Friday, 28 December 2012

Bloomberg Game Changers' series - A great way to procrastinate

If you're sitting in your office in the period between Christmas and New Year with little to do and you're interested in finance, then an interesting way to waste time is the great Bloomberg Video series - Game Changers.

The series covers entrepreneurs and giants in the worlds of business who have changed the way in which they changed the industries that they have worked in.  Most of the series that I have been watching involve business people however the series is much more broad than this - it also covers authors such as JK Rowling, political commentator and comedian John Stewart and singer Jay Z.  I confess that I found the John Stewart profile fascinating but the others were not really my cup of tea.

You can visit the main site here (all the videos are free) however I have embedded below a few of the clips (which are hosted on YouTube as well).  To be honest, I would not really browse YouTube for these clips as it comes with advertisements while Bloomberg is almost advertisement free.  Each of the videos is between 25 and 50 minutes in length.   The ones I found most fascinating were not the ones whose stories are well known (e.g. Warren Buffett and Steve Jobs) but rather those who we know are famous but are a little more obscure (such as the Koch brothers).

A selection of my favourite videos

Warren Buffett 

Rupert Murdoch

I could not find a version I could embed of the Game Changers episode on Rupert Murdoch so I have included a link to it here.

What I found fascinating when I watched this episode was how much Jeffrey Archer, the renowned novelist, had based one of the two main protagonists in his book The Fourth Estate on Rupert Murdoch.  If you have some free time and want to read a fictionalised account of his life and his rivalry with Robert Maxwell then I suggest reading that book.

Koch Brothers

As mentioned above the episode on the Koch Brothers was one I found fascinating because I knew so little about them.  Like the Rupert Murdoch episode I could not find this episode on YouTube so have linked to it here so  you can watch it.

If you find any other episodes that you think are worth watching please let me know about them in the comments below

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Too much financial news is a bad thing! It makes you miss all the great ideas

Monday, 24 December 2012

A very merry Christmas...and a little Christmas giving nudge

It is Christmas tomorrow and I just wanted to wish all of the readers of this blog (and anyone else who happens to stumble on it) a very merry Christmas.  Regardless of what you are doing or whether you are having fun in the snow or standing around in shorts (I'm in Australia remember), I hope you have a happy safe and enjoyable Christmas.

I thought I would also do one last plug for Christmas giving.  Christmas is a really hard time for many people who are less fortunate and I just thought that I would give a last minute reminder for anyone who has not given this year yet that (assuming you haven't maxed out your credit card on gifts and merriment) that it is a great feeling to give something to someone you don't know for absolutely nothing in return (not even a hug).

There are so many charities that do an amazing job at this time of the year but if you can't be bothered brain-storming or looking for last minute ideas here are a few:

  • The Salvation Army
  • Many stores do gifts for those less fortunate (in Australia you can pop down to K-Mart and their wishing tree)
  • St Vincent De Paul Society
Those are a few that I have donated to in the past and who I know (from past experience) do a great job.  If  none of those take your fancy then just Google 'Christmas Appeal'.  It came up with hundreds of charities I had never heard of who may appeal to you.

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Tuesday, 18 December 2012

Tips on how to set your financial goals for 2013

In this post I will cover how to think about setting your financial goals for 2013.  In case you're wondering why I'm writing it so early, it is because you should spend some time thinking about what goals you want to achieve for the year.  My actual financial goals will probably be set closer to the new year however I am already thinking about what I want to achieve over the year.

What should your goals cover?

Many people set their financial goals as purely a savings and investing goal or target.  I think this does only half the job.  I think to set proper financial goals you need to think about everything in your life which relates to money and then set your goals according to this.

Your goals should therefore cover

  1. Savings
    • This is that amount which you put away for a 'rainy day' or money for which you may need in the short term (e.g. for a holiday or big purchases)
  2. Investments
    • This is money that you are putting away for the medium to long term.  This money can have a goal (e.g. a deposit for your home) or be for some future unknown purpose (e.g. retirement)
  3. Personal expenditure
    • You should think about setting goals for amounts that you want to spend on ordinary day to day living - this should include things like rent, utilities, entertainment, clothing etc
    • You should also include those big expenditure items that you want to spend on during the year.  For example in 2013 I know I want to upgrade my car to an older model sports car and go on a holiday to South America - and so I have to set aside money for this.
Be realistic and leave some fat to be wrong

One of the most annoying things about setting financial goals is how often we fall behind on them.  This ends up demoralising us and we often lose track of our goals for the year.  When you set your goals try and be as realistic as possible - and then leave some fat for you to be wrong.  That is - if you are going to err to one side - make it to under-estimating how much you can save and invest and overestimating how much you will spend on personal expenditure.  

If you beat these targets you will feel much better about your goals and targets. 

Set up a way of tracking your goals

There are plenty of easy ways of tracking your expenditure goals.  I have an excel spreadsheet which I update every month which then gives me my performance in both detailed and summary formats (which I then post on this blog). 

Having an easy file to update allows you to see how you are going and you can put as much or as little detail as you like.  I'm currently building a fairly detailed one which I hope to upload so that you can download it and use it if you like.

Always keep in mind that your goals should not dictate your life

This goes back to the realism point above.  You want to be able to stick with these goals for a full year - you do not want to resent them or for them to stop you doing anything that you truly want to do.  What they provide is a foundation for making your decisions and quite often it will also stop those impulse buys that so many of us seem to get caught by.

What are your goals?  Do you tend to stick to them or let them go?

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Wednesday, 12 December 2012

Melbourne's Myki system doesn't work and costs you money

This will be a very quick post from me today on how much the new Melbourne public transport system's Myki ticketing system actually ends up costing you as a customer.

It is billed as a way to save you money because the system only charges you the minimum amount required to travel.  However unless you have a very predictable travel pattern then this is not the case.  Further the fact that it does not work means that you constantly have to fork out an extra $6 for replacement cards while your old card is being replaced.

Myki is inferior to the system it replaced

Myki was an attempt to move Melbourne's public transport system into the 21st century by replacing an old paper based ticketing system (which were dispensed from machines and put through barriers) with a card like system that you see in many other parts in the world (such as London, Hong Kong, Seoul etc).

However, unlike those other systems, the cards totally replace the paper ticketing system.  In Hong Kong and Seoul for example, if you are not a regular traveller (or a tourist as I was) you could buy a one trip single ticket or a multi trip ticket without having to pay the fixed price with no credit for the card system.  Melbourne scrapped their paper ticketing system so that anyone, even a person just taking a single journey has to buy the (relatively) expensive card and a ticket on top of that.

While the above is annoying I confess that I didn't think about it much because it did not affect me personally.  However what does affect me is that the technology is terrible.  Putting credit on your card at a station takes an inordinate amount of time - the lines that you see now to add credit at peak times are much longer than what you used to see under the old paper ticket system.  I overheard some computer programmers talking about how it was a terrible system and how each of them could have designed a better / faster interface.  They raised the very valid point that it should take no longer than using an ATM as it is essentially doing the same task but it actually takes much longer.

Finally - and this is the big problem.  The cards simply stop working after a period of time.  I was an early adopter of the Myki system and I am currently on my 5th card because they just stop working.  I got used to this happening and so carried both my regular Myki and a backup with a bit of credit just in case.  Yesterday - BOTH of my cards stopped working.  I called the information centre to find out if I was doing something wrong (by keeping it in my wallet etc) however they said that this should not cause an issue.

Myki does not save you money...AND you lose flexibility

The signs promoting the Myki system said that you could save up to $1 per trip.  This is very misleading but to understand why you need to understand how the ticket works.  You have a choice of two types of cards whenever you buy a Myki

  • A Myki Money Card:  These are basically cash on your card and deduct the lowest possible fair amount up to a daily ticket
  • A Myki Pass Card:  These are for tickets longer than a daily (i.e. a weekly, monthly etc.)
As you buy longer and longer tickets the cost of the ticket gets cheaper (the same way the old metcard system used to work).  However if you do not have enough certainty around your travel for the foreseeable future then you get stung.  

You can't opt for your card to be a Myki Money card this week (when you are only travelling once or twice) and a Myki Pass card next week (when you have to travel every day).  The amount you save is only applicable if you travel the same pattern all the time.  I travel fairly regularly and I do not have a set pattern!

While a new system was was not this one

Melbourne's public transport ticketing system was ageing and did need updating.  However this was a system that was ill conceived, over priced and doesn't work.  Further customers get screwed and the fines for travelling without a ticket because yours stopped working are unbelievable.

I was a big fan of the system when it was first introduced however after experiencing all the downsides I no longer think it is worth it.  The old system worked better, saved you money and headaches.  If you are bothered by this send an email to your state government representative and get some interest going in this issue!

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Monday, 10 December 2012

How important is travel insurance?

Most of us realise that we need to get travel insurance when we travel.  Indeed some destinations require appropriate travel insurance before they will issue you a tourist visa and almost all guided tour groups require adequate travel insurance.

However, I think because we often see it as a requirement of travelling (just like a visa) and not a product with pros and cons, we often go for the cheapest option and not the one which is the most appropriate.

Why is travel insurance so important

There are several well know and documented reasons for having travel insurance however there are some areas of coverage that you may not know about (which actually come in useful)

  1. It covers your hospital bill in the event that you get sick overseas
    • This is the one that everyone knows is important
    • Hospital and medical cover for citizens is normally subsidised however tourists and foreigners normally cop the full hit.  This is definitely the case in Australia where citizens and permanent residents pay virtually nothing for hospital treatments however tourists get charged thousands of dollars for the same operation
    • This alone makes travel insurance worth it - it is not worth penny pinching on travel insurance (or on a provider that may not pay out) when there is the risk that you may get sick overseas
  2. It often covers lost or stolen property
    • Most people know that it

Friday, 7 December 2012

Save hundreds of dollars with The Entertainment Book

Recently I heard about a voucher book that has been along for a very long time called The Entertainment Book.  Having investigated it very thoroughly, I think this is one of the best ways that people (and families in particular) in Australia can save significant amounts of money from everything to groceries to nights out.

The other added benefit is that the Entertainment Book is sold through schools, charities and local sporting clubs to help raise funds so not only are you saving money but you're helping your local communities as well!

How does it work?

You buy the Entertainment Book from your chosen charity or school or club which costs $55 - $65 depending on the region.  The book is regional (i.e. there is one for Melbourne, Sydney, Canberra, Brisbane etc.) so make sure you buy the book that is specific to your location.  For exact prices and locations see the following list from the cancer council.

The book has vouchers for different sites and different activities all of which save you money.  However this is often hard to navigate (it really is a big book of vouchers) so I prefer to use their website to work out what I want to do. You can search by activity or region.

What is the best way to save money using The Entertainment Book?

The vouchers are not where the real savings are (although they are very good - e.g. 2 for 1 meals at many restaurants).  The real savings comes from the ability to buy gift cards from major retailers for a 5% discount.

If you think about how much money you spend on groceries in a year you can save a lot of money just from the discounted grocery gift cards.   I did a quick poll of people around my office and this is what I found:

  • Families typically seem to spend $3,000 - $5,000 a year on groceries (including things like nappies etc for young families)  
  • If you can save 5% of your grocery bill alone then you will be saving ~$150 - $250 just on groceries
  • This already brings you out ahead on your card.
Assuming you spend $3,000 a year on entertainment (I spend about this as a single person so I can only imagine how much families with children spend) and save 10% - 15% by using the coupons then you are saving another $300 - $450 a year.

Families that are looking for ways to stretch their dollar further or people who just want to get a control of their finances and save some more should really consider this book.  This book pays for itself through the discounted gift cards but you can save so much more if you use it efficiently.  One person I was talking to (who has 4 children) was saying that it effectively halves the amount he spends on entertainment for his family!

Are there any downsides to The Entertainment Book?

The only big downside is that often people feel uncomfortable using coupons.  Some may consider it as 'cheap' to do so and would not want to present one at a nice restaurant.  I do not feel this way, neither do the people I talked to but I'm sure others may feel that this is an issue and would be embarrassed to use it.

If you are a person like this you're probably not going to get all you can out of the book however as indicated above it is still worth it for buying your groceries because you are using gift cards not coupons.  Gift cards have no stigma attached to them and you are saving 5% every time you go to a supermarket.  

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Thursday, 6 December 2012

Tips on how to motivate yourself after leaving college or university

As many college and university graduates would know, one of the hardest things to do once you leave the educational system is to motivate yourself and to find your direction.  The 'go getter' attitude that you normally start working with rarely lasts longer than the first year of work and then the malaise often sets in.  I have experienced this myself, seen it with almost all of my friends and had comments from readers of this blog about it too.

The good news is that this does not have to be the case - but unlike school, college or university you need to choose your own direction and provide your own motivation to succeed in the work environment.  Below are some tips on how you can start taking control of your work life, how to set some goals and how to keep yourself motivated.

Why do graduates get disillusioned so fast after entering the workforce?

In my opinion, graduates get disillusioned very quickly after entering the workforce for several reasons

  1. There is no clear 'end game'
    • In the education system you know what you are working towards.  You know that if you work hard and get good marks in school you will get into the right university and if you work hard and get good marks in university then you have your pick at graduate positions
    • Unless your organisation is very hierarchical (like an Investment Bank or a Law Firm) where there are constant clear 'next steps' the lack of direction is really confusing for many graduates.  They no longer know what they are working towards
  2. They are not getting the constant feedback they are used to
    • In the education system you are constantly getting both explicit and implied feedback.  This is through educator comments and more importantly through marks
    • For high achievers, not getting anything in the workplace (annual reviews really are a joke most of the time) is quite a disconcerting feeling - you do not know how you are doing
    • Not knowing how you are doing and whether you are actually doing the right thing is a major reason a lot of people feel 'lost' in the workplace
  3. The external motivation is almost completely removed
    • Related to the point above the education system provides a lot of external pressures and motivations for you to work hard and succeed
    • In school the teachers push you very hard and your motivation is almost never internal.  In college it is much more internal however there is still implied pressure through the constant grading of papers / exams and the need to work towards the 'end goal' mentioned above
    • In the work place motivation is almost always completely internal.  Most workplaces that take a lot of graduates often start placing external pressure at the start because they know this is an issue however this drops off very quickly and graduates need to completely motivate themselves which is a very new feeling and often is hard to get the hang of
  4. The feeling that you are not completely in control of your own destiny
    • In the education system it really is a very personalised risk / reward system.  If you work hard then your results reflect this.  There is a very direct link.
    • In the workplace it is a lot more subjective.  You need other people to recognise what you are doing in order to get ahead
    • Unfortunately this is the nature of working in organisations however the disconnect between your effort and the perceived end benefit can be very disconcerting until you get used to the idea
I'm sure there are other reasons.  If you have any please post them below - I'd love to have a discussion around it.

How can graduates and new employees address these issues and get their mojo back?

In order to get your mojo and lost motivation back there are some things that YOU can do.  It is all about internalising those things which have been provided to you in the past. It is about realising that you are now the architect of your destiny.  A lot of people are very uncomfortable with this - they seek out mentors because they want someone else to guide them.  I think getting advice is fine however if a mentor is used to abdicate personal decision making and responsibility then I think it does more harm than good.

Here are some very definite things that you can do in order to get your motivation back
  1. Work out what you want your end game to be
    • It does not need to be financial or money or career related.  It is about where you want to be in the long run
    • My personal objectives are very clear on this blog.  I know what I want my end game to be financially BUT I also have personal objectives that I want to achieve in my life
    • These are not fixed objectives and change as I mature
  2. Work backwards from your end objective to what you need to do today
    • Staying in a tough job becomes easier if you can see that it gets you to the 'next step' in your life plan
    • At the same time if your current job is not going to get you where you need to go, it provides direction around what type of job you need to get and what experience you need in order to achieve what you want to do
  3. You need to be providing your own feedback while taking advice from others
    • No one is going to provide you feedback and advice unless you ask for it
    • Keeping in mind your objectives ask for advice on how you can get to the next stage in your plan
    • Ask for feedback on how you are doing and be constantly self assessing to see whether you are getting to where you want to be
  4. You need to motivate yourself - this is your life and your life plan
    • This is one of the hardest things to get used to.  Once you get used to the idea however that you are responsible for your own outcomes and you know what you want your outcomes to be the motivation seems to come much easier
  5. Realise what you can and can't change
    • You can change how you act and react and how hard you work and what sort of relationships you have in the work place
    • You cant change the nature of people who work together.  If you work in a truly toxic workplace then it is probably not helping your end objective but if you think you can get ahead in organisations without learning interpersonal skills then you're going to be constantly disappointed.
Once I started doing the above things I found that a lot of my lost motivation and mojo started to come back.  I am not quite as motivated as I would like to be but it is constantly improving and I'm working on it all the time.

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Wednesday, 5 December 2012

How to calculate retail versus institutional shareholders

I recently did a post on Woolworth's and the attempt of an activist group of shareholders to change the companies constitution.  Part of my analysis after the failure of this vote was an evaluation of how retail versus institutional shareholders voted.  This post will cover how you can calculate what percentage of the register is institutions versus what percentage is retail.

Why is being able to calculate type of shareholders useful?

I think there is a value in knowing what sort of shareholders form the shareholder base as an investor.  Although you shouldn't put too much weight on this issue it does give you some sort of indication about how the share price moves and how reactive it is to negative sentiment:

  1. Retail shareholders want different things
    • In the current market environment retail shareholders tend to be very yield focussed at the expense of all other characteristics - in other markets the focus is on growth or on technology.  With this focus on yield some stocks will trade well above their fundamental valuations if they have a strong yield and a strong retail shareholder following
  2. Retail shareholders often tend to react more to 'noise'
    • Although this is a generalisation - retail shareholders (more so than institutions) tend to react to noise and negative sentiment.  This is because institutions typically have to be close to fully invested in something while retail shareholders are able to sit in cash
    • Companies with large retail shareholder bases can have much more volatile share prices as they fall in and out of favour with retail shareholders
  3. Retail shareholders are more loyal to companies 'they know'
    • Retail shareholders tend to like companies they truly understand (which is definitely a good thing), however what it means is that the valuation of these companies may not fall to a point where it looks like particularly compelling value
  4. Institutional shareholders are more vocal and keep companies 'in line'
    • Although this is a gross exaggeration, institutions do tend to make their voices heard and companies with large institutional shareholders tend to listen to those shareholders
    • For this reason institutions often avoid (or allocate a discount to) companies controlled by one person or a family (like News Corp and the Murdochs)
There are many more traits like the ones I've mentioned above and there is no clear way you can benefit from the knowledge - however it will often explain why companies take certain actions or the stock price responds in a certain way.  It adds another lens for you to understand your investments and it is so easy to do that you can calculate it in under 5 minutes on your own.

How do you calculate what percentage of shareholders are retail versus institutional?

Note that this example below is for Australian companies.  I'm not exactly sure how to calculate it for international companies but there is normally a way to do this from the information provided year to year.  I will try and look into this for future posts.

I am using Woolworths as an example.  Part of the Annual Report (and sometimes for the interim reports) will always be dedicated to a summary of the shareholders section.  For Woolworths I have linked to it here.   What you need then is a couple of pieces of information and assumptions
  • You need the current price of the stock (approximate will do).  As at the date of writing this post WOW share price was ~A$30 per share.
  • You then need to make an assumption around the maximum value of shares that a retail shareholder is likely to hold.  I normally assume this is ~$100,000.  Retail shareholders are unlikely to hold more than that in a single company
Then you need to look at the ranges of fully paid shareholders.  Woolworths breaks theirs up in the following categories
  • 1 - 1,000
  • 1,000 - 5,000
  • 5,000 - 10,000
  • 10,000 - 100,000
  • 100,000 and over
Then assign assumed value ranges to these categories which then makes it
  • $30 - $30,000
  • $30,000 - $150,000
  • $150,00 - $300,000
  • $300,000 - $3,000,000
  • $3,000,000 and over
Retail shareholders therefore are going to fall within the first two categories only.  I am going to make a simplifying assumption and say that all the people in the first category are retail shareholders.  

I then take the number of shares within these categories (103,294,619+273,371,259) and divide it by the total shares outstanding (1,234,216,128) to get the percentage of shareholders which are retail.  For Woolworths this comes to 30.5%.

It is very simple to do and can give you an insight into any company you invest in.

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Tuesday, 4 December 2012

November 2012 Expenditure Tracker

ItemNov 2012Target (new)Over/(Under)
Share Investments-$28,968+$3,100-$32,068
Offset Acct.+$72,252+$1,300+$70,952
Personal expenditure+$2,777+$2,000+$777

As with my October 2012 post, this post will only have my performance versus my reset expectations.  In this month's post you will see how I have achieved on a cumulative basis) all my goals for the year thus far with the exception of my personal expenditure goals.  This may seem strange given I split my income up between the three categories that I track.

However the big impact this month was my tax return and the bonus that was paid to me by my employer.  The tax return is something inherently uncertain and I cannot bank on this in any given year - I have discussed more below why this years return was so large.  My bonus, however is more stable, and forms a reasonably large part of my compensation.  However I prefer not to include this because it tends to fund a lot of my large extra curricular activities such as overseas holidays which I like to do on an annual basis.  As I pointed out in my November 2012 net worth post I expect a lot of the bonus amount to be spent in the coming months as I go overseas and buy a new car so the effect of this will be virtually zero.

There were two particularly large impacts this month on my income

  • My tax return was much larger than expected (~$20,000)
    • This was due to several factors including paying a higher tax rate at my old employer (an investment bank) as I was earning more and then dropping to a lower tax rate so I got the excess in tax I had paid back
    • Paying off my HECS debt also reduced the tax rate that I had to pay
  • I received my bonus for the year
    • About 40% of this bonus was in deferred compensation and I have included this amount in my share investments.  Although I am not entitled to sell them until it vests it still is subject to fluctuations in the share market and I have no intention to move from this job in the near term
If I now look at my 3 accounts in turn:
  • Share investments
    • If you look above you will notice that I moved a LOT of money out of my share investment account.  This was for several reasons.
      • A lot of it was sitting in my brokerage cash account and was related to amounts I had transferred into it for the FKP rights issue
      • I sold out of my employee share plan during the month and this amount was transferred into my home loan offset account (I did a post on this during the month)
    • However this was offset by the purchase of shares as part of my deferred compensation scheme (mentioned above) and I also continued to participate in my employee share plan
    • If you look at this account on a cumulative basis it is still well above what my target is (see below)
  • Home Loan Offset Account
    • This account was in serious deficit.  Look at last month's expenditure tracker and you will see that I had under-invested in this account to the tune of ~$41,000 compared with my goal
    • However with the transfers from my share accounts, my cash bonus as well as my tax refund this account is well above what my aim for it should be (see the cumulative effect below)
  • Personal expenditure
    • I spent a similar amount this month compared with last month which I am pretty happy with.  It is rather controlled although I have been putting off several expenditure items including my work clothing which is definitely reaching the end of its life 
December 2012 is likely to be a month which sees decreases in my home loan offset account (due to over-saving of my bonus which is likely to be spent) as well as general Christmas gift purchases and holiday spending.  I should get more clarity around some of my deferred compensation which may see a step up in the share account.

On a cumulative basis my personal expenditure (versus goals) is as follows:

ItemJul 12 - Nov 12Target (new)Over/(Under)
Share Investments+$25,464+$15,500+$9,964
Offset Acct.+$31,380+$6,500+$24,880
Personal expenditure+$16,453+$10,000+$6,453

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Monday, 3 December 2012

November 2012 Net Worth: $319,000 (+19.0%)

Value% Change
Net worth$319,000+19.0%

My net worth performance this month was best in absolute terms since I have started tracking the increases. In % increase terms it is my second best performance however it is from a much higher base which is why the % increase was not as good as the absolute performance.  As highlighted in a mid-month post there were several things which drove this result including
  • Getting my annual bonus
    • After leaving investment banking my bonus was much lower than in previous years as was to be expected.  However I still work in finance so the bonuses are still pretty good and this contributed a significant amount to the uplift in my net worth for the month
    • Also, as I am earning less and I no longer have a HECS liability the weighted average tax rate I paid on this bonus decreased significantly
    • A component of this bonus is deferred compensation.  Where I have been allocated these shares I have fully valued them however there is another component I have not valued as I have no way of checking how this value moves month to month
  • Receiving my tax refund
    • I have been talking about doing my taxes for several months in my net worth and expenditure tracker posts however I finally got down to it this month and received significantly more than I was expecting back on tax (approx $20,000)
  • I realised some of the gains on my share portfolio
    • This actually had a negative impact on my net worth 
    • I track the share price movements through my excel file on a month to month basis however there were significant transaction costs associated with selling my employee share plan schemes.  For future periods I have found ways of avoiding these costs
  • My personal expenditure was much higher than usual however this got lost in the noise
    • I did not control my expenditure as well as I could have this month however because of the big bulky increases mentioned above, a lot of this effect was lost
For December 2012 I actually forecast a decrease in my net worth

I had pre-committed a lot of the amount I received for my bonus so the effects of this increase are going to be quite temporary (which is fairly disappointing because I was very excited to see my net worth go through $300,000 for the first time).  Things I had committed to included:
  • An overseas holiday I am taking in a few weeks.  I'm guessing this will cost me about $6,000 including accommodation, spending (I really have to buy new suits while I'm overseas) and entertainment.  Note that I paid for the flights several months ago
  • Christmas presents:  There really is no way of getting around this and I wouldn't want to.  I really enjoy giving Christmas gifts however it does affect the bottom line.  I am budgeting for about $1,000 on gifts.
  • A sports car.  This I mentioned was one of my goals for the year.  Although I have not bought it yet I know what I want to get and how much I want to spend.  I am planning on spending ~$25,000 on the new car and selling my existing car for about $12,000 so will be out of pocket an extra $13,000
My goal for December 2012 is to keep my net worth above the $300,000 mark and I should be able to manage this given I will still be earning during this time.

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