Monday, 30 June 2014

90 Million Blog's 3 Year Anniversary!

I'm incredibly proud to announce that 90 Million Blog just turned 3 years old!  

When I started writing the blog 3 years ago I could not have imagined what it would become (or that it would last so long).  It has not been smooth sailing the whole way but this blog is an incredibly important part of who I am now and I hope to keep it going for as long as I can.

I wanted to thank everyone who has contributed to this blog...

There are so many people that contribute to this blog in various ways and I wanted to thank all of them including:
  • The regular readers and those who leave comments on the blog
    • When I originally started writing this blog I didn't think anyone would ever read it
    • What I found though is that there is a great community of people out there who are passionate about creating wealth, improving their life and their financial situation
    • I just wanted to thank those who continue to read and participate in the blog
  • Those who gave me advice and constructive criticism
    • Although I wish I was perfect at this whole blogging and wealth thing it is more than clear to me that I am not
    • I really want to thank those who have taken the time to give me advice and also to offer criticism where it is warranted.
  • My friends who encourage me to continue writing the blog
    • I have told very few people about this blog for reasons I have talked about before but there is a small group of friends (including my girlfriend) who know about the blog
    • They have all been incredibly supportive and encourage me to keep writing

The blog didn't exactly go in the direction I thought it would this year...

When I wrote this post last year I outlined

Thursday, 26 June 2014

It's Tax Time: Here are 4 things you should do before 30 June

Can you believe the end of the financial and tax year is already here?  It seems to come around quicker every single year! You have just a few days left to get your some last minute tax structuring done before the year comes to an end so I have compiled a list of things that you may want to consider doing.

Here are 4 things you should think about before the end of the financial year:

1. Calculate your capital gains tax bill and work out if you need to trade

You should be doing this at the end of every financial year.  I have posted about this idea in far more detail but here are the basics
  • You can't offset your capital gains tax losses / gains against your other income (as you can with your investment property)
  • If you have a tax gain or loss you can net it off with another position that you may want to exit 
  • If you have a CGT liability for the year and have unrealised tax losses you can realise the tax loss and then re-enter the position again in the new financial year
    • Note that this creates a new tax base and transaction costs but it may be worth it due to the time value of money

2. Donate to charity before the end of the financial year

If you have been thinking about donating to charity now is a great time to do it.  The charity is probably going to be indifferent between receiving it now or in 5 days time but you get the tax benefit this year instead of next year.

Don't forget that in order to do this you have to have a tax receipt!

3. Work out if you can front end any tax deductible expenses

Do you have tax deductible expenses that you are planning to make?  Perhaps it is salary sacrificing into superannuation or perhaps you need to do some repairs on your investment property or get a depreciation report for your investment property.  

If you have an expenditure which is tax deductible you should think about making these expenditures (or pre-paying these expenditures) before the end of the financial year.  Again this has to do with the time value of money (i.e. a tax deduction now is worth more to you than a tax deduction in a years time).

4. If you are over turning 31 or are already 31 and don't have health insurance consider getting cover

I recently did a post on the Lifetime Health Cover loading which applies if you don't have health insurance by the 30th of June after your 31st birthday.  It really is quite a big stick and if you are thinking about getting health insurance at any point in your life you should be aware of the implications of the LHC loading.

If you're already over 31 keep in mind that the longer you wait the more you are going to get hit when you eventually decide to take cover.  So if you have turned 31 this year or are above 31 consider taking out health insurance before the end of the financial year.

Save time, save money and make your life simpler at tax time

Getting your financial affairs in order before the end of the tax year can save you time, money and make your life simpler when it comes to tax time.  This year I have made sure that my financial affairs were in order well ahead of time so that I could fire my accountant and do my own taxes.

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Monday, 23 June 2014

The Lifetime Health Cover loading can really think about it before June 30

This post is written for Australians in the lead up to the end of the financial year.  If you turned 31 in the last financial year and don't have health insurance then you should really consider getting it otherwise the Lifetime Health Cover loading will bite you quite badly.

At the end of every financial year you will notice that health insurance companies start advertising quite heavily and advising their customers to get health cover before June 30 in order to avoid the Medicare Levy Surcharge.

I have written before about how you shouldn't get fooled by this.  The surcharge will apply for the percentage of the year that you don't have health insurance.  So if you get coverage on the 29th of June and earn above the threshold ($88,000 for singles and $176,000 for families) you are still going to have to pay the surcharge (1.0% - 1.5% depending on your income) for the 364 days you didn't have coverage.  You should still get the coverage to avoid the tax...but there is no real rush to it.

However the Lifetime Health Cover loading is time dependant and if you don't have health cover and you turned 31 in the last financial definitely need to get health insurance before June 30!

What is the Lifetime Health Cover loading?

The Lifetime Health Cover loading is an initiative by the Australian government to encourage people to take out health insurance when they are still young and keep this health insurance going.  It stings you if you don't have health insurance now but if and when you decide to get it at some point later in your life.

The Lifetime Health Cover loading is a huge stick to encourage you to get health insurance before you turn 31.  Read on to find out how it works.

How does the Lifetime Health Cover loading work?

If you do not have hospital cover on the 1st of July following your 31st birthday (assuming you turned 31 after 1 July 2000) you will have to pay a loading when you do decide to take out health insurance later in life.

The loading is calculated as 2% for every year you are uninsured for every year you are over 30.  For example if you decide to first take out health insurance at age 40 you will have to pay 10 years x 2% = 20% more for your health insurance than someone who was covered the whole way through. This loading lasts for 10 years from the point you first get hospital cover. 

What if I don't want health insurance?

Thursday, 19 June 2014

Fire your accountant and do your own taxes

I'm firing my accountant and doing my own taxes this year.  I have written before about the dilemma regarding whether to use an accountant to do your taxes.  For the last 2 years I have had an accountant do my taxes for me.  It provided a safety blanket however it had downsides as well such as

  1. Having to take time off to go and see the accountant
  2. Having them take longer to do the taxes than I would myself
I have therefore decided to do my own taxes from this point forward

The more I thought about it, the more I realised that people like me should really be doing their own taxes.

You should do your own taxes if...

...You completely understand your own financial situation

If you completely understand your own financial situation or are looking to really take control of your financial situation then you should really consider doing your own taxes.  Unless you have companies embedded within trusts and a lot of complicated structures set up it is quite easy to do your taxes yourself.

In Australia the Australian Tax Office makes it quite easy to do this.  They give you a program which helps you work your way through your taxes and the guides on their websites are reasonably simple and easy to understand.  I don't know what other countries' systems are like but if it is anything like Australia you really should be able to work it out.

If you really have no idea

Monday, 16 June 2014

I invested in a fraudulent company and lost my is what I learned

Things don't always go to plan when you invest in individual stocks.  Some stocks will make you money and others will lose you money.  This post will cover an investment I made two years ago (and which I wrote about on this blog) which went sour and where I lost my whole investment.  I will cover why I made the investment, why it went south and most importantly what I learned from the whole process.

What was the stock and why did I invest in it?

Almost exactly two years ago I invested in a company called Kinghero.  It was a German listed, Chinese manufacturer and fashion retailer aimed at the growing Chinese middle class.  I invested in it for several reasons:
  1. The industry was appealing
    • Getting exposure to the

Thursday, 12 June 2014

Value Your Time: The Case for Outsourcing

A few weeks ago I wrote a review of The 4-Hour Workweek (see my review here).  That book had several themes but one of the main ideas was that you can free up your time by admitting that it has a value.  When your time has a value then you can work out whether you can outsource activities or chores which eat into your free time.

The focus of this post will be on encouraging you to think about how you value your time and how you can free it up by outsourcing.

Your time IS valuable

The thing you should always remember is that your time is valuable.  Most people (especially those of us who are focused on saving and budgeting) often forget this.  We often find ways to save money by doing things ourselves however we forget that the time we spend doing various tasks could be spent doing something that we actually want to do.

An easy way to value your time is to work to answer the following question:
"If I could buy an hour (or a day) away from my job...and still get paid - how much would I pay for this time?"
If you are willing to pay $20 for an hour off at work then you should value your time at $20 per hour.  Obviously the more you earn, the more you would be willing to pay for that extra hour off.

As savers we are conditioned not to 'waste' money.  If your

Monday, 9 June 2014

Learn to ignore the distractions on your financial journey

Like many of you, I am on a journey to achieve financial independence.  I slip up from time to time but for the most part I am disciplined and have a strategy to achieve my goals.  There are plenty of distractions along the way and some of them come from unexpected sources.

This post will cover one of the distractions that I received recently...and my tips for ignoring these impediments to achieving your financial goals.

My bank offered me a credit trying to guilt me about not spending 'on myself'

Recently I received the most outrageous letter from a bank.  In fact I honestly thought that banks were more responsible than this.  I have my home loan with a different bank to the one which has my transaction and credit card account.  In order to try and get more business from me, my home loan account bank constantly sends me letters offering me all kinds of products (including credit cards).  That is fine...that is the business they are in.  

However recently I received the letter below (along with a pre-filled credit card application form).  It was so outrageous I actually decided to copy the relevant sections

It is truly incredible that a bank would actually tell people to 'get in touch with their impulsive side'.  That they would discourage savings and people acting sensibly truly

Thursday, 5 June 2014

How to maximise the value of your free Credit Card Travel Insurance

I love to travel.  If I had a choice I would constantly be travelling.  One of the things that I always do whenever I travel is make sure I have the right travel insurance as getting sick in a foreign country can be financially disastrous.

Specialist travel insurers are great...

I had always used specialist travel insurers and have been served well by them.  I once booked a month long trip overseas with my brother and when he fell ill and was no longer able to travel I was able to get almost a full refund on all the flights and tours that I had booked until that point.

If you are looking for a specialist travel insurer I can highly recommend CoverMore insurance.  As long as you read the fine print and understand what you are covered for they are a well run, reputable insurer who does pay out when they say they will (that was my experience anyway).

...but this year I'm going to give my credit card insurance a go

I have had the option of free credit card travel insurance for a while but I had never used it.  I confess that I rarely trust anything that is free but I recently decided to look into it a bit more.  I have a Commonwealth Bank platinum credit card which offers free travel insurance and when I looked through the PDS for the free travel insurance (offered by Zurich Insurance) I realised that it was reasonably comprehensive.

It covered everything that CoverMore had offered me and more including unlimited medical coverage, an amount for delays, lost luggage, stolen goods and anything else I could think of.  Even better I found a few people who had actually claimed on their insurance and found that they paid out fairly and promptly as long as you met the conditions in their fine print.

Meeting the conditions was relatively easy.  All I had to do was spend at least $1,000 of my travel expenses on my credit card and I was covered for the whole trip.  The biggest downside was that it would not cover my girlfriend (although if you are married it covers your spouse and children as long as you spend $1,000 per person before you travel).

Make sure you maximise the benefit of your free credit card insurance when you purchase your holiday related expenses

Monday, 2 June 2014

May 2014 Net Worth: 492,000 (+0.8%) and Expenditure Tracker

This monthly post of my net worth may look a little different to my regular readers.  I'm trialling having my net worth post and expenditure tracker post in one article.  If you like this (or dislike it and prefer to the two separate articles) let me know.

May 2014 Net Worth: $492,000 (+0.8%)

Value% Change
Net worth$492,000+0.8%

What drove my net worth performance this month?

I was actually reasonably pleased with my net worth performance this month.  I achieved exactly what I set out to achieve this month (as discussed in my April 2014 Net Worth post).  I did not save as much as I wanted to as I booked several things on my credit card (which I will discuss below) which increased my liabilities significantly.  However offsetting this was a strong share market performance.  The major movements in my performance are described below:
  • Positive factors
    • A strong performance in my share portfolio. 
      • This month one of my companies did an accelerated renounceable rights offering.  Unlike a non renounceable offering there is no opportunity to apply for an overallocation of rights which are not taken up.  However I could apply for my rights.  Theoretically this should make me value neutral however the value of these shares traded well above the Theoretical Ex-Rights Price and I made a good return from them
    • Continued Savings into my Employee Share Plan.  
      • I never really understood why 'pay yourself first' worked so well until I started investing in my employee