Friday, 28 November 2014

I'm importing a car from's why

I have been talking about buying a sports car for years and it's finally in progress!  After humming and hawing and budgeting and saving it feels good to make some concrete steps towards buying this car.

As you could probably tell from the title of this post I am not going down the conventional route when it comes to buying the car.  I have decided to import a luxury / sports car from Japan and below I'll outline why and how I'm going to do it.

Why on earth would you want to import a car from Japan?

I have had this response more than once however having done my research there are a few reasons I wanted to import a car from Japan:
  1. I had looked through the cars available in Australia and I either didn't like them or they were too expensive
    • I spent weeks if not months looking at various cars on car sales websites and they were either not exactly what I was looking for or if they were they had high kilometres or were too old
    • I decided to drop my two door requirement and decided instead to look for a 2 door sports car that had practical back seats 
    • I then came across the Nissan Skyline 350GT which seemed to be exactly what I was looking for - it may not be a 'true' sports car but it certainly has enough grunt to make me very excited about buying one
  2. The only problem was that this car was never sold in Australia and all the cars you see on the road are actually imports
  3. So why didn't I buy a second hand one in Australia? How do you know what you're getting when you buy overseas?
    • It is true that a lot of cars which are imported into Australia have their clocks wound back - the problem when you get it here is that the a lot of the original documentation is actually missing so you can't verify that the km are genuine
    • If you can get this documentation and if you go through a genuine broker your chance of getting a wound back car is significantly reduced.  Why?  Because brokers trade on their reputation and they are reliant on people saying good things about them to get more business
    • If I bought a car in Australia (privately)  I would need to take it to a mechanic near the seller (one I don't know and wouldn't trust because there is no ongoing relationship so they could tell me anything).  This is no different to getting someone in Japan to check the car out for me
  4. There is greater choice when you are buying from Japan
    • Not only do they have more cars but it honestly doesn't matter where in Japan I am buying the car from.  In Australia I'm basically restricted to cars I can go and see while in Japan I have someone doing that for me
    • Further there are more options coming onto the market in Japan so I can be a bit more picky
  5. The price is slightly better
    • The price is only slightly cheaper in Japan than it is in Australia once you take into account shipping, compliance, taxes and registration
    • It is actually incredibly easy to import a car from Japan in Australia (provided it is on the list of approved cars for import) so Australian second hand models tend to depreciate with their Japanese counterparts

Aren't I going to have issues with insurance and repairs?

Insurance is the one big draw back of getting a Japanese import.  Insurers generally hate them and the ones that do insure you will charge you a massive amount.  However when I got a quote for insurance on the car I was quite pleasantly surprised.  Although it is $500 a year more than my current insurance it certainly wasn't the massive bill I was expecting.

I imagine this is for a few reasons:
  • I'm a bit older and have an extensive accident-free driving record
  • The car I'm getting isn't going to have any modifications 
  • Although it is a sports car it is also a bit of a luxury car - i.e. their accident record isn't as bad as some other hot imports
Repairs aren't going to be an issue either.  I did a lot of research on this topic and it isn't really an issue because it shares an engine with the Nissan 350z which is sold here so there are plenty of parts around.  You generally have to wait for body parts to arrive from Japan which is a 2 - 3 week wait but that isn't a big issue either.

I haven't bought the car yet...but the process has started

The thing about importing a car is that you have to wait for the car you want to come up at an auction.  I have appointed a broker to help me facilitate this process and provided him with my budget and requirements. 

My request for a sunroof means that I am going to have to wait a lot longer than I would normally...and I've given him quite a challenging budget so it will be interesting to see whether I can get exactly what I am looking for.

So far I have paid the $1,100 broker fee (which needs to be paid upfront) but nothing else.  As I get further along in this process I will keep you up to date.  As with my wedding spending I am not going to do a whole heap of posts on this topic but if you're interested shoot me an email and I can give you some great reading that I've done on the whole import topic.

Many thanks also to one of the readers, Mike, who put me onto the whole concept of buying cars at auction.  I really do get a lot of knowledge from those who shoot me emails and ideas.

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Tuesday, 25 November 2014

How to combine finances with your partner...a transitioned approach

A few months ago I asked whether there was a right way to combine finances with your partner.  I received some great tips both from the comments on the website and from some very detailed emails that people sent me.

What I realised was that everyone's situation was different and it completely depended on the couple involved.  In my original post I outlined some of the ways that couples combined their finances.  In this post I will talk about transitioning to such an arrangement - i.e. how do you combine finances with your partner smoothly.

How to combine finances with your partner in a smooth and trouble free manner

Some people are completely comfortable joining their finances together immediately.  I talked to plenty of people who didn't bother thinking about it too much - they just did it and worked it out along the way.  However largely these people seemed to either
  • Be broke (or not have a lot) when they combined finances - combining nothing is quite easy to do!
  • Regret not thinking about it more at the start - they were 'young and thought nothing could go wrong'
If you are thinking about combining finances when you're a bit older and if you're the type of person that thinks about things far too much (like I do) then mashing together two peoples financial lives straight away doesn't seem like the best idea.

Transitioning to joint finances has many advantages

There are several advantages of transitioning to joint finances instead of setting up one bank account and putting everything you have in there straight away.  These include:
  1. Being able to see how your partner deals with money
    • You will probably have a feel for this well before it comes to it however when you are actually sharing finances you will learn far more about how your partner thinks about and deals with money
    • For example - I never thought my fiancée was bad with money however she never really seemed to save a lot and didn't have any sort of nest egg.  What I discovered when we started saving together was that as long as she had a goal and knew how much she had to save each pay check then she would save like a fiend!  It's not the way I operate with money but it gave me far more comfort in combining finances
  2. Allows two people who come to a relationship with vastly different financial situations to have a 'mine', 'yours' and 'ours' bucket
    • I have no doubt that eventually everything is going to fall into the 'ours' bucket...especially when I get married
    • However in the interim I didn't feel comfortable lumping everything together straight away.  Perhaps I'm just a cautious person but I did prefer a slower integration
  3. You don't feel 'trapped' too early
    • A lot of people (including myself) valued the sense of freedom that came with being single.  This didn't mean that I don't want to be in a relationship...but if I have been saving for my sports car for a few years I don't want to have to have to run that by someone else (I saved for this!)
    • Eventually your finances will probably be completely shared and then something frivolous like a sports car becomes a joint decision but early on it should still be yours and transitioning to combined finances helps with this!
  4. Avoids some potential tax issues
    • If you already have a share portfolio or other assets be careful about transferring title (even when you do get married)
    • Often transferring title (even to a trust if you decide to set one up) will result in a capital gains event and will result in you having to pay tax even when you don't plan on selling the shares

A slow and progressive transitioning to combined finances is both natural...and it works

I found that slowly moving to more integrated finances is the best way to combine finances.  Below is an example of how you can slowly move to integrated finances:
  1. Set up a joint account and pay shared bills out of that account if you live together  
    • Work out roughly how much you need to spend each month in joint expenses and then each of you transfer an assigned amount into this account (it does not necessarily have to be half and half but it should be shared)
    • Continue to pay your wage etc. into your own account...the point of this is to combine finances slowly

Friday, 21 November 2014

My 4 Rules for entering gaming venues

I don't often go to Casino's.  It's not that I have a particular moral objection to them - I just prefer not to play a game where the odds are mathematically tilted against me.  However I went to a casino recently (context to come later) and after doing so I now have new rules for myself about gabling generally.

My rules for entering gaming establishments
  1. I will never spend more than 2 hours in a gaming establishment
  2. I will never gamble more than $50 in a night
  3. I will never use a card of any sort in a gaming establishment (credit or debit)
  4. I will never enter a gaming establishment after drinking
...and now it's time for some context...

How did my personal rules for gambling come about?

I was at a bucks night recently (getting married seems to be the thing to do amongst my friends at the moment) which ended up at a casino after several hours of drinking.  We left the casino to go elsewhere however ended up back at the casino later in the night.

Before I go into what I saw and experienced that night let me just say upfront that I did not lose thousands of dollars and this is not a post of regret.  I bet $20, at one point in the night I was up $100 and I ended up down $10 at the end of the night.

When I looked around I was staggered at the amount being bet...and lost

I love people watching however people watching in a casino is one of the most depressing things I have ever done.  I was just on the regular gaming floor (on the cheap tables I may add) but the amount of money being bet was still staggering.

I saw one man playing

Tuesday, 18 November 2014

My Updated Wedding Savings Plan

Around Valentines Day this year I set out my plan to save for a ring and ultimately marriage.  I had heard how much marriage costs and I didn't want to have any sort of bill shock when the inevitable expenses actually came around so I decided to spread some of the expenditure associated with marriage.

My original plan called for $60,000 in total savings:
  • $10,000 for the engagement ring and proposal
  • $30,000 for the wedding itself
  • $20,000 for the honeymoon
I'm glad to say that the first part is done and dusted.  I bought the engagement ring (for $10,000), got the GST back on the ring when I went overseas (-$909) and then spent about $1,500 on the proposal itself.  I was about $600 over budget but in the grand scheme of things I'm not too worried about that.

However, being proposed and being able to talk about the wedding with my fiancée has helped clarify what we want to spend and how much we're probably going to need for the wedding.

The new budget is $10,000 higher than the old budget...and the timeline is shorter

Spreading expenses over a particular time requires you to know 2 variables:
  1. How much are you going to spend?
  2. When are you going to need to spend it?
I had originally forecast $30,000 for an August wedding in 2015 however once my fiancée and I sat down and did the numbers we realised that we would probably need to spend more and save it in less time.

The wedding is going to be ~$10,000 more than I originally forecast...

The wedding is going to be more expensive than I originally forecast for 2 reasons
  1. I under-estimated how many people we had to invite.
    • I originally did the calculations on a wedding for ~120 people however when we actually listed how many people we wanted to invite the list turned out to be more like 150
  2. There are some significant costs I didn't originally think about
    • When I first budgeted for the wedding I thought about the costs that most people incur such as the reception, outfits, church, flowers etc. etc. and I gained these lists of expenses from online forums and calculators
    • However there are some costs which you will incur that are specific to your wedding.  In our case we are going to have to pay for the flights and accommodation of some very close family members that we want to be at the wedding but who genuinely can't afford to be there if we didn't help them out.  I am more than happy to spend this money but it does add up very quickly

...and is also likely to be a month earlier than forecast

I had originally forecast an August wedding and had set my savings plan up accordingly.  However when we worked out when we actually wanted to get married we realised that we were actually looking at early July (due to my work commitments in August).

This effectively reduced our time to save for the wedding by 2 months.  This may not seem like a bit reduction however a few factors meant that it has having a far larger impact than I first imagined:
  • I had originally structured my savings plan so that I was paying more the closer I got to the wedding
    • Originally I was paying

Tuesday, 11 November 2014

My sports car dilemma....

I have been talking about buying a sports car for years.  I have mentioned to friends my family and I have talked about it on this blog more times than I can imagine.

I have the cash to spend on my sports car...

At the start of this year I committed to buying it as part of my financial plan and budget.  There were some hiccups along the way...the fact that I was running over budget on a lot of my other planned expenditures made me realise that I would have to compromise on the amount I had to spend.  However recently there was some good news on that front:

The excess cash from these two factors should cover the 'over-spend' on other items throughout the year which leaves me free to spend my original budget on my sports car.

...but here's the hitch...

I can't work out what

Thursday, 6 November 2014

October 2014 Net Worth: $516,000 (+1.4%) and Expenditure Tracker

I have been off for several weeks as I travelled around South America.  The trip was fantastic and was one of my financial goals outlined at the start of this year.  I returned home yesterday and am still recovering from the jet lag.  I will be returning to my regular posting schedule over the coming weeks.

October 2014 Net Worth: $516,000 (+1.4%)

Value% Change
Net worth$516,000+1.4%

What drove my net worth performance this month?

I should note upfront that this data includes my performance up to the 5th of November - it was too hard to try and remove the last 5 days (since my return home).  As in previous months the big swing factor this month was my share portfolio performance however there were a number of other factors which also impacted the result.  I had originally targeted $510,000 this month and was pleased to do better than I had expected
  • Positive factors
    • Share portfolio
      • My share portfolio increased by 2% over the month which I was incredibly pleased with
      • My Australian shares continued to be weak however my US exposures which make up a significant part of my exposures did well (especially with the softer US$)
    • I paid down a significant amount of debt
      • Although my assets didn't move significantly, this month saw a big decrease in my debt balance as I paid down my credit card.
      • Last month saw my largest credit card bill to date (~$9,500) which was caused by the engagement ring that I had bought in prior months
    • My holiday cost less than I had budgeted
      • I will go through this in more detail below but I ended my holiday with more cash than I had forecast (~$1,500 more) which was an unexpected boost to my net worth
  • Negative factors
    • This month there were no large negative factors which affected my net worth.  Originally I had expected my cash contributions to my holiday to be a significant negative factor however as I came in under budget this didn't move the dial significantly

What is my outlook for next month?

There will be several swing factors in this coming month.  My bonus gets paid which is always a big positive however there will be A LOT of negative factors including 5 weddings (and bucks nights) which are likely to see me out of pocket ~$1000 in gifts and entertainment, I need to pay my tax bill (no refund for me this year) and other bills which all see to fall due at the same time.

I have not yet decided whether I will include the cash from my bonus in my net worth as I am using it to buy a car.  If I buy the car in November it will not make a huge difference as it will net out but if it takes me longer than that I am likely to see a big positive followed by a big negative.  Assuming I do include it I am targeting a net worth of $550,000 for the month.

October 2014 Expenditure Tracker

ItemOct 2014Monthly TargetPerf. vs Target
Accommodation / Living expenses $1,594$2,246-$652
Car expenses$28$692-$664
Health / Well being expenses$450$566-$116
Entertainment / Personal expenses $683$1,230-$548
Travel expenses$1,562$675+$887
Other 'big' expenses$2,000$3,508-$1,508
Savings / Investments$1,138$1,051+$87

If we look at the major line items in my tracker above

  • Accommodation and living expenses
    • My fiancée moved in with me this month which resulted in us splitting a lot of the utilities and grocery bills which feel due.  This combined with the lack of large one off expenses resulted in a large under-expenditure this month
  •  Car expenses
    • I couldn't quite believe how low my car expenses were for this month however I was away for half the month and in the first of the month I didn't need to fill fuel which resulted in the lowest car bill I have seen all year
  • Health / well being expenses
    • A lot of expenses in this category (e.g. gym and health insurance and charities) are automated however being away did help lower other expenses such as the hobbies and sports I engage in on a casual basis
  • Entertainment / personal expenses
    • This is where being away really helped - Friday nights, coffees, meals and drinks were all non-existent expenditures for half the month.  This performance is definitely not going to be repeated again
  • Travel expenses
    • Although I 'underperformed' in this category this month it was by far less than I had originally expected
    • I will do another post on why I spent less than I had budgeted but I came back from my holiday with $1,500 more in cash than I had originally thought I would.
  • Other 'big' expenses
    • I am no longer saving for the engagement ring which reduces the amount that I put towards 'big expenses' however in the next month or two I will be buying a car which is going to see this number completely blown out of the water
  • Savings / investments
    • I continued to save into my employee share plan and didn't need to dip into savings this month which helped keep me in positive territory
This coming month should be interesting, with my bonus payout, my car purchase as well as a lot of other expenses that I mentioned above.  I am starting to look forward to writing up my annual performance in a few months time.  I really hope I managed to stick to this budget.  Tracking every dollar has been a bit of a pain however it really has helped me focus my spending.

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