Tuesday, 29 August 2017

Get A Job and Buy A House, Right? – WRONG!

So folks, we delve again into another ancient Jewish discipline that is so diametrically opposed to what we normally teach our children. This one was a real revelation for me.

We normally encourage our children to become educated as soon as possible, get a job, buy a house, settle down, have kids etc etc. Our sons and daughters who follow this order of life are deemed as sensible and wise – and so they are.  Well, that regime is not deemed wise with Jewish folk – well at least not the ‘buy-a-house’ part of it anyway. Here’s how smart Jews do it differently.

My good friend Kathy gave me this beautiful chook book.

If you were in a wise Jewish family you would have taught your children from tiny about the Jewish Jars (a post for another time) and every cent they would have received for birthdays, Purim, Hanukah etc would have had 20% taken out and popped away for investment – small coinage really, but instilling a vital wealth-principle from very early. As soon as Jewish children get their first part-time job in a call centre or as a casual part-time intern in a law firm or start their own micro-business etc (yet another Jewish insight for another post – AKA suitable jobs for young people) their parents and community then actively encourage them to have (as a minimum) a 60% savings rate i.e. spend 40% and save 60% of the earning from their part time jobs.  So, whilst Jewish children are at high school and university they are actively socking away 60% of their part-time earnings until they finish their studies and get a full time job.  This represents a 60% savings rate of their own money from the age of approx 16 through to 22 when they finish their studies. It is entirely reasonable, possible and normal for a Jewish child to have socked away at least $50, 000 dollars in this 6 year period.

Home cooked meals - save a fortune

Oh!  A deposit on an entry-level house you say?  No. Wrong. That $50K is invested and not touched nor actively added to besides methodically reinvesting earnings from it every quarter. When that Jewish child is old, there will be at least $1.2 million dollars sitting there quite aside from any other financial or life decision they have made since the age of 22. Over $ 1.15 million of this is passive earnings. Jews totally understand and leverage the vast power of time. Time can only be truly utilised by the young.

So at 22 years old, with their degree done and dusted, 6 years of solid work experience notched up, a full time job, a future $1.2 million dollar nest egg already cooking, Jewish children start their adult life just like all the rest of our children. The hidden and unspoken difference is that they are already wealthy in their own right and by their own work. Yes, they will marry, get a mortgage, have kids, travel, have hobbies, have ups and downs, get sick, chase a career, have wins and losses just like the rest of us – but as mere adolescents they have already amazingly taken care of their basic financial future.

Prep two meals at once - frugal much

In short – wise Jewish families facilitate their young people to invest UP FRONT before they start their adult life in earnest. Wise Jewish children start life with their wealth predetermined by their own habits, with their own hard-earned money and supported by a like-minded community. By 22 they are already seasoned and habitual savers, skilled in basic investments, old hands at delayed gratification, practiced frugalistas and….wealthy.

How’s our 22 year old children by comparison?

This principle blew my mind when I found out about it. I stumbled across it in a journal which benignly stated that Jewish families prefer their children to invest early in life before committing to home ownership … my mind instantly snapped ‘on’ as if someone had just switched a huge floodlight on and I instantly researched deeper. Astounding. Practically any teenager can do it. Any parent can support it. It is so profoundly simple too. Why hadn’t I thought of this myself? Gosh.

Take care folks and stay nice of course.

Mr HM (Phil)

Wednesday, 23 August 2017

Inevitable Wealth - A Letter to My Daughters

To my five darling daughters -

How thankful I am to have you all as my daughters. You are all unique, sassy, well educated, confident and smart. You have survived the bumblings of my attempts at fatherhood and despite this have turned out fine young women. You all are unique and significant.

There will be many things that I will only be able to look on and encourage you about in life - ultimately you will need to live your life and find your balance. Now as young adults I no longer will be able to brush off a grazed knee or concoct some fanciful notion to cover an ugly life-truth, nor will I be able to figure out how to ward off future illness, sadness or unsavoury life events for you. Nevertheless, I intend to be around for a quite while - but not for ever.

I commend to you all the power of being gracious, of poise, of times of quietness and reflection. I counsel you all to consider the effectiveness of emotional intelligence and the virtues of being wise as a serpent yet harmless as a dove. Be street-smart but never lose your dignity. Commit to bringing the best out in others as this is a far wiser use of your energy than trying to change others. Be frugal, yet seek quality. Be wise, but humble. Include all, but rely on none. Seek contentment punctuated with occasional bursts of happiness as this is very achievable and is the foundation to a good life. Be unfailingly kind to each other.

I learned late in life the basic rules of wealth and thus now exhort the five of you to heed these powerful habits now in your early lives.  These five habits of wealth cannot be employed later in life with the same astonishing outcomes compared to employing them from the outset of your working lives.

These five habits of wealth are as follows:
   1. Invest forever one fifth of every dollar that comes your way.
   2. Actively and openly spend one tenth of your income on your community for its betterment.
   3. Spend the rest on living with delight and quality
   4. Specialise in your chosen fields of work.
   5. Arise with the sun and be mindful of the moon

These five habits will quietly make you inevitably and unostentatiously wealthy, philanthropic, significant community contributors, discerning consumers, indispensable experts in businesses and motivated healthy achievers.

Wealth is an immeasurably important servant to many important factors in life - these five habits will make you worthy and capable administrators thereof. The unwavering application of these five habits will mean your wealth is inevitable.

I regret having not taught you these things from childhood and embedding them soundly into your psyches - but I simply never knew them to be able to teach you. Nevertheless, all is not lost as I now hand these five powerful habits across to you - not to talk about, but to do. Your bit is to outwork the five habits into your lives in your own particular ways. I will encourage you all the way.

The beautiful thing about these five habits for you five women, is that they will not only make you prosperous but all those around you too. Wherever you go, these five habits will create growth, significance, empowerment, gratitude, loyalty and improvement for all. There will be astounding outcomes, of this you have my word.

All my love to you my dear daughters. Of a surety the courage and savviness of our forebears has come alive again in you all ..... and the world awaits you.

Pa  xxxxx

Tuesday, 22 August 2017

The $500,000 Latte

Yeah right - who would pay half a million dollars for a latte?  Well, as it turns out....many of us.

Most of the folk I work with buy a coffee every day, sometimes two or three depending on the day's stress levels. Not only that, I see whole cross sections of folks walking around with coffees in hand - everyone from students to retirees. Oh, and there are also baby-chinos just to make sure kids are socialised into the coffee community from very young.  Now, don't get me wrong because I love a coffee as much as the next person however when I do the math those coffees simply do not taste as good.

So, I did some math - here tiz:

$5 per day on coffee = $35 per week
$35 per week invested for 45 years of a person's working life would have returned (using a basic 7% return rate and assuming reinvestment of returns) a whopping $575,210.00

How does your latte taste now?

I'll leave ya'll to ponder it.

Take care and stay nice folks


P.S.  Being a recovering consumer addict I can confidently and freely admit to you all that I would have spent this amount on daily habitual purchases just like coffee in my life time - easily...and most probably much more.  

Sunday, 20 August 2017

Generational Wealth From Scratch

Freshly made strawberry jam - to die for.

So many of us come from very hard working families who sent us off into the world to repeat the process of working hard, perhaps saving a little bit and living honourably.....and our children will do the same.  We are unconsciously repeating the work ethic we have been taught.

Jewish folk however have a different take on work and life. Very different. So different in fact that even under dire circumstances (e.g. attempted genocide) they can start from scratch and within a generation a meaningful life and wealth has returned to be passed on and added to from generation to generation.

Hello Dolly slice fresh out of the oven

My studies of all things Jewish has taught me that Jews see wealth as a spiritual thing - not in the same vein as the Christian prosperity gospel, but rather in the sense that because it is not physical it therefore automatically is spiritual. (I refrain from listing copious quotes from the Torah here!). Wealth is spiritual in the Jewish psyche simply because it can be used very easily to directly positively impact their families, neighbourhoods, cities and countries.

Good, plain, nourishing fare

So many things that we enjoy like excellent medical care, hospitals, education, libraries, universities, good roads, security, peace and excellent infrastructure all cost money...lots of it. Because of this you will rarely find a Jew working on their car or mowing their lawn on a Sunday morning, rather, Jews ensure they earn sufficient income to pay for a mechanic and a gardener. It is a good and spiritual thing to give another person a livelihood and the dignity of a profession and a respected place in a community.

The Jewish community has operated for 1000's of years under the understanding that a happy, safe and thriving community required money (and plenty of it) to circulate. Creating a healthy, happy and secure neighbourhood is a spiritual responsibility of every Jew - they take it very seriously for the most part. Their extra days' work each week gives them the extra 20% of income to invest back into the neighbourhood either directly or indirectly to make a thriving community and to also build personal wealth over the long term.

Matchsticks filled with hot strawberry jam and whipped cream

Jews also never or rarely retire - work and business are the highest moral thing that can be offered to a community and Jews relish working until they can no longer. Knowing that they are providing livelihoods to so many in their neighbourhoods and are often the trusted managers of so many folks' investments is a serious business giving Jews a very deep sense of meaning and satisfaction to life.

Their own invested 20% across a lifetime funds their old age once they literally can no longer work or run a business.  At a 4% draw-down in very old age, this lifetime of investment is not diminished and can then be bequeathed to the next generation who they have taught from childhood to manage money in exactly the same way....this wealth thus snowballs from generation to generation.  In the event of an antisemetic wipe-out, Jews simply start again using the 20% principle and the deep-seated set of beliefs regarding money and within a generation the cycle is reestablished.

This is why Jews can hold and influence over 40% of the world's wealth whilst representing less than 1% of the world's population.

Hot self-saucing pudding and icecream

We too could  break that cycle of 'hard-work-and-only-a-little-to-show-for-it' if we adopt the basic Jewish principles of wealth and teach them generationally to our children. It can be done in a single generation. If we all did it, we would be awash with funding for medical research, great hospitals, excellent universities, wise innovation, socially progressive institutions, efficient food production, affordable sustainable and renewable power sources, legacies for the next generation.....the list is endless.  But no, our eyes are looking to the ground like the ox grinding out the corn instead of committing to ensuring good, moral, tangible things are achieved on earth as they are in 'heaven'.

Ovaltine was 1/2 price - stockpile time.

Head spin??  It is a true paradigm shift that takes a while to settle into the mind.

Take care folks and stay nice.

Mr HM (Phil)

Sunday, 13 August 2017

Investing - Teach Yourself

I am a sucker for 1940's gentlemen's fashion

Hi folks

Investing can be scary, confusing, frustrating and time consuming. However the most important thing with investing is educating ourselves before we invest a single cent.

I have constructed a very basic reading/research list for those of us who have never invested - hopefully it will begin a lifelong self-education and interest into wise investing:

Cooking and freezing meals in bulk

These links below are mainly relevant to Australia (because that is where I am!) but the basic principles are the same world over - just click on the item in the lists below to take you to the article or site.

Investing Research:
Bogleheads - Investing in Australia
ASIC - Moneysmart - Investing
How To Start Investing - Scott Pape
ETF's How to buy - BlackRock

Investment Products Research:
Vanguard Australia
iShares Australia

Obviously and importantly, I am not a financial adviser nor am I affiliated with any of these companies or products that I have linked above, nor have I or will I get paid for this post by anyone. I am simply sharing these links that I found useful in the beginning of my self-education into investing.

You will note there is little in these links about day trading, individual share trading or speculative trading as this type of trading is not of interest to me. My investment plan is long term, buy and hold, reinvest and diversification across the next 20 years or more.

Never clown around with investing - commit to life-long learning

Hopefully this tiny handful of links will start your wider journey of self-education into wise investing. All those hard-saved pennies from being frugal need to be put to work - you've done your bit in saving them, now they have to do their bit and multiple faster than inflation.

Enjoy, take care and stay nice.

Mr HM (Phil)

Saturday, 12 August 2017

Where I Keep My Money and Why.

Bank accounts, Superannuation and investments .... phew, there are so many ways to tackle this topic so I just thought I would share what banks and financial institutions I currently use. Of course, if much better deals arise or the conditions on my current choices alter then I will change this list without any sense of loyalty. With financial institutions, it is all about the math and the quality of the product for me.

So here goes:

ING Bank :

Online Savings Account #1 (high interest + bonus interest + occasional conditional bonus interest ):
This holds our self-insurance fund (aim for enough to cover 3-6 months of all living expenses).
This account has no fees.

Online Savings Account #2 (high interest):
This houses our $2000 emergency fund and I just let interest accrue.  This is specifically for immediate emergencies that are not a known part of the budget (e.g.  fridge or washer die ).
This account has zero fees.

Transaction Account:
This holds 1 month's worth of bill money (in advance) and each payday an exact amount gets deposited directly by my pay office into it to cover all our known bills.  All direct debits for bills etc come out of here too and other bills are paid out of here via Bpay, transfer or by debit card. I automate as many bills as possible.
I deposit exactly 60% of my net fortnightly income into this account.
This account has zero fees.

ME Bank

Online Savings Account (high interest + bonus interest)
This is our savings account for big ticket planned purchases (e.g. holidays, lounge suite, Thermomix). I deposit exactly 10% of my net fortnightly income into this account.
This account has zero fees.

Transaction Account:
This is my spending account - no questions asked. This has only been a very recent luxury as every cent has been focused on debt reduction, building an emergency fund and a self-insurance fund . Do not open one of these type of accounts until debt, emergency fund and self-insurance fund are sorted.
I deposit exactly 10% of my net fortnightly income into this account.
This account has zero fees.


I use Acorns to deposit small amounts directly into a aggressive share market investment fund (very similar to a managed fund but you can start with as little as $5).  The fee structure is comparable to a managed fund as are the predicted and historical returns.
I invest a fortnightly amount into this fund and withdraw it all every 5 years to purchase a new (or new-to me) car.
The total fee structure for this investment works out at approx 0.5%

HostPlus and ChoicePlus Superannuation:

In Australia, employers are mostly required to contribute 9.5% of our annual salary by law into a superannuation fund. I am astounded at how many Australians show very little interest in their superannuation funds or are even aware at the choices they have or the huge pitfalls of accepting the default options.

50% of my Superannuation sits in HostPlus Indexed Balanced fund and the other 50% sits in the self-investment arm of HostPlus called ChoicePlus (they are linked). I have my own self managed portfolio of stocks, ETF's and LIC's happening within Choiceplus. Both have very different fees structures which are critical to fully understand.

NAB Trader (National Australia Bank):

Online Trading Account:
A slave account used to hold money that I am using to make a stock market trade. Dividends (if not auto reinvested) also get paid into this account. Trading fees are also deducted from this account too. This account is linked to the NAB Trader online saving account.
The banking component of this account if free.

Online Savings Account:
This account is linked to the trading account and pays reasonable interest on monies waiting to be traded on the stock market. It is wise to have your money earning interest awaiting a down turn in the market which is often the best time to buy quality stocks. It is also a good place to build up investment savings ready for a monthly, quarterly or half yearly purchase of stocks if you are using the average cost method.  I use a mix of both methods as each has merit and I simply do not have the time to be staring at the stock market day and night. Once I am ready to make a trade I simply transfer funds to the Trading Account and make my stock purchase.
20% of my net fortnightly income needs to go into this account.
The banking component of this account if free.

My investment plan is VERY boring - LIC's, ETF's, Indexed Funds and a small (but steadily growing) portfolio of high dividend yielding stocks. I am a lover of DRP's (dividend reinvestment plans) too. I never day trade. Buy wisely and hold forever is my ideal investment strategy.

Tax wise, it would be a little better to put all my investments inside Superannuation however the downsides to Superannuation are that the money is locked away and not accessible, the stock trading investment options are often limited and fees are payable on top of normal stock trading activity. Beneficiary payments out of Superannuation can also be tricky too and once into retirement phase the fees Superannuation charges are horrendous. The other risk factor of using Superannuation is that the rules are always changing and I am not comfortable having all my eggs in one basket. Anyway, that is my opinion only so don't count it as qualified advice - do your own research.

Biscuit Tin Buried In Back Yard

Nope.  No talents wrapped up and buried for me thanks very much!

Anyway - so there it is.

No point being frugal unless there is a purpose for the savings.

Frugality needs a purpose and a plan. What to do with all those saved pennies from being frugal? Well now you know how I do it.

Take care folks and stay nice

Mr HM (Phil)

Please note the following carefully:
1. I am not a financial adviser
2. I am not affiliated with any of these products (no $$ have or will come my way!)
3. Information shared here is for encouragement and opinion sharing purposes only and is not financial advice.
4. I live in Australia so this post is from an Australian perspective.  Things may be very different in your country.

Monday, 7 August 2017

The Ignored Commandment

Beautiful fresh chemical-free
home made soap.

Hi folks

So this post might create some strong opinion - but hey, here goes.

As we probably know, the 10 commandments of the Christian Bible are actually originally the Jewish commandments given to the Jewish leader and prophet Moses direct by G-d on Mount Sinai.  For all intents and purposes these 10 commandments have played an enormous role in the shaping of western society.

Actually, from a Jewish perspective, there are 13 separate statements that make up these 10 commands. The 10 commandments are the basis of Jewish law, declaring G-d's universal and timeless measure of morality unlike the other 613 commandments in the Jewish Torah, which include detailed duties and ceremonies such as the dietary and sanitary laws etc etc.

Nourishing home made bread for 80 cents a loaf.

Here is the very common paraphrased Christian version of the Jewish 10 commandments

  1. You shall have no other gods before Me.
  2. You shall make no idols.
  3. You shall not take the name of the Lord your God in vain.
  4. Keep the Sabbath day holy.
  5. Honor your father and your mother.
  6. You shall not murder.
  7. You shall not commit adultery.
  8. You shall not steal.
  9. You shall not bear false witness against your neighbor.
  10. You shall not covet.

But here is the problem - this Christian paraphrased version leaves out an important Jewish context, especially on commandment number 4.

The easiest way to educate ourselves on the full context and content of these 10 commands is to read them as they are found in the Jewish Scripture.  Most of us however do not own an authentic copy of Jewish Scriptures but many of us would have a Christian Bible hanging around somewhere - the record of the Ten Commandments can be found in the Old Testament of the Christian Bible, both in Exodus 20:2-17 and Deuteronomy 5:6-21.

The joy of freshly laid eggs

Contextually, commandment number 4 actually reads like this (even in a Christian Bible version):

Remember the Sabbath day, to keep it holy. Six days you shall labour and do all your work, but the seventh day is a Sabbath of the LORD your God; in it you shall not do any work, you or your son or your daughter, your male or your female servant or your cattle or your sojourner who stays with you. For in six days the LORD made the heavens and the earth, the sea and all that is in them, and rested on the seventh day; therefore the LORD blessed the Sabbath day and made it holy.

Now you can instantly see that the oversimplified paraphrase of commandment number 4 is just plainly misleading. An integral and clearly-stated part of this commandment is that we work six days per week. God worked six days a week and likewise should we. We clearly get all happy and excited about the 'sabbathy' do-nothing bit where we just rest up and kick back, yet we conveniently ignore that part of the commandment that clearly states that we must be working six days a week. Gulp. Change the subject? Awkward. (A tidal wave of excuses and protests breaks over me!)

There is so much to be discussed and debated about this subject and this post is getting rather long....however it is there as plain as day - work six days a week.

The total satisfaction of
home grown produce

Mathematically speaking, working six days a week earns Jewish people 20% more income than the rest of us who work five days a week. The implications are endless. The realisations are deep. That 20% is the difference between poverty and wealth. I have SO much more to elaborate on this topic, but it needs to wait for another time to be truly powerful.

We will reference this post again many times over in future posts as we further explore the Jewish phenomena. 

Something to think through. Try not to immediately judge this Jewish fact - just let it sink in.

Take care folks and stay nice.

Mr HM  (Phil)

Sunday, 6 August 2017

Frugality Is Not THE Answer

My new wallet - it has many zippered compartments for cash enveloping
and oodles of card space too. It also holds my iphone too and is not bulky.

Hi folks

So, as you all know I have been studying up copiously on the Jewish 'take' on life due to the fact that Mrs HM is of Jewish extraction - the learnings thus far have been astounding and as yet I am only scratching the surface. The fabulous thing about all-things-Jewish is that there is more opinions and perspectives than there are Jewish voices! Ha ha - it keeps it interesting to say the least.

Frugality and Simple Living have been a big paradigm shift for Mrs HM and I over the last few years and have made a vast positive change in our financial lives. This change has also manifested so many knock-on positives in other parts of our life too. However, I have recently learnt that it is not enough, nor is frugality the single 'answer' to a financially meaningful life - far from it in fact.

Home made dessert

As it turns out, frugality practiced by itself can be rather damaging and regressive. Frugality practiced in isolation can actually create long-term financial stress.  Frugality can be all-consuming .... and therein lies the problem. Nevertheless, frugality IS a vital ingredient of a larger triangle of disciplines required for a good life - a bountiful life - a meaningful life - a memorable life.....but again, not in isolation.

Frugality needs to exist in equal proportion to two other vital financial disciplines. The three disciplines that create a strong basis for a financially meaningful, bountiful, memorable and good life are:

Frugality - Earnings - Investments

Each of these three disciplines must be given EQUAL time and attention.

Spending all our effort on single-mindedly earning more money is a well known ugly life pathway. Allotting all our life efforts to sniffing out the needle-in-the-haystack of lucrative investments is also pretty dodgy. In the same way, being obsessed with frugality just turns us into an unlovely Scrooge.

A special night out and a special dessert.  Frugality
makes the occasional treat 100% affordable.

However, a wise balance of all three will create a firm financial foundation on which to build  and grow our lives, meaningfully contribute to our neighbourhoods and society and be free of the clutches of consumerism.

I have had this balance VERY wrong over the last few years and it is now being addressed.  This triangle of financial strength gives us three anchor points on which to move forward and grow.

Do you have a coin jar too? Ours is a recycled coffee jar.

I am going to elaborate much more on these three disciplines in future posts and how they are so powerful as a symbiotic union and yet how destructive they are by themselves.  Basically, doing frugality all by itself will not improve our long-term financial situations. Likewise, just focusing on earning more money will not curb wastefulness or addictive consumerism. Similarly, being obsessed with investing is pointless if there is nothing to invest!

A vital key to long-term financial empowerment is a balanced and wise attention and commitment to prudent frugality, continued increase of personal income and dedicated life-long investment habits.  There is no grey area here. Remove a single one of these three disciplines from the equation and our finances will stall pretty fast - conversely, ensuring all three disciplines are attended to will see exponential and continuing financial improvement that will live on generationally.

So much more on this and heaps of other topics in the future folks.

Take care and stay nice!

Mr HM  (Phil)

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