Tuesday, 1 December 2015

November 2015 Net Worth: $700,000 (+5.9%) and Goal Tracker

I love bonus month!  It's the one really big cash inflow that I have during the year and this year was no exception.  Bonus month helped my net worth jump almost 6% to hit the $700,000 mark for the first time.

Crossing these milestones is always a bit of a strange experience.  I technically know that I am building wealth but my life doesn't feel any different.  I'm still doing exactly the same thing day to day but the effect of compounding seems to be accelerating the process.

Net Worth: $700,000 (+5.9%)

% Change
Net worth

This month my net worth increased $39,000 and there were a couple of huge factors that led to the increase.  For once most of it was actually expected (as opposed to hitting me from nowhere) but it was still pleasing to see everything running as expected.

My bonus got paid in the month

  • My annual bonus forms a significant part of my income and it was paid this month.  I'm not going to go into the specifics of exactly how much it was but a good chunk of the increase this month was the bonus payment
  • Part of my bonus is deferred for the next few years (although part of this gets paid out every October so if you read my post last month you will have seen a significant uplift from that)
  • Tax is also taken out of my bonus payment automatically...given that it is taken out at close to the top marginal rate, I'm losing 50% of my bonus almost straight away
  • Even with all these mitigating factors it was still nice to see a significant step up in the amount of cash I had on hand

I paid my tax bill during the month

  • I had an absolutely massive tax bill this month...I owed the government more than $8,000!
  • Most of this was due to my trading in shares and as I generate profits on my share portfolio I keep track of the capital gains tax I have owing which forms part of my liabilities above
  • Although I paid out a significant amount in cash this month it actually didn't affect my net worth all that much as my liabilities stepped down by a similar amount

My investment portfolio continued to perform well

  • My investment portfolio did rather well this month increasing by almost 2% over the month
  • I also continued to contribute to my employee share plan and my employer continued to make superannuation payments on my behalf
  • My investment portfolio (including my superannuation) represents approximately half of my net worth with the rest being the home I live in and the cash I am stocking away from my next house

My credit card balance remains stubbornly high

  • One of the few disappointing aspects of this month's performance is how stubbornly high my credit card bill remains
  • We are doing renovations on our home at the moment and everything we buy goes on the credit card...I think this is an area my wife and I probably need to focus on going forward.

When I look back

Wednesday, 11 November 2015

A new direction for myself and this blog...

Writing this post is actually reasonably challenging because what I am writing about is a work in progress and I have not actually completed yet but instead of going completely dark on the blog I thought I would let you guys know what I have been up to.

So let's deal with first things first...

Why haven't I been writing blog posts?

Not writing blog posts for a blogger is the best way you can think of to kill a blog and I had this experience a few years ago when I was going through a tough patch and blogging and finance were not the foremost thing going on in my life.  Thankfully this time that is not the reason I stopped writing.

The fact is that I used my honeymoon to reassess what was important to me and what I wanted and needed to be spending my time on.  I love writing this blog and have loved writing it since my first post in 2011.  That hasn't changed at all. 

I stopped writing as many posts because I came to the realisation that it was taking time away from things I needed to be doing more.  At one point I was writing 1 - 2 posts per day on this blog.  Each posts would take at least 45 minutes to write and some which required more research took considerably longer.  I was happy to do it too but given that it was taking ~4 hours of my week it needed to be assessed alongside all the other things I could be doing with my time.

What I needed to do therefore was to work out exactly what I wanted to do with my life and importantly what the most productive thing I could be doing with my time.

What do I want to do with my life?

Monday, 2 November 2015

October 2015 Net Worth: $661,000 (+3.4%) and Goal Tracker

Apologies to everyone for my absence from the blog for a significant amount of time.  I went on my honeymoon for just over 5 weeks and although I have been back for about 3 weeks now I have made some major changes in my life (which I would love to share with you guys and I will do so in an upcoming post) which mean that I am now spending far less time blogging than I used to be.

These net worth posts will continue into the future though so if that's what you come to this blog for...have no fear!

Net Worth: $661,000 (+3.4%)

% Change
Net worth

This change represents two months of net worth progress and although it pales in comparison to previous months where I really had gangbuster returns there was actually quite a lot going on under the hood.  The 3.4% increase above actually represented an $22,000 increase in my net worth and given the changes I'm going to outline below...I'm actually pretty happy with that!

Below are just a few of the items which affected my net worth over the last 2 months:

We paid for our honeymoon expenditure out of savings...but we continued to earn our wages at the same time

  • My wife and I had fully funded our honeymoon through a years worth of savings.  I had accounted for the upcoming expenditure as a 'future liability' and so the cash saved for this honeymoon never really formed part of my net worth
  • However while we were away for 5 weeks we didn't really spend any money that wasn't part of this savings AND we continued to each receive our wages
  • This meant that we had far more cash in the bank when we returned than we originally anticipated
  • We put all of this extra cash towards our home loan

My bonus shares vested this month...however this was a net negative

  • As part of the bonus I receive from work I receive shares which I am not allowed to sell for a period of time
  • I account for these shares as part of my net worth as I have no intention of leaving this job
  • However there is a tax impact of actually being granted these shares and I don't know the impact of this until they actually vest
  • This actually had a significant negative impact on my net worth this month

Monday, 21 September 2015

What blogs do I read?

Today I thought I would share with you the types of places where I get my information from.  We all read different blogs, columns and digest information differently.  We have all stumbled across great blogs while googling for something entirely different.

Today I'm going to share with you some of the awesome things that I have found on the world wide web.

Friday, 4 September 2015

Up, Up and Away

So I finally did it!  I finally got married (after posting about it for literally years) and I just wanted to let all of you know and thank the significant number of readers who contacted me to give me friendly advice about the whole process and who also emailed to wish me well.  It really meant a lot.

Today I'm off on my honeymoon which will encompass 5 countries in Europe over 5 weeks .  I've never been to Europe so I'm SUPER pumped for this.

Why haven't I been posting as often?

For regular readers you may wonder why I have not been posting frequently and basically it came back to something that I mentioned in my 2015 Annual Review.  I have a ton of posts that I could write about and indeed I actually have about 10 posts sitting in my drafts ready to go...but I have been thinking of re focussing this blog into something else.

I'm not 100% sure where I'm going to end up but it will almost certainly be blogging and definitely blogging about finance!  I'm just trying to work out what I can write about that will make a difference to other people's lives.

Hopefully a completely break over a month in Europe will help me clarify exactly what I will be doing in the future...but until then thanks once again for all the support and hopefully I'll get to tell you all about the trip when I get back!

Tuesday, 1 September 2015

August 2015 Net Worth: $639,000 (+8.0%) and Goal Tracker

This month was massive for me.  I crossed the $1 million mark in terms of assets and my net worth crossed the $600,000 mark for the first time.

One of the interesting things about updating my net worth every month is that I totally ignore the larger numbers...I'm far more interested in how I'm performing month to month...but occasionally when I cross a bit milestone like $1 million in assets...that's pretty exciting!

So how did I do it and what changed?  Well read on below for details.

Net Worth: $639,000 (+8.0%)

% Change
Net worth

This month was absolutely crazy for me.  I took a massive hit in my share portfolio as global share markets sank to their lowest levels in 4 years.  However offsetting that was a large increase in the value of my property.  I will go through this and more in my detailed explanations below.

Thursday, 20 August 2015

Deconstructing why and how we pay our taxes

Every year around this time of the year my mind turns to tax as I start to do my own taxes.  I often grumble about taxes but I also realise that taxes are a necessary evil.  Any discussion about taxes and tax policy is filled with self interest and people looking out for themselves.

It is so hard to have a neutral discussion about taxes without people feeling that they are hard done by.  Low income tax earners point to the tax breaks that high income tax earners get and high tax payers point to the proportion of the tax system that they are funding.  Neither is wrong either...the tax system is far from perfect.

So what is the answer?

I recently saw a discussion piece by Vice News on this very topic and although it is very US centric the issues it discusses have a much broader appeal.  I found it incredibly enlightening and the people on the panel were experts in their field, able to leverage off each other for one of the best discussions on a complex topic that I have ever seen.

I cannot recommend this piece highly enough...enjoy!

Thursday, 6 August 2015

I'm a high income earner...and this is why I have NO problem with the Warren Buffett Tax

A few years ago I started writing a whole heap of posts on politics.  It is something I'm really interested in but this wasn't the best venue for it so I swore off it.  My "no politics" rule is still in place but I do talk about tax quite a lot on this blog and I thought today I would focus on why I don't really have any objection to the Warren Buffet rule that politicians are currently considering.

What does the rule say?

Basically the rule says that high income earners should be paying their fair share in taxes.  In the Australian context this has been expressed as anyone earning above $300,000 should have a minimum average tax rate of 35% regardless of any deductions they may have.

Why is it called the Warren Buffet rule?  Well it was proposed by legendary investor Warren Buffet who argued that legally the tax he paid was less than his secretary which seemed crazy and not right to him.  He proposed this rule as a way of plugging a lot of loopholes at once.

This isn't actually as bad as it sounds

In Australia if you were earning $300,000 per annum and had no tax deductions you would be paying tax of approximately $117,000 which is about 39% and you would be in the top marginal tax bracket of 49% (including the medicare levy and the budget repair levy). 

Now it doesn't sound like it would take a lot to get your tax rate down to 35%...but it actually isn't as bad as you think.  For someone earning $300,000 their minimum tax payable would be $105,000.  Under the current tax rates this means they would actually be getting taxed as if they were earning ~$276,000 which still gives you a hefty $24,000 in deductions.

But let's be honest...these measures aren't aimed at people earning $300,000.  Let's look at someone earning $1 million.  If they had no deductions they would be paying $460,000 in tax.  The proposal says that they should pay $350,000.  They are still allowed $224,000 in deductions before they hit the minimum barrier.

Aren't I disadvantaged by a proposal like this?

Honestly the reason I decided to write this piece was not because I think it is the right thing or policy (which I do) but it's because the people that need to speak in favour of proposals like this when it is a good idea are those that are earning high incomes.

Does it disadvantage me?  Honestly...no.  I pay my fair share in tax and I don't try and overly tax plan what I do.  I don't skate close to the line and I just checked my last year's tax statement and I actually did pay 35% of my income in tax (even though I earn significantly less than $300,000).  If I earn less than $300,000 and am paying 35% in tax....why is someone earning more than me entitled to pay less tax?

I'm not asking this question in a legal sense.  Of course if you can legally avoid tax you should do so!  That's the whole point of tax planning and I don't think tax planning is a bad thing. You shouldn't pay more tax than you have to.

BUT there are always going to be loopholes that people miss and that politicians don't want to fix for one reason or another.  A blanket rule helps insure that people can still pay less tax and minimise their tax but not take the system for a ride.

Why do I like the rule so much?

Why do I like the Warren Buffet rule enough to break my 'no talking about politics' rule?  Simply because it is neat, effective policy which is being slammed by those who have a very clear interest in keeping the system as it is.

Why is it neat?  Well everyone is going to have some legitimate deductions and those legitimate reductions are probably going to increase as your income goes up (for a variety of reasons).  The Warren Buffet rule doesn't get rid of deductions, in fact it doesn't really change the tax code at all.

Feel free to use all the deductions you want but there is a cap.  There is a point at which you should still be contributing to the system and a point at which people who are earning significantly less income than you shouldn't be paying more tax than you.

If the rule is designed well you could have unused deductions carrying forward into future periods.  Maybe a high income earner will never pay more than 35% and maybe that's where structuring takes us but at least they are still contributing to society and the system that we are all a part of.

Have I missed something?

Look I'm not claiming to have analysed this situation perfectly.  Maybe I've missed something.  Maybe there is something behind all the furor.  Can you see something I haven't?  Is there some reason why this isn't a good idea?

One reason I've seen touted is that high income individuals will just move overseas.  I don't buy this argument.  Tax rates are already lower in places like Hong Kong and the Middle East.  If people were going to move for tax reasons they would have already done so,.

But is there something else?  I would love to hear what you think!

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Monday, 3 August 2015

July 2015 Net Worth: $592,000 (+5.6%) and Goal Tracker

My net worth increased by ~$32,000 and although I'd love to say it was because of some incredible investing on my behalf the answer was actually far simpler than that.  I got married during the month and we asked for cash gifts to help fund our honeymoon and people were far more generous than we could have imagined.

There were other incremental positives as well.  The share market bounced back after it's atrocious month last month and I slowly started to pay off my credit card debt.  There were also other swings and roundabouts which I will go into further detail about later.

In this month's round up I also look at the goals we managed to tick off during the month and I start to track the goals that I set at last month's 2015 Annual Review.

Thursday, 30 July 2015

Why did investment loan interest rates just rise?

Recently I wrote about how this was the golden age for mortgages, how the current rate environment couldn't last and how you should think about refinancing your home loan to save you thousands of dollars.  I thought interest rates would increase at some point but I certainly didn't predict it would happen this fast.

If you're an Australian investor you may (or may not) have noticed that the interest rates on your mortgage jumped significantly last week.  That's because most of the major banks (led by ANZ and CBA) increased their investor loan variable interest rates by 0.27%.

Unlike most rate rises and falls this was not driven by a change in the Reserve Bank's cash rate nor was it driven by external costs of funding.  It was caused by the financial regulator (APRA) deciding to slow down the growth in lending to investors which have been driving a bubble in Australia.

Who does the rate change affect?

Monday, 27 July 2015

Why I gave up my Investment Property and moved into it as my own home

A few years ago I asked the question: 'Should move into my investment property?'.  It didn't make the greatest financial sense and in fact it didn't grant me the lifestyle I was looking for as a young, single bachelor.

Fast forward 3 years and all that has changed.  I'm now married and my wife and I we made the decision to move into my investment property...it was the right thing for us to do at this time.

So what changed?

When my wife and I sat down to work out where we wanted to live when we got married we actually decided to keep the investment property as an investment and to move into another rental as we saved for our own place.

This is not what my wife wanted.  Unlike my outlook on life her every decision is not dictated or influenced by financial considerations.  She wanted to live in her own home with a garden.  She didn't mind where it was either.

I was far more picky.  I couldn't be more that 45 minutes from the city, I wanted it to be in a decent area, close to public transport and to amenities. Unfortunately most of the houses which combined decent land size and good areas were well out of our price range...hence the decision to rent.

One concession I did have to make was that we would be in our own home by the time we were looking to have kids.  The property market is so hot in Australia at the moment and buying another property in this kind of environment is definitely not what I was looking to do! 

That being said I made that concession because my wife really doesn't push me all that much in terms of financial issues and this was one thing she was adamant about.

Fate intervened unexpectedly

You may remember that last year I had a mild panic attack when I raised my rent on my tenants and they never responded...had I just lost amazing tenants by being too greedy?  All was well though because on the date the rent increase came into effect they just started transferring the new rent amount.

This year I knew something was up when they didn't sign a new lease even though I offered them the ability to sign a one year lease at exactly the same rent they were on last year.  Sure enough a few weeks before my wedding they gave their notice of intention to vacate and their due date to move out was 4 days after my wedding.

Deciding whether to move in became purely a financial decision

My rental property is great and I've always been glad that I bought a suburban family home however it is not a 10 year house either for my wife or myself.  I'm not the biggest fan of the area and my wife wants more land to garden.

What it is though is a perfect interim place to live.  Somewhere we could live for 3 or 4 years while we save and look for our next place.

So the decision became...is it worth getting another tenant in and us find another place to rent for a shorter period of time or do we give up the rental income and tax deductions and move into our own place?

Pros of moving into the rental

  1. I needed to do quite a bit of work on the property and doing this while tenants are in there is quite difficult
    • Things like repainting and carpeting as well as replacing a fence have all been on the things to do list for years and being there myself will help me get this done

  2. Putting off buying another property for a few years
    • Earlier I mentioned that I was incredibly wary about the current state of the Australian property market.  If we hadn't moved in the pressure to buy a place from my other half would have been intense!  I have managed to push this inevitability back 2 to 3 years
  3. The rent I was receiving on the property was approximately $40 a week less than what we were looking to spend on a rental
    • Normally the interest deductibility of your investment loan would needed to be counted in this valuation however my property was positively geared so I wasn't actually getting any benefit from this.

Cons of moving into the investment property

  1. It was an area that I wasn't too keen on living in.  
    • The area the investment property is in is great if you are raising a family but it is useless if you want things like convenience to the CBD, cafes etc.  However given my wife and I are looking to start a family soon the family aspect of it suddenly becomes far more compelling
  2. It reduced the imperative to save hard for our own home.  
    • I think people save for a variety of reasons.  My wife is brilliant at saving if she has something to save for.  My major concern was thay by living in our own home already thay she would not have the same motivation to save.  If I'm going to honest this is still a concern and I'm testing ways to keep us on track
  3. All the repairs and expenses that are part of home ownership are no longer tax deductible.  
    • This is a very real downside and it bit me in the backside almost as soon as I moved into the house
    • I suddenly had to paint, fix fences and repair burst water pipes all without the benefit of being able to claim the expenses back on tax.  Some of the bigger jobs I will keep receipts for and add it to the capital value of the property (and depreciate it later when it goes back to being a rental) however smaller jobs I will no longer be able to deduct.

After weighing up all these pros and cons we decided to move into the property...so what swayed it for us?

So why did we decide to move into the Investment Property?

Although we came to the same conclusion my wife and I reached the decision to move into the investment property for quite different reasons:
  • I saw it as a financially neutral decision which allowed me to put off buying into a hot property market for a few years.  The risk to this approach is that we take our foot off the wealth building accelerator because we are comfortable.
  • My wife saw it as an ability to get into our own home ahead of children which provided stability.  The risk from her point of view is that we don't actually move after a few years and she doesn't get her garden.

I'm learning that relationship finances is as much about finding common ground even if they are for completely different reasons rather than always compromising what you you both want.

So what do you think about my decision to move into my investment property? Would you have done something different?

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Wednesday, 22 July 2015

June 2015 Annual Report

The last year saw so many changes in my life and as I look at the financial impact of these changes it really struck me once more that you can't look at your financial life without examining your whole life.

Your financial life and position is a direct reflection of the whole life that you choose to lead.  As a very simple example if I had not been preparing for a wedding this year I probably would have had significantly more saved towards my house.  That being said if I wasn't looking at getting married in the short term I probably wouldn't be looking at saving for a house.

This was a transition year for me.  It was a year where things other than finances took centre stage and I didn't mind that...the work I had done over the past 4 or 5 years had put me in a position that a bunch of life changes were not going to significantly impact my life.

For those of you who read my blog regularly you may have noticed that I plan my financial goals with a December year end but I do my annual review on a June year basis.  This is purely a matter of history.  I started this blog in June 2010 and the logical time to do an annual review seemed to be a year after that point.  I have thought about changing that several times however it always provided a useful midpoint review of both my goals and my progress.

Goals: Achievements and progress

Thursday, 16 July 2015

June 2015 Net Worth: $561,000 (-0.9%)

After an incredibly strong performance last month, this month saw my net worth slip by almost 1% driven almost entirely by an incredibly weak Australian share market.  In this post I'm going to highlight what happened to my net worth this month, what drove most of the chances and where I am heading in the future.

In the coming week I will also upload my annual performance review which tends to give far more detail about how my portfolio is structured.  My apologies for the late posting of this month's net worth.  I was on leave from work (and my computer) for a few weeks as I was getting married and moving home...I will also post more about what is happening on the personal front soon.

Before I take a deep dive into my performance this month let's have a look at the headline numbers.

Monday, 22 June 2015

Niche Website Update - June 2015

This is a new series of posts that I'm going to be doing tracking how my niche websites are doing.  Up until this point I have just been referring to one website (Banker's Pitch) however when time permits and once Banker's Pitch has settled down I plan on creating several more niche websites.

I don't know whether this is a strategy that will work for me but I'm keen to find out!

Monthly performance for May 2015

This month was all about getting my website up to speed.  I also spent some time optimising the site to get better search results.  These efforts were not in vain as you can see from the traffic results below:

As you can see the number of sessions in May was more than double that in April.  Some of that was a bump I received from people on this blog but a lot of it had to do with the fact that I was starting to get ranked much better in Google for some of my keywords.

I'm still not getting any meaningful revenue from the blog however monetisation is not one of my top priorities at the moment...I'm still trying to generate traffic and get my blog name out there.

Below I have outlined a breakdown of some of the activities I have been undertaking to try and get the website up to date.

Monday, 15 June 2015

Negatively Gearing the Stock Market

This is a guest contribution from Jeremy Kwong-Law

We have a national obsession with property investment in Australia. A key reason is because of the tax benefits of negative gearing. The idea of paying less tax is simply too appealing to most people (who can afford it).

Negative gearing only makes sense if the capital gains on the asset is more than the interest cost. Otherwise paying less tax is really because you are making less money, and losing wealth along the way.

Most people only think of investment property when they think about negative gearing. But there are actually other asset classes where negative gearing can be effective. The stock market is one of those.

Individual stocks are too risky to apply a long term negative gearing strategy. However, index based Exchange Traded Funds (ETFs) could be a suitable option. I previously wrote about why ETFs are a better way to achieve a diversified portfolio compared to direct stock holding (here).

With this concept in mind, I tested a $500K investment in the SPDR ASX 200 ETF (STW) using a negative gearing strategy. A $500K negatively geared investment property in Sydney was the comparison case. I selected the SPDR ETF because it is the oldest index ETF listed on the ASX, providing the most data points.

Over an investment time-frame from 1 Jan 2005 to 31 Dec 2014, the investment property offered better outcomes through negative gearing:
  • Return on Equity on the property was 206% compared 104% from the ETF
  • Total tax offset for the property was $214K compared to $116K from the ETF

 Despite this, the analysis shows that negatively gearing the Aussie stock market is a viable option. In fact, ETF offered a few benefits compared to property investment:
  • Lower entry cost - A deposit for an investment property is likely to cost more than $100K, whilst you can start an ETF portfolio with a few $1,000s
  • ETFs are much more liquid than property
  • there is a lot less hassle compared to property investment. ie. no need to manage tenants / real estate agents
  • lower transaction costs - buying an ETF is as cheap and simple as buying a stock with your online broker. Buying an investment property is difficult and expensive. You need to consider legal fees, stamp duty, and other costs


To fund the two investments, I assumed a loan at 65% LVR or $325K. This leaves a $175K equity / cash investment at the start. The mortgage's variable rate is based on the RBA’s published rate across the 10 year period. The Margin Loan for the ETF is assumed to be 2.85% p.a. more expensive than the mortgage. This difference is the spread between a CommSec Margin Loan and a CBA mortgage as at May 2015.

Both loans are repaid on a monthly basis, to the same dollar value. At the end of the 10 years, principal outstanding is $256K (79% of the initial loan amount).

Running costs & other tax offsets

The cost of the ETF is completely absorbed within the unit price so there are no other fees to pay - ever. For the investment property, there are a few costs:
  • Real estate agent management fee of 6% of rental income;
  • Depreciation on the property - I assumed 40% of initial investment is depreciated (some consultants suggest you can depreciate up to 60%!).


The ETF pays a semi-annual dividend. Over the 10 years, it provided an average annual yield of 4.7%. I did not factor in franking credits.

The property starts off at 3.5% gross rental yield. Rent rise every year in December, at the rate of Sydney rental growth (ABS data). Over the period, average annual yield is 3.8%.

Asset Value

Property value in Sydney achieved big growth in the past decade, gaining 58%. The $500K property in Jan 2004 was worth $792K in Dec 2014. The Aussie stock market didn’t do as well over this period. The ETF share price increased from $40.79 to $50.25, a rise of 23%.

The higher asset value growth of property also translates to much higher equity value growth. Equity in the property grew from $175K to $536K, an impressive 206%. The ETF equity value grew from $175K to $357K, a 104% increase.

Tax offset vs cash flow

Obviously this whole strategy is about tax offsets - both investments achieved this. The property had tax offsets of $213K over the 10 years, whilst the ETF offered $117K of tax offsets.

Interestingly, the property offsets were achieved with lower impact on cash flow. Negative cash flow for the property investment was only $82K over the 10 years. The ETF had $117K of negative cash flow. This is mainly because property is able to claim non-cash tax deduction in the form of depreciation.

What does it all mean?

This is another example how why Aussies love investment property and negative gearing. You can achieve strong net wealth growth and tax offsets - a double whammy. This also shows that a negative gearing strategy can be applied to other asset classes.

Investing in ETFs is a way of achieving negatively geared investment in the share market. A core benefit of ETFs over individual stocks in this content is diversification - reducing risks. The risk of investing in a Sydney property and the SPDR ETF was similar in the 10 years. Sydney property prices had a standard deviation of $83K, whilst the SPDR ETF measured in at $84K.

On the face of it, investment property seems to be a more compelling investment class. They offer higher returns, more tax offsets and lower negative cash flow. However, I didn't account for a few things that are negative for property investments:
  • stamp duty and other taxes;
  • vacancy risk - if you can't rent out your property you get no income;
  • significantly higher legal fees;
  • higher transaction costs when you sell the asset, real estate fees of at least 1%.

The high cost of entry is also a critical issue for investment property. Currently, 1-in-3 Sydney suburbs have median home price of more than $1M. The initial cash deposit required is well north of $100K. For younger investors, this is a tough ask – an idea of reaching that deposit sooner is HERE.

Younger investors can explore the benefits of negative gearing through other asset classes. The asset must be able to achieve higher capital growth than the interest cost. One obvious option is the stock market, which usually delivers higher long term returns than all other asset classes. If negatively gearing the stock market is an interesting strategy, an investment in index based ETFs are a good option to start.

Do you negatively gear the stock market?  Share your thoughts in the comments below!

Jeremy Kwong-Law (@jeremykwonglaw) is Cofounder of www.BetterWealth.com.au. He is a former investment banker turned technology entrepreneur, a muru-D alumni (Telstra startup accelerator). Passionated about leveraging technology to provide better financial products & services to consumers. Coffee snob, business book reader, and fitness fan.

Tuesday, 9 June 2015

How do you keep track of your share trades?

It's coming up to tax time and normally at this time of year I write a post on how you should start to think about your tax time affairs and start to get your affairs in order.  This year however I'm going to do something different.  I'm going to present a problem that I have...the solution I current use...and see if you have a better solution to this problem.

Problem: I don't have a good system of keeping track of my share trades for tax purposes

One of the biggest problems I have as someone who buys and sells shares is keeping track of the trades for tax purposes.  

It's not that I don't record every transaction that I make - I do and I am meticulous about it.  The biggest problem is working out the tax implication of every sale that I make.
The problem I have is keeping track of working out what is the optimal parcel of shares to sell and the number of shares remaining in the parcel
The problem really exists where you have bought shares over a period of time, either through dollar cost averaging your way into a stock or when you have been participating in a DRP and have been accumulating shares

Monday, 1 June 2015

May 2015 Net Worth: $566,000 (+2.6%) and Goal Tracker

I just had one of my best months ever in terms of net worth performance and it was completely unexpected.

I'm actually also getting rather close to $1 million in assets which is exciting (although as it comes to crunch time for my wedding my cash balance is going to go significantly which will take me further away from this point).

Before I dive too deep into the detail let's look at how this month panned out for me in terms of my net worth and savings goals.

Tuesday, 26 May 2015

How is my Investment Banking Website going? May 2015 Update

Just over a year ago I launched Banker's Pitch, a website dedicated helping aspiring investment bankers get in, make the most of their time in Investment Banking and then get out to other careers. As an ex-banker myself I definitely thought I had knowledge that would be valuable to others out there.

However it wasn't purely altruistic.  I also wanted to generate an income from this site.  I had a plan - both in terms of content (the topics I would write on), marketing (how I would get the word about my site out there) and monetisation.  At a very basic level my plan looked something like the following:

  1. Create awesome content
  2. Let people know that the content exists
  3. Reap the rewards for my hard work

Things didn't quite go to plan...

Ahh I'm such a planner but with my business ideas and projects things never really seem to go to plan.  I got my website up and running and created some kick-ass content but I choked on the marketing aspect of the project (and as a consequence the rewards definitely didn't flow my way).

Marketing does not come naturally to me.  Whilst I'm more than happy to let my network of friends and colleagues know what I am up to and promote my material that way, commenting on related blogs and building an online network is not something I'm really good at.  This is something I definitely I need to work on.

Because I wasn't out there promoting my material I was barely getting any visits at all to the site which in turn makes it pretty challenging to keep generating awesome content.

I was depressed at the lack of progress I was making...and then one day I just stopped writing...

 It wasn't a conscious decision I made to stop writing...it just kind of happened.  The last scheduled post I had went out and I couldn't get up the will to write any more.

But then recently I noticed something about Banker's Pitch

Banker's Pitch was honestly the last thing on

Tuesday, 19 May 2015

What does Financial Freedom look like to me?

When I uploaded my recent post on what I would need to be financially free I didn't realise the impact that it would have on my life and the way I thought about it.  I did it because I thought it would be a cool thing to do and to track.

However thinking in terms of financial freedom has really changed the way I look at my approach to wealth generation.  Previously (as the name of this blog would suggest) it was all about becoming rich.  I didn't really have any plans for those riches...it just seemed like the right thing to aim for. Financial freedom is something else though...it allows you to choose the lifestyle that you want, when you want.

What does it mean to be financially free?

People describe financial freedom in a variety of different ways.  For some people it's about not having to wake up every day and go to work.  For others it's about having a security blanket so you know that you are never going to end up on the street.

Here is the definition I am using:
To be financially free is to be able to choose what I want to do, when I want to do it and not worry about the financial consequences of my decisions
Why did I underline the word 'worry' in the sentence above?  Well that's because most decisions have financial consequences.  Some of them large and some of them small.  If you run your own business, your decision to take a few months off can have huge financial consequences.

I'm not aiming for a system where

Thursday, 14 May 2015

What do you like on this blog and what can be changed?

Today I'm asking for your help and advice.  I have been writing this blog for almost 4 years now and as I approach the 4 year anniversary of this blog I'm considering making some big changes to it.  So I have two questions for you:

  1. What do you like about this blog?  Why do you read it and what do you get out of it?
  2. What can be changed and what would you like to see more of?

Why do you visit Journey to 90 Million?

I confess that I'm not 100% sure why people like visiting this blog.  I get great traffic but honestly some of the traffic baffles me.  Occasionally I'll spend hours writing a post with a huge amount of research behind it and it will only get 30 or 40 views.  Other times I will spend far less effort and that post will become incredibly popular and have visitors coming back for years.

So why do you visit the blog?  I certainly don't want to make assumptions about what people get out of it so send me your feed back.

What can be changed?

What do you tend to skip over when you visit the blog?  Is there something I used to do which I no longer do which you liked?  I know the format and design of this blog is incredibly outdated - this is something that I am working on...is this something that bothers you?

I have a pretty thick skin so feel free to lob any criticism that you like...it's all a learning process.  When I started this blog I knew nothing about blogging and honestly half of what I've learned is because I've made some pretty big mistakes in the past.

Feel free to post in the comments section below or send me an email at 90millionblogger (at) gmail.com

Thanks heaps in advance and I'll be back to posting regularly next week!

Monday, 11 May 2015

How much do I need to be financially free?

When I first started writing this blog I stated that my goal was to have $90 million dollars by the year 2031.  I gave myself 20 years to reach that goal of and to be rich.  However a question I haven't really considered before is "how much do I need to be financially free?".

Being rich is great but the real step change in ones life is when they are financially free.  When they are no longer tied to their job and have the freedom to choose what to do with their life.  I was recently reading a post on 2millionblog (the blog which motivated me to start writing this blog actually) where the author had a clear target for financial freedom and was measuring his progress towards this target.

I thought this was a brilliant idea and I've decided to give it a go myself.

Step 1: What sort of income do you require?

According to various sources a 'comfortable' retirement for older people is something like $60,000 a year for a couple in Australia.  I'm not really planning on living like a retired grandparent so I'm probably going to need more than this.

Having said that I won't need as much as my current income as when I am financially free I will not have a home loan to pay down and will not have many of the expenses that come with having to go to work and make a living each day.

I settled on $100,000 as the income I would need to be financially free (in today's dollars).  At $100,000 per year I would not be 'rich' but I certainly would not be tied to my job and I would have the freedom to decide whether I wanted to work or whether I wanted to do something else.

Step 2: Work out where this income is going to come from

This is a reasonably simple exercise.  What classes of assets do I feel competent investing in and where do I think I can earn income (and in what proportions).  I split it something like this
  • Cash / Bonds: $10,000
  • Rental Properties: $30,000
  • Stocks: $50,000
  • Business Income: $10,000
Don't forget that

Thursday, 7 May 2015

What health insurance product is right for you?

When it comes to insurance I'm the type of person that is always over-insured.  It's not so much that I think insurance is a great deal...it's just that I tend to up-sell myself to premium products whenever I look at insurance.  This results in me paying far more than I really ought to be paying.

This is especially true when it comes to Health Insurance.  I currently have a very high level of hospital and extras cover when I barely use any of it.  I'm healthy, in shape and have no serious pre-existing or family conditions to worry about...I'm the last person that should have full cover on everything (I even have pregnancy cover...).

I obviously have had the wrong health insurance for a long time (despite promising myself to the contrary) I have done nothing about it and I continue to pay my exorbitant premiums.  However I was recently forced to re-look at my health insurance plans when I was considering my fiance's and my future financial position.

She doesn't have health insurance however she was going to get stuck with both the medicare levy surcharge as well as the lifetime health cover loading in one hit after marrying me (which would affect my tax as well) so we started looking at plans together.

Comparing health insurance plans is incredibly difficult

Let's state this up front.  Comparing health insurance plans is one of the most difficult things you can do.  They all offer different levels of cover, they exclude different procedures and offer different amounts back for the same procedure.  Some offer policy limits and some offer limits per person per year while others have lifetime limits on what you can claim.

With all of this complexity how on earth do you sort it all out?  I like to think that I'm pretty astute when it comes to finance but honestly comparing these plans was about the most difficult thing I have ever done.

I have put together the following step by step guide to help you work through the nightmare of health insurance products, premiums and offerings.  Some of this is very similar to my original post 'Choosing the Right Health Insurance' but this will go into more detail.

Step 1: Know what you want and what you need

Before you start looking at any products you need to know both what you need and what you want.  If you don't you're going to be inundated with choice and too much

Monday, 4 May 2015

April 2015 Net Worth: $551,000 (+0.4%) and Goal Tracker

It's once again time to update my net worth and this month has seen some serious swings in the composition of my net worth even though the actual numbers didn't change all that much.  I continue to keep track of my 'future liabilities' (see this post for an explanation of them).  As at the end of April my future liabilities sit at $43,000 (down from $52,000 in March).

April 2015 Net Worth: $551,000 (+0.4%)

% Change
Net worth

My performance this month at the headline level was actually quite lackluster and didn't quite live up to the modest $553,000 goal I had set at the end of last month.  However under the rather flat result there were a more movements and portfolio changes than I have had in a very long time. I've outlined some of the changes that were made this month below:
  • A significant re-organisation of my share portfolio
    • Recently I have been talking pretty consistently about how much the Australian share market has run and how I have been starting to get uncomfortable with being invested at these levels
    • Well in the last month I put my money where my mouth is.  I sold some pretty big parcels of shares...some of which I wrote about and others which are just a continual re-balancing of my portfolio
    • In the month I sold ~$30,000 of shares and made a significant profit...however from a net worth standpoint it was actually a negative
    • This is because I account for the current market value of my shares in my net worth however it is only when I sell them that I actually generate capital gains liabilities
    • Selling the shares therefore didn't increase my asset value but it did increase my liabilities to the tune of ~$4,000

Friday, 24 April 2015

Finding, gaining and keeping a mentor

How do we get ahead in our careers and our financial life?  It's a question that many of us ask all the time.  If you have read any books on getting ahead you will almost certainly have been told that seeking out the right mentors is incredibly important.  The problem that most of us face is twofold:

  1. How on earth do we find a mentor who is where we want to be in life?
  2. When we do find them how do we convince them to take an interest in us?
I suspect that most of us would love to be mentored by Warren Buffet or Bill Ackman but that's never going to happen.  I also have never really liked 'mentoring programs' that workplaces and student organisations typically run.  The mentors often treat it as an obligation and they are never really seem to have a real interest in you personally succeeding.

I therefore concluded that mentoring, while great in theory, was never really going to work in practice...until it did for me.  I found a mentor without actually searching for one and the experience has been far more positive than I originally imaged.

How did I find my mentor?

I didn't go out searching for a mentor.  I've always found the concept quite strange.  Of course there were people I wanted to learn off and I certainly didn't think I could do it all myself...however what did I have to offer?  Why would they take a particular interest in my life?  I found a mentor without intending to find one.  I'm not even sure that he realises that we have effectively fallen into that sort of relationship.

Where did I find my mentor?

My mentor is actually a

Monday, 20 April 2015

Why haven't I bought a second investment property?

When I first thought about buying an investment property I imagined that it would be the start of a property portfolio that would grow incrementally over time.  However almost 5 years after buying my first investment property I still only have one property.  Why haven't I bought more and why am I not some sort of young property baron?

My decision not to buy more properties was by design...

I actively decided not to buy more investment properties.  I could have done it several times and I definitely had the finances to do it.  My decision to stick to one investment property (for the moment) was by design and not through laziness or lack of opportunity.

I want to own a diversified portfolio of assets

My desire has never been to be a property baron.  Whilst I do want to be financially secure / well off and to reach my $90 million target I don't think that this needs to be within one investment class.  I want to own property, shares, bonds and alternative investments.

Owning an investment property puts a whole heap of your assets in one bucket.  Even if you can use a small deposit and use your cash to buy shares your actual exposure to the property market is still incredibly high.

If you want to own a physical property the fact is that you will be overweight that asset class for a very long period of time until everything else can actually catch up.  One of the reasons I haven't bought another investment property is that I was building up my other portfolio of assets during the last 5 years.

Your own home is an investment in the property market

When I was young I was very taken by Rich Dad Poor Dad.  I thought provided me with incredibly revelations that I had been completely missing before.  Once I did a bit more research and actually educated myself a bit more I realised that the book actually provided very little other than an idea of "you too can be rich".  

One of the core ideas that Robert Kiyosaki pushes in that book is that your home is not an asset because it takes money out of your pocket each month.  On face value this seems to be a true statement.  How many of us actually make money from our homes?  However the more I thought about the less I believed in this statement.

Your home is an asset.  You can spend too much for an asset, you can over-invest in an asset and you can over-capitalise an asset.  And most importantly not all assets put money in your pocket each month.  If you invest in physical assets (such as gold or oil or silver) they will typically take money out of your pocket each month due to storage costs and they certainly don't give you any cash until you actually sell the asset.  This is the same for your house.  Also owning your own home helps you avoid a cost - i.e. rent.

In fact your home is often one of the most tax advantageous investments you can own (in Australia).  You don't have to pay capital gains tax on your home and it is exempt from almost all forms of asset tests.

I don't own my own home (one that I live in) yet but it is definitely on the horizon. When I buy this home it will be an additional exposure that I have to the property market...and I will need to balance my other investment classes before I even think about buying property #3.

I can own additional property exposure through listed property funds and companies

I have written about buying listed property funds and companies before.  The major benefit of them is that you can buy them in small parcels and get exposure to sectors of the property market that I wouldn't normally be exposed to.  The major disadvantage of these types of investments is that you have much less control, the ability to leverage this investment is less and you have to pay fees on top of the natural costs.

I actually have a fair bit of exposure to the property market through listed funds although I have been reducing this lately.

The market doesn't look attractive to me at the moment

I'm a bit believer in value investing.  That is - putting my money to work where I believe there are fundamental traits which will make the investment more valuable in the future (even if these take a little while to realise).  At the moment I can't justify buying another property and increasing my exposure to the market.

If there was a crash or an amazing buying opportunity came my way I would not hesitate to go for it...but this does not seem likely in the current market and in the near term.

Over time I will probably buy more properties...but not right now

I don't have a problem with property investments in general.  In fact I think they are some of the easiest to understand and to own however like all investments you want to understand why your investing in something and have a thesis about how and when it will make you money.

Over time I will probably buy more properties and continue to hold onto them however this is not the right time for me.

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Thursday, 16 April 2015

Financial questions to ask BEFORE you get married

You don't have to be a regular reader of this blog to know that I'm interested in finance.  Almost everything I write about is finance related and I am quite content sitting down and reading a finance book for hours on end.

I am also quite open about finance with those I talk to and am friends with.  Whilst I don't disclose how much I earn or what I am worth to those who know me I will happily talk about money and finance with anyone who would like the discussion.

With that sort of background you would be forgiven for assuming that I had had every single discussion necessary about finance before entering married life.  In fact I thought that is the one area that I had nailed down and that we didn't really need to talk about any more...but I was incredibly wrong!

There are a range of topics financial topics you need to talk about before committing to another person

I honestly thought I had covered all of the financial topics possible with my future wife.  We knew how we were going to save for a house, how we were going to pay the bills, what we were going to do when kids came around...everything...or at least I thought so...

One of the things people highly recommend is doing a marriage course so my fiance and I went along to one of these courses which gave us a huge multi choice questionnaire which covered a heap of different topics.  At least 30 of the questions covered finances and how much we had discussed them...and they covered incredibly important topics that we hadn't even touched.

Instead of just writing about my experience I thought I would make a list of topics that you should discuss with your significant other before you get married.  This list isn't exhaustive and if there are other things that concern you then you should definitely talk about them!

Financial topics you should talk about before getting married

Broadly speaking the things you should talk about fall into a few broad categories
  1. Life plans and preferred lifestyle and the income you will need to support these
  2. Attitudes towards spending and saving
  3. Debt, current and future and how this will be incurred
  4. Savings, goals and how you will achieve these
  5. The day to day organisation of your finances

1. Life plans, lifestyle and generating the income you need to support this

This is the first thing you

Monday, 13 April 2015

Refinancing your mortgage can save you THOUSANDS

Home loans are a funny thing.  They are probably the biggest liability that most of us have and we research them to death when we actually get them but once they are set in place most of us fall into the pattern of paying them off as fast as we can without thinking about whether we can get a better deal.

Sometimes the deal we are on is so good that we want to hold onto it for as long as possible.  However when competition heats up between banks in the home loan market (as is currently happening in the Australian market) you can often save a lot of money by renegotiating your home loan or moving to a different provider altogether.

How a great deal when refinancing your mortgage

Getting a great deal when refinancing your mortgage is basically being able to do 3 things:
  1. Know exactly what you want and need from your mortgage;
  2. Knowing everything you are currently paying for your mortgage and all the benefits you are getting; and
  3. Leveraging the best offers in the market with the financial institution you want to deal with

Step 1: Know exactly what you want and need from a mortgage

This is the most important

Friday, 10 April 2015

Importing my Japanese Sports Car...Step 4: Getting the car in my hands

After an agonizingly long 3 month wait my sports car (that I have been posting about for years) finally arrived in Australia.  Unfortunately I couldn't just drive the to the port and pick it up off the ship.  There were several steps the car had to go through before I could get it in my hot little hands.

If you have stumbled across this post and are wondering how to get a sports car into Australia (and why you may want to do so) I have written a series on my experience from buying the car, to getting it onto the ship and then getting it to Australia.  This is my final post in the series and will cover actually getting the car in my hands.

Getting the car compliant with Australian standards

After getting the car out of customs the first thing you need to do is to make sure that it is compliant with Australian standards.  There are a range of things that need to be done to a car to take it from compliant on Japanese roads and make them compliant for Australian roads and these are different for each car.  The cost is also different for each car.

For my V35 Skyline the cost was

Tuesday, 7 April 2015

I FINALLY made money from a Share Purchase Plan

If you have been reading this blog for a few years now you will know that I almost always get shafted when it comes to share purchase plans (or SPPs).  My investment rationale is always sound however I am always shafted by the mega scale backs that come with guaranteed profits.

Interestingly this time I ended up with a larger profit because the end result wasn't as guaranteed as in the past.

A recap on how to make money from Share Purchase Plans

I have gone through this in a significant amount of detail before but basically you make money from share purchase plans because
  • You are able to buy shares at below the current market price (often in excess of your pro rata entitlement)
  • If the current market price is higher than your purchase price from the share purchase plan you have made an (almost) instant profit
Basically the bigger the discount is to the current market price the more certain you are of making a profit.

However the big downside to SPPs (as I mentioned above) is that because the profit is so certain everyone wants to take part and everyone applies for their maximum allocation.  Companies often don't need this much money and scale back your allocation significantly.  They also don't issue the shares for a long time and take even longer to return your money.  You therefore lose out by having lost the ability to earn interest on this cash in the interim.

I participated in the recent Macquarie Group SPP...even though the terms didn't look as good

Macquarie Group (ASX: MQG) recently decided to do an institutional equity raising and an SPP to raise cash for a purchase that they had done.  When I first looked at this deal it didn't look great at all:
  • Macquarie's share price was already incredibly high.  
    • I was actually looking to sell out of my MQG shares after years of holding them
    • A high share price isn't great because it can go anywhere in the time it takes for you to be allocated your shares and able to sell them
  • The discount was tiny
    • The higher the discount the higher the guaranteed profit.  In the case of Macquarie SPP it was only a 1% discount which is not really worth your time and effort (especially if you think the stock is expensive)
  • They weren't actually issuing that much capital
    • Relative to the size of Macquarie this was actually a really small capital raising.  In smaller capital raisings you are more likely to get scaled back which is the thing you want to avoid at all costs

This deal on the face of it didn't look that good...so why did I participate?

There were a few key points in the fine print which caused me to participate in the deal.  They included:

Wednesday, 1 April 2015

March 2015 Net Worth: $549,000 (+2.2%) and Goal Tracker

I love updating my month end net worth post.  I actually don't spend that much time during the month focusing on it because unless I'm actively changing something in portfolio it does me no good to keep track of where I am day to day.

This post includes a category of liabilities I included recently called "future liabilities" which is where I account for the fact that I have committed to spend a certain amount on different activities and that some of the cash on the 'assets' column of my balance sheet are actually already accounted for.  At March 2015 my future liabilities balance sits at $52,000 - a significant drop compared to last month.

March 2015 Net Worth: $549,000 (+2.2%)

% Change
Net worth

My performance this month was actually much better than the $540,000 I was originally aiming for.  It was really driven by a reduction in my future liabilities balance (which I discussed above) with some other small positives along the way.

Below I have outlined some of the positive and negative factors which affected my performance

Positive factors

  • A significant reduction in my future liabilities balance
    • My future liabilities balance decreased by ~$13,000 this month.  Although some of this reduction was offset by cash (or an increase in credit card debt) to pay for the expenses, a lot of the expenses were also borne by my fiance
    • We are planning a wedding together and a large part of the liability relates to the wedding and honeymoon expenses
    • For the sake of simplicity I include the whole liability on my balance sheet however she has been saving and paying for significant parts of the wedding and honeymoon as well
  • A large reduction in my credit card bill
    • My credit card balance was abnormally high last month and I have managed to bring this down slightly this month (although not nearly as much as I should have)
  • Continued savings towards my employee share plan and emergency fund
    • My employee share plan is the only guaranteed return I will ever get in my life and I continue to contribute the maximum amount that I can 
    • I will discuss this below but I also continued to save towards my emergency fund
  • A particularly good outcome on a recent share purchase plan
    • I have historically had pretty bad luck when it comes to my share purchase plans however one finally went well for me.  I will write about this in more detail soon.

Negative factors

Unfortunately this month had a slew of negative factors which affected my result including
  • A significant step up in my capital gains tax liability
    • As mentioned before I am starting to feel uncomfortable with the levels the stock market is currently reaching and I am taking the opportunity to sell some of my more overvalued stocks
    • However this has the downside of crystallizing capital gains tax

Monday, 30 March 2015

3 things to consider before investing for dividends

There have always been investors  for whom dividends is the most important element of a share investment.  Growth in share price has not been their primary concern.  Some bloggers (such as Dividend Mantra) have their whole investment strategy built around dividends and replacing their income and achieving financial independence through them.

In the current low interest rate environment this approach has become much more common.  Investors have not been able to get the yield they desire from term deposits and online savings accounts so they have turned to high yielding shares (such as banks and infrastructure shares) in order to get the yield they desire.  Why would you invest in a bank account at 2.5% p.a. when you can easily invest in a bank and get a 5.0% yield on a commercial bank or infrastructure stock?

A problem occurs when some investors look at these stocks and their dividend yields like they would a term deposit which is completely the wrong way to go about it.  This post will try and highlight some of the things you should be looking out for when you invest in stocks for their dividend yield.

Things you should consider when investing for dividends is your focus

There are risks when investing for dividends is your primary focus especially in an environment like this.  Below are just a few of the questions you should be asking yourself whenever you undertake an investment like this

1. If interest rates revert to more 'normal' levels what will happen to the value of this stock?

A lot of high dividend stocks have been driven up in price as people search for yield outside the fixed interest sectors.  If interest rates return to more 'normal' levels and people no longer have to invest in these stocks to get the yield then the value of your investment in these stocks may fall.

This is a function of the current market that you can't avoid and is a risk you need to know that you're taking on by investing in high yielding stocks.

2. What is the outlook for the company that you are investing in?

Dividends can be cut.  It actually happens far more

Friday, 27 March 2015

Importing my Japanese spots car...Step 3: Getting the car into Australia

As many readers would know I'm importing a sports car into Australia for a variety of reasons and I have been blogging about this along the way.  Part 1 of the series outlined the process of finding, inspecting and bidding for the car.  Part 2 involved all the steps involved in getting the car to the shipyard and all the nasty surprises in between.

This post will cover actually getting the car into Australia including the shipping, insurance, customs and tax requirements.  The paperwork and process is actually incredible.  I'm so happy that I paid the $1,100 to have an import broker doing all the work because the number of people involved blew me away.

Appointing an importer and compliance workshop

The first step to get my car into Australia was to appoint a compliance workshop (who also did the import approval process to get my Skyline into Australia).  I was required to put a down payment of $650 for the compliance work and then they swung into action.

Your compliance workshop is basically the place that will get your car legal for Australian road standards.  Different countries have different laws when it comes to car safety and the compliance workshop basically does everything to ensure that your car will be registered (as an added bonus they also give the car a service and change the oil etc so you don't need to worry about it).

Getting import approval...don't forget this step!

Before the car can actually enter