentage of the global share market.  This means that if we have all our eggs in one basket and something happens to that basket, then we are .....in trouble. So, observationally, we see USA in particular and other continents' share markets doing very well over the long term. The USA share market is huge and well established and it would be remiss not to tap into that for part of our portfolio. Besides, we often see international shares doing well when Australian shares are not.

By prudently buying shares in an ETF (Exchange Traded Fund) we can literally tap into many hundreds of well known and robust international companies' shares via a single ETF. I use VGS which is Vanguard's Global Securities ETF which has 60% of its holdings in USA and then the rest over Europe and developed countries. ETF's are the modern version of LIC's (an over simplification I admit). ETF's buy into many hundreds or even thousands of companies' shares under a certain theme, thus when we buy one ETF share we are actually buying a wide diversified part of many, many companies.

Now, buying international stocks is usually complicated with all sorts of rules about tax between each country and laws and forms that we would normally need to fill out and keep track of.  The beauty of Vanguard's VGS ETF is that it is domiciled in Australia, so Vanguard Australia takes care of all the international tax, forms, licenses etc instead of us, whilst we sit back and enjoy the benefits of owning international stocks. Also, built into this particular ETF is a DRP which happens automatically.

We would use the same dollar cost averaging (DCA) buying method as stated in the first post and start purchasing VGS shares in minimum $5000 lots until our portfolio balanced itself into the following percentages of holding:


  •  10% at-call cash
  •  45% LIC's
  •  45% International ETF.  

It would then eventually look like this:


10% Cash at call and equal amounts of Australian LIC and International ETF shares


So by adding in the  International ETF, we have now achieved the following:

  •  Diversified our holdings outside Australia's tiny share market
  •  Tapped into the growth of big robust international markets
  •  Still retained our Australian LIC dividend income
  •  Still retained our at-call cash for emergencies
  •  We now have both yield AND growth components to our portfolio

Be aware though......

International stocks do not have the same high levels of dividend (yield) as our Australian LIC's, so we are relying on the robust share price growth of these ETF's over time to increase the worth of our portfolio. We will see volatility in this part of our portfolio with the value of these international holdings going up and down daily - it can be scary if you are a worrier. Just treat it like changes in the weather - rarely anything to be worried about.
Essentially, the share market with all its crashes and busts has always rallied without fail and gone onwards and upwards ..... and that's what we are tapping into by buying international equities. If the stock market crashes, the very best thing we can do is sit on our hands whilst everyone else is stupidly selling their shares for a loss in fear. Even better still, if the stock market crashes again (which it most certainly will) we can buy up good quality LIC's and international ETF's for bargain prices. It is just like buying up specials when we food shop - and I know you all do that without having to explain why!



Xmas decorations home made from old book pages.

Keeping Our Portfolio Balanced

A important note about keeping our portfolio balanced to the percentages mentioned above.....don't EVER sell any stocks to achieve this balance.  By selling you will incur possible CGT (capital gains tax), miss out on dividends, accidentally sell at the wrong price and a raft of other mistakes.

The most prudent type of investing is to buy and hold - not buy and sell.

INSTEAD, the best way to re-balance our portfolio is to BUY the stock that is sitting the most under our required percentage. So, for example in this phase, we would keep buying up lots of VGS until we had as much VGS ETF stock value as we did in LIC's.  It will take a while, but that's OK and normal.  The portfolio percentages are an ideal guide to aim for when buying stock.  Once we are sitting at our desire percentages of holdings then we just continue to invest in each equally (or in turn) to keep the percentages generally on track.


We could stop there and this also would be a wonderfully easy DIY Investment Portfolio just as it is with equal amounts of income yield and growth elements to perform well over the long term.

However, in the next post I want to just show an easy little addition to this portfolio that will add some extra safety. (We all like a bit of safety) 


To be continued .......


Take care folks and stay nice.

Mr HM (Phil)


NB: I am not a financial adviser so please do your own research. I love to write about money, frugality, budgeting and living a simpler life to encourage others to do the same in their own way. I hate the stupid taboo of not talking about money and hope to encourage a helpful shifting of that silly silence.





Saturday, 16 December 2017

Easy DIY Investment Portfolio





Hi folks

Building an investment portfolio is something easily done yourself. True, there is a requirement for ongoing reading, reflection and planning so we understand what we are investing in, however the most potent factor for success is simply taking action.

Fear stops many people from investing  - fear of ignorance, fear of loss of money, fear of failing, fear of not being smart enough, fear of thinking about money, fear of talking about money. Stop running scared I say to us all!

I have put together a simple way to build an investment portfolio step by step - it is just a suggestion only.  Always do your own research because I am not a qualified financial adviser, I'm just writing all this to encourage people to educate themselves and to smash that stupid taboo of not talking about money.

I have structured this for Australia, because that's where I live and it is what I understand. However the principles are similar world wide.


A simple home made morning tea for two.


Step 1. Buy Some Income

Buying stocks (another word as shares or securities) in big companies that pay nice juicy, regular, fully franked dividends (franking means that the business tax has already been paid on the shares so you don't need to pay it again in Australia - cool!) is a prudent place to start. Dividends are income paid to you from these shares.

Even better is to buy shares in an old-school LIC (Licensed Investment Company) which will own huge bundles of shares in these healthy Australian companies and passes on the benefits of all its share holdings to us viz: diversification, full franking, dividend smoothing, share growth and share yield to its shareholders.

I can assure you that it is one of the most satisfying feelings seeing dividends getting paid into my account twice a year.

AFIC and Argo are two such old and wise LIC's that are worth considering. They pay dividends twice a year, the dividends are fully franked (30% tax already paid for us) and we get some growth in share value over time too. Owning these sort of LIC shares in turn gives us part ownership in scores of healthy high-profit Australian businesses.

While ever we are accumulating our portfolio (not retired) we would religiously reinvest all the dividends we earn by buying more LIC shares with the dividend money we receive every six months. Many companies and LIC's offer a DRP (Dividend Reinvestment Plan) where they will (with our approval) automatically reinvest dividends for us thus buying us more of their shares.  This will save us brokerage costs as the company foots the bill for DRP share purchases.

Australia truly is the lucky country in that our laws state that if a company has paid tax on dividends (franking) then individuals do not have to repay this tax.  This is why dividend investing is still highly achievable in Australia.  Even if the stock market 'tanks' then dividends are still getting paid by LICs (I think some of the very old LICs only missed paying dividends in the dead of the great depression from memory).  I use LIC's like Argo, AFIC and Milton in the same way our US folk here would use bonds in their portfolios .... as a stable, reliable income source within my portfolio that chugs along through thick and thin.


Murder the enemy .....with scissors.



Step 2. Squirrel At-Call Money

Always having money to cover six months worth of basic expenses is prudent. Without this 'stash', dipping into our investment portfolio would be necessary for survival if we lost our job or other source of income.  Having enough money to cover the basics for six months means in the event of a significant life event, that every thing is covered. Dipping into an investment portfolio to cover basic costs is neither prudent or fiscally responsible.

As your portfolio grows, the percentage of at-call cash allocated should not exceed 10%.  At-call money rarely does better than inflation and is a necessary evil rather than a true investment. It's power is that it will prevent us dipping into our investment holdings. There is rarely an excuse good enough to dip into our investment portfolio.

This at-call money needs to be held somewhere that we can quickly access it without compromising the principle lump sum, so a HIBA (High Interest Bank Account) or similar would be ideal. As long as we can get this money released in three working days, all will be well. Tying this money up in Term Deposits and the like defeats the purpose.


A buffet-style breakfast for the family.




Step 3: Pause And Automate

We could stop at this point and have a very respectable investment portfolio of 90%  fully franked dividend yielding stocks and a 10% allocation to on-call cash.  This truly is a respectable conservative portfolio for Australians.  Just keep adding to it, let it grow and allow DRP to tick over.

At this point, making sure our money is automated is essential. Regular repetitive investing is the key to success (doing it - not just talking about it). Aiming for a minimum of 20% of our net income to be sent automatically via our pay office or as an auto transfer from our bank directly into our trading bank account is ideal.  We would check our trading bank account balance monthly and as soon as it has a minimum of $5000, buy another parcel of stocks for our portfolio. Buying regularly smooths out the cost we are paying for our shares over the years and is know as Dollar Cost Averaging.


The next steps in building our portfolio will be how to expand it easily by adding a percentage of  growth assets to our existing income (yield) assets.



To be continued............



Take care folks and stay nice.


Mr HM (Phil)




Tuesday, 12 December 2017

I Nearly Set Up A SMSF





Hi folks

I have been dead keen to set a up SMSF (Self Managed Superannuation Fund) and have been doing oodles of research about it.

I will not bore you with all the dry details but instead will just chat briefly about why I didn't .... yet.


Why I did not set up a SMSF

1. Primarily, the sheer ongoing time and effort required to manage, research, ensure auditing and taxation requirements are correct and timely looks like an enormous time-sucking commitment to me. I'm just not that keen.

2. The fees, even using the cheapest and fairest SMSF Administration company I could find (GreenFrog Super) are far in excess of the fees we currently pay for two individual Hostplus Super Funds including fees for the Choiceplus share trading platform for each.  However, can I say that if you were seriously thinking of using a SMSF Admin company, then GreenFrog appears to have the most flexible and best priced product I can find in Australia at time of writing. (No, I'm not getting paid by GreenFrog, Hostplus or Choiceplus to say any of this).

3. I have no plans to invest in physical property via Superannuation......yet. I am happy with the zero-fuss Real Estate Investment Trust ETF I invest in via Choiceplus - it sure beats chasing tenants for rent and fixing leaking roofs!  However, if I do decide to invest in physical property via Super' then a SMSF  will certainly be the way to go as I cannot do this via Hostplus or Choiceplus.

Setting up a SMSF with the help of your solicitor, accountant and bank would be the cheapest SMSF option in the long run. You would not want to factor in the cost of your own time however - fully self administered SMSF's can be a huge time commitment to accurately kept abreast of all the tax rules and legislation knowledge required. The ATO is very unforgiving of poorly run SMSF's and have no qualms in whacking hefty fines on inaccurate operators.

The next best option would be to set up a SMSF via an independent SMSF administration company who does the set-up for you and also does the yearly reporting and auditing for you too......all for a fee of course. If and when I do set up a SMSF, I would go with the likes of GreenFrog who have transparent and fair flat fee structures and allow you 100% flexibility on every part of your SMSF. (Beware the SMSF Administrator who only allows you to use certain banks, certain trading platforms and products - a probable sign of hidden fee kick-backs and lack of true independence).

If you are not investing in physical real estate properties, then sticking with a very low fee Superannuation company that offers a low fee stock trading platform is the best option by far.  This is what I'm sticking with unless I get lured into buying physical property as a Superannuation investment. (BTW, there are other excellent structures to own investment property within besides Super - a topic for another time)

Yet again, I am not a financial adviser so everything you read here please do your own research on first. I write to encourage folk to get interested in investing and to break the stupid taboos around not talking openly about money.

Take care and stay nice folks

Mr HM (Phil)

Sunday, 10 December 2017

Tailspin and Epic Fail





Ha ha - well, what a disaster!

Back a couple of weeks ago I posted about my keenness to try a spend-nothing challenge here.  I had sincerely hoped that by spending nothing at all that this would assist in taming my inner spending demon (whom I nick-name Smaug) once and for all. How wrong was I.

As you all know, I still consider myself to be a recovering consumerist and whilst I have curbed this habit massively and consistently, I have nevertheless been recently searching for ways to kill off the last voices of that spend-demon within.  Hence the crack at me trying a no-spend challenge.




Instead of strangling the last bits of life out of that inner demon, I accidentally brought it to life again! Aargh! It was nearly as if my total eschewing of money and spending were the tipping point to bring Smaug out of the dungeon screaming and flapping with truly frightening power. This was totally unexpected and rather disheartening actually.

Now, don't get me wrong, I have the hugest respect and admiration for those folk who do no-spend weeks, months and years - but just like using cash, the spend-nothing challenge was not for me. Simply speaking, it made me feel worse, awakened emotions of deprivation, and triggered some old spend-a-holic habits.




So I'm back to my allowance every fortnight.  I guess my $40 personal allowance each fortnight is still pretty frugal in the grand scheme of things.

It is nice to share wins and uber-encouraging content with you all, but I think it is just as important to share failures too. It's called keeping it honest and real. I'm amongst friends anyway luckily.

So, did I give up too easily? ..... or was I wise to bail out? Your collective wisdom on this question would be great folks.


Take care and stay nice folks.

Mr HM




Tuesday, 5 December 2017

My Strongest Money Tip





Hi folks

As a recovering consumerist, the urge to spend is a deep-seated craving that I know will never go away. So, what is my most powerful weapon against mindless emotionally-fueled spending? Well here's the thing - it is not discipline, it is not will-power, it is not meditation, it is not giving it all to Mrs HM to manage, it is not a budget per se or indeed anything rational.

The answer for me is most definitely  - Automation.

Yep. Automation, with the very kind help of some banking technology.


Our friends the possums eating the veggie scraps on the back
verandah at night. I know they are a bit pesty, but.....cute.


So, I have realised that I spend the least when I touch money less frequently and when I do not have any money on me to actually spend.....spoken like a true 'holic. Thus I have stopped touching or interacting with my money for the most part and with great effect. I have automated every single necessary bill payment and savings transfer and I only have a small set amount on a separate card to mess with fortnightly (even that is off limits due to my recent spend-nothing challenge).


Corned beef hot from the slow cooker with white sauce
made from scratch.


How I Automate My Money

Immediately after my fortnightly salary drops into my bank accounts (usually in the wee hours of every Thursday fortnight) it gets allocated out as required via automatic deductions that I have set up via my internet banking or by direct debits - I touch nothing.

1. A set amount auto-transfers to my bills accounts (which has no card access)
2. Set average amounts get Bpay'd off to utility companies and the like from my bills account
3. Direct debits for other bills and expenses have been organised to all occur on that same Thursday
4. Savings and investment amounts get whisked off via automatic deductions to untouchable HIBA's and investment accounts
5. $40 goes to my personal spending key card to last me a fortnight (this is the only money I can justifiably access). This key card is a stand-alone account linked to no other sources of money. Once that $40 is gone, it's gone old chap! Uh huh.

So in any given fortnight, out of my entire senior manager's pay packet I only get to see and use $40 personally - even that small amount can sometimes light the fires of the inner demon spend-a-holic.


The local carols, youth concert and jazz evening in the park.


Automation means all my bills are paid in advance before I get them, investments and savings happen while I sleep, payday is a non-event and the evil Smaug lies undisturbed within my poor tired mind.

I think automating your money might be worth trying - even in part maybe?

I know the cash envelope system works brilliantly for many folks....but not for me.  I have given it a red-hot try and cash is like a nightmare for me.


Take care folks and stay nice

Mr HM (Phil)

Monday, 4 December 2017

Acorns



ACORNS



I joined Acorns some time ago, had a mess around with it and was annoyed that there was not a option to add funds fortnightly on auto-pilot in line with my fortnightly salary (automation of my finances is the only thing that truly works for me), so I stopped using Acorns.

News Flash - Acorns has recently added a fortnightly auto deduction capability, so for me this Robo-Investor is back on the radar big time. It is certainly one of the cheapest and easiest robo-investors to use  (at time of writing this article) in Australia.

However, I remain unimpressed with Acorns' round-up of spare change functionality. I personally account for every cent and simply cannot understand the concept of my account being debited for so-called loose change.  I do not have loose change per se and find this functionality (which is marketed very briskly by Acorns) messy. I do not use this function in Acorns, instead I simply invest a set amount each pay day via direct debit which I set up on the Acorns app.

What I do love about Acorns is that for under 0.6% total fee structure (for the amount I have invested) I can enter the stock market with just $5 and add any amount I want, big or small, whenever I want for no extra charge. There's no entry or exit fees and no spread fees. This is even cheaper and easier than an Australian Vanguard Retail Fund!

Word of warning though, the fee structure for small amounts is steep and I reckon getting your account to over $400 initially should be done very quickly as an initial milestone, and then, up over $1500 as a second important milestone to ensure fees are reasonable. In fairness however, Acorns goes to pains to explain their fee structure in their PDS (Product Disclosure Statement) and remembers to factor in the MER (Management Expense Ratio) of underlying ETF's (Exchange Traded Funds).

At the end of the day, I much prefer my money to be invested in the stock market via a portfolio of ETF's (which is exactly what Acorns does) than moldering in a bank account whose return is less than inflation. Pfft!

Acorns offers several diversified portfolios starting conservatively through to aggressive as well as a socially responsible portfolio too.  I have chosen the aggressive portfolio as I do not mind the fluctuations as the longer term result is what aligns with my investment plan.  Actually, I do not the think Acorns' aggressive portfolio is actually all that aggressive due to the percentage of bonds and fixed interest used (10% currently) which softens this portfolio back to High Growth I feel. Aggressive to me means 100% stocks and no bonds or fixed interest component. (Yeah, whatever)

The Acorns Aggressive Portfolio is made up of the following ETF's:

54% Large Australian companies (SPDR S&P/ASX 200 ETF)
23.5% Large Asian companies (ISHARES ASIA 50 ETF)
7.10% Large European companies (ISHARES EUROPE ETF)
5.4% Large USA companies (ISHARES CORE S&P 500 ETF)
4% Australian Corporate Bonds ETF
3% Australian Government Bonds ETF
3% Australian High Interest Cash ETF


I do not use Acorns for huge amounts, nor as a serious ex-superannuation investment platform. I use it as a better performing option to a HIBA (High Interest Bank account). To be specific, I use it for my ever growing 3-6 months of living expenses account ..... which some alternatively call their Mojo account whilst others call it their F-you money (tch tch), others refer to it as their self insurance account.  I have even heard of people using their Acorns account to save lumps sums of $10K before then investing this directly into LICs or ETF's.

I've put a couple of links though out the text to the important info about Acorns so you can do your own research (always do your own research or seek unbiased qualified advice) because I am not a qualified finance person. I simply write about personal finances to help break the stupid taboo of not  talking about money and to encourage others to get interested in wisely handling their own hard-earned money.

By the way, Acorns are paying me nothing to write all this.


Take care folks and stay nice

Mr HM (Phil)

Saturday, 2 December 2017

I'm Prepping For Next Christmas





Hi folks

Well, I've started prepping for next Christmas....yep, Christmas 2018.

This Christmas is already paid for in full and we have done it yet again credit card free! Woo hoo. (Thanks to all the wonderful encouragement from the frugal simple living community world wide).

So, we have already set the budget for Christmas 2018 and chunked it down to a fortnightly amount and the first installment has already been put aside from last Friday's pay packet into a high interest bearing online bank account .  It will not be touched until late November next year. I've automated this fortnightly installment so it just happens without my involvement - this is critical for me as a recovering consumerist.


Bake your own bread. At 50 cents
per loaf, what's not to like?


Once upon a time, not that many years ago, Christmas was a 100% credit card affair with some fun un-payable laybys thrown in and a couple of maxed-out overdrafts stirred in to that mix and most certainly an unpaid bill or two also just to add some spice to the season! Gosh, how far we've come since those days.

If you need to set aside (say) $1000 for Christmas .... then start this weekend and commit $20 a week and the $1000 will be yours by mid November next year. True story.

I am happy and relaxed, Christmas this year is paid for already - I am already enjoying the season the way it should be enjoyed.


Budgets save lives - it's true.



Take care folks and stay nice.

Mr HM

Monday, 27 November 2017

Investing For Income - A Lost Art?





Once upon a time, investing specifically for drawing an income was pretty much the standard way to invest in the stock market.  Things have changed however both with investor styles and how businesses deal with their profits. Nevertheless investing for income (return), while no longer 'sexy' is still an important investment approach.

We've all known or read about times past when widows lived comfortably off their Merrill Lynch accounts or similar - all down to a lifetime of investing by their late manager husbands/fathers (yes, back in the era of the single male breadwinner) who inevitably died of the then ubiquitous heart attack in their very early 60s. However, this returns-for-income investing approach seems to have gone out of vogue nowadays (the investing part I mean, not the heart attack part!).




These days, investing for pure growth rather than returns is much more in vogue ..... and for a long list of valid reasons that I will not delve into at all in this post. Day trading and stock growth watching over the last 30 years have certainly encouraged growth-investing too (just look at the news and see what it shows - that's right, growth and stock value fluctuation). Investing for growth is all very front-of-mind these days.

However, consider for a moment  the benefits of investing for income returns - as follows:

  • Dividends still pay despite stock value
  • Fluctuations in stock value are less important
  • Dividend franking (paid company tax) is highly desirable for personal tax purposes
  • Dividend reinvestment can be entered into 
  • 100% dividend franking (fully prepaid company tax) is achievable
  • Provides a regular income for those requiring it
  • Flexibility to either reinvest the dividends or take them as cash 
  • Allows your portfolio to be either growth or return focused (see previous point)



I personally have 1/2 my portfolio geared to income returns via dividends and deem this as the conservative and stable part of my portfolio (I'm not a believer in bonds as true long-term investments). Luckily, Australian companies pay much higher dividends on average to non-Australian companies thus making the dividend/return approach to investing very achievable for Australians. 

Now I am not a financial adviser, so definitely do your own research on the topic. I only write this to encourage you all to research and get interested in investing wisely the old fashioned way ..... at least in part.

Take care folks and stay nice

Mr HM (Phil)

Saturday, 25 November 2017

My Personal Spend Nothing Challenge





Hi Folks

I have been impressed over the years at some people's efforts with their personal spend-nothing challenges. So it is time for me to bite the bullet and challenge myself on this too. I think I am ready....ish.

I have decided to only challenge myself and not the family as I see myself as the most struggling of recovering consumerists within the family.  This challenge will help me overcome some more consumerist demons within.....I'm hoping. It just may build some self discipline muscle (!).

A full year spend-nothing challenge is way out of my realm of ability to tackle up front, so instead I am going to do it step by step. Here is the initial plan.


  1. One full week spending nothing
  2. One fortnight spending nothing
  3. One month spending nothing





After that, any longer stints will have to be discussed with my family as it will impact them unless they are aware. I have not told them about this initial set of challenges - I wonder if they will notice?

By spending nothing I mean - spending nothing on myself or any purchases outside normal bills and household expenses. Yes, I know, it is a fairly soft version - but horses for courses to start with you know!

I'll keep you all posted.  First one starts Monday!


Take care folks and stay nice.

Mr HM

Thursday, 23 November 2017

Exciting News - VANGUARD AUSTRALIA





Hi Folks

Three days ago Vanguard Australia launched a suite of new products. These products are a game changer for Australians in my opinion.

Check out this article from the Financial Standard



A beautiful 1940's dining room in an airBnB we stayed at recently


The new Vanguard suite has four Diversified Index ETF options:

  1. Vanguard Diversified Conservative (VDCO)
  2. Vanguard Diversified Balanced (VDBA)
  3. Vanguard Diversified Growth (VDGR) 
  4. Vanguard Diversified High Growth (VDHG)

Our US readers have had access to a long list of cheap US Vanguard offerings for many years now, however Vanguard's Australian arm are still growing and evolving. Generally speaking Vanguard are known as arguably the holy grail of investment companies world-wide and are committed to low costs and prudent investment policies.


Our airBnB 1940s bedroom - on the Hay Plains Australia


I have been looking at so many differing non-direct share/ETF options for investing outside of Superannuation including Robo Investors like Stockspot et al, Vanguard Australian Retail funds etc but the fees for these non-direct share/ETF investment products have been a little too much for my liking and thus I have defaulted to buying ETF's and LIC's directly which only incur the cost of the trade and the underlying MER (Management Expense Ratio - a fancy name for the inbuilt fee).

Whilst I may still stick with directly trading in ETFs and LICs (this is still the cheapest way), Vanguard Australia's introduction of these four new Diversified Index ETF's is a real game changer for those of us needing and wanting to invest but are too time/inclination poor (or even fearful)  to be mucking around building a portfolio. Choosing one of these four new options and investing regularly may just be the answer to the simplest way to build wealth outside of superannuation in Australia. Vanguard Australia has created a real game changer with these four new offerings.


A 1940s cabinet full of local jams, jellies and chutneys for sale


Theoretically I would choose the Vanguard Diversified High Growth (VDHG) option as the 90% growth appeals to my needs. 

Why?
  • At 0.27% MER (for every $1 million invested you would pay $2700 yearly) this is a reasonable and fair fee for its excellent inbuilt growth diversification strategy using both international and Australian securities. 
  • 90% growth assets and 10% income assets (potentially tax effective)
  • Australian Domiciled, so no annoying international W-BEN8-E forms - it is all done for you by the fund.
  • It's Vanguard - highly trustworthy company
  • A full portfolio in one easy aggressive growth product.
  • Offers DRP (Dividend Reinvestment Plan)
  • I suspect these ETF's are subsets of Vanguard Australia's Wholesale Diversified Funds of the same name. If so, then the return, stock holdings and structure of these funds are excellent.
For Australians, two of the barriers to getting into Vanguard's Diversified Funds were the $500,000 minimum entry into their equivalent wholesale funds or the 0.90% MER on their equivalent retail funds.  These four new offering have instantly removed those two barriers ....well done Vanguard!

The 1940's fireplace with all the proper period utensils


Here is the link to Vanguard Australia hereScroll to the bottom of the list and you will see them with "new" next to each offering. Also, Vanguard's write up here.

Of course I am not a qualified finance guy, so all this information has been for sharing and encouragement only and cannot be classified as financial advice. Do your own research! Oh, and I am NOT getting paid by Vanguard either.


Take care and stay nice

Mr HM (Phil)

1940's single twin beds
P.S. We recently stayed on the Hay Plains as we were travelling to Adelaide. We stayed in an air BnB all done out in 1940s style.  It was just wonderful.  I felt totally at home.  The post header picture is taken from Granite Island looking back along the jetty to Victor Harbor South Australia.



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