Shopping 101: Buying in bulk is not necessarily the best thing to do

I have posted before about how I moved out of home earlier in the year and doing all those things I had been avoiding doing for years like shopping and my own laundry.  Before you tell me that you moved out when you were 18 and have been doing it for years...that's the exact reason I didn't move out sooner (and I also enjoyed the limited rent I paid my parents compared to what I pay now).

I have been slowly learning the tricks of saving money while shopping.  There are certain days of the week that supermarkets are cheaper than others.  Hint: Monday nights for some reason are terrible for sales and discounts while Wednesdays always seem to have good bargains.  I also recently learned to avoid express convenience stores like the plague.

One thing I learned early on was the benefit of unit pricing.  In Australia shopping centres need to put unit pricing on the price labels so that you as a customer can easily compare which products are cheaper and which are more expensive.  Prior to this law being introduced companies would intentionally make their products odd weights, sizes and shapes so that customers could not compare prices as easily.

However there is a trap with unit pricing

If you are part of a large household that consumes food and other items like there is no tomorrow then you are unlikely to come up against this problem.  As a person living on their own or in a very small family unit:

Unit pricing may encourage you to buy larger quantities than you actually need which can actually COST you money

If you are sensible about your shopping and know what you want to buy and you are reasonably frugal so don't want to spend more than you have to...you will automatically we drawn to bulk type items which sell for significant discounts compared to their handy smaller counterparts.

There is nothing wrong with this approach and with stocking up if the product you are buying is not perishable.  However when it comes to food you may save 20% on the unit price if you buy in bulk...but if you only end up using half the product (which has

The free market is NOT perfect: "Knowing" Economics 101 is not enough

I have been thinking about this topic for a while actually and have spent the last week writing down my thoughts on it on various scraps of paper because I thought that I could make it into a series of posts which outline why I am not, nor have I ever been, a believer in the free market.

This may seem strange coming from an ex-investment banker, turned investment professional and also as a person who writes a blog tracking their wealth journey and sharing what my goals and aspirations are.  However I should state up front that government control is a sliding scale - an economy is NOT either free market capitalist or planned socialist.  There is no pure free market capitalist economy in the world just as there are very very few remaining planned socialist countries in the world.

Why did I start thinking about this?

I was motivated to think about this issue when I was watching some clips about the Tea Party movement in the US.  The whole movement struck me as fundamentally odd...the people protesting and joining these movements looked like those who most benefited from government programmes and assistance.  I also wondered about the economic policies and catch phrases that right wing politicians and free market advocates often throw out there which are so simplistic that they are effectively wrong.

And then it struck me...most of the general public has some appreciate of basic economics - they can see, think about and visualise simple economic concepts in a very real way around them.  However I do not believe that most of this same public has an innate understanding of the assumptions that underlie these 'simple' principals nor the consequences of what they are asking for when they demand a free market economy.

As I was thinking about how I would approach this series of posts though, one of my economist friends sent me a link to this article which explains how and why Econ 101 is killing America.  It is one of the best and most succinct articles I have ever seen.  It busts many of the myths that the general public has in their mind.  I highly recommend reading it.

Why does it matter?

It matters because as these movements start to gain steam and momentum, politicians and policy makers start to take notice.  There are some who would

90Million Blog's 2 year anniversary!

Earlier in the week I realised that this blog has been up and running for 2 years now which has amazed and surprised me.  This blog has morphed from one which I posted in occasionally and was really a way of holding myself to account for my financial performance to one where I try and comment on those things which I am constantly learning on my wealth journey.

I wanted to say a big thank you to all the readers, commentors and those who send me emails with suggestions, ideas and questions.  It has been great to communicate with others on their wealth journey!  The number of people visiting the site has grown exponentially and I hope that I am providing some value and perhaps a little bit of light entertainment and procrastination for my readers.

In the coming year I am hoping to:

• Get guest posters on this blog:  There are some topics which I am genuinely interested in but know very little about and I would love to get some guest posters who have much more experience than me in the financial world to share some of their advice
  
• Re-design the blog:  I honestly did not think about the

The share market has gone mad...when bad news is good news

The financial markets and the investment world generally has gone mad.   When bad news is good news in the stock market and I see headlines in the financial news saying that the stock market rallied on weaker than expected financial news or that it was weaker on better than expected news you know that the markets are not working in their proper way and that something out of the ordinary is happening.

Even if you do not follow the financial markets closely you cannot have failed to notice the stock market tanking over the last month.  Indeed most major stock markets have lost the strong gains they have made since the start of the year.  One of the major causes of this was an announcement by Ben Bernanke of the US Federal Reserve that the economy was recovering to such an extent that they would consider starting to roll back QE3.

A recap on QE3

When QE3 was first announced I posted about it, what it was and why the share market reacted so strongly to it.

In brief QE3 was the US Federal Reserve printing money and buying back US Treasuries and mortgage backed securities to provide liquidity in the market

This was to force down interest rates and force lending to start as the yields on these products were depressed to levels so that people would have to invest elsewhere.

QE3 was only ever going to be a short term measure! 

You cannot continue printing money into infinity in order to provide liquidity in the market.  It was only going to be a short term measure to get the economy kick started again and guess what?  It worked.  The US economy started to recover strongly with economic growth rebounding and the share market reflecting this

So why did the market react so negatively towards the announcement that it would be scaled back?

I personally think that much of it has to do with how short term investment managers and profit makers are these days.  In the short term you would expect the share market to pull back as yields recover

June 2013 Expenditure Tracker

As I mentioned in my June 2013 net worth post my personal expenditure was off the charts this month due to having to repay very high credit card bill and this impacted my ability to save and invest this month.  I am really struggling to keep my personal expenditure under control which I have discussed further below.

Item	June 2013	Target	Over/(Under)
Share Investments	+$6,094	+$2,000	+$4,904
Offset Acct.	-$3,926	+$3,500	-$7,426
Personal expenditure	+$5,815	+$2,200	+$3,615

The major movements in my 3 accounts are discussed below:

• Share investments
• This month I both bought some shares on market and transferred funds into my share trading account
• Unfortunately I moved far too early and the market continued to be weak right through the month
• The poor sharemarket performance, while creating opportunities to buy which have not been available of late caused me to have my first negative net worth performance since I started tracking in June 2011
• I also continued to contribute to my employee share plan
  
• Home Loan offset account
• As I will discuss in my personal expenditure section, I actually did not contribute as much as I would have liked to to this account because I did not have the cash to

Net Worth: 2013 Financial Performance Summary

Yesterday marked 2 years of me writing this blog and of tracking my net worth to my target of $90 million.  It has been an up and down year for me both in terms of my career, my personal life and the focus of this blog, my wealth journey.

When I wrote this same post last year to mark the one year anniversary of my blog I set my target for the 2013 financial year of $500,000 which was very ambitious at the time and I needed to start generating some new sources of income to get to this level.  I started thinking up business ideas and actually got fairly advanced in some however this never get off the ground for various reasons (including personal ones).  My performance for the last 12 months can be seen below:

Some of the changes that have occurred over the last 12 months include

• An increase in assets from $599,000 to $724,000 (+21.0%)
• An increase in liabilities from $355,000 to $356,000 (+0.4%)
• An increase in net worth from $244,000 to $368,000 (+51.1%)

In absolute terms this was actually a very similar performance to the 2012 financial year.  In that year my net worth increased $120,000 whilst this year it increased $124,000.  Compounding would normally have more of an effect however in the 2012 financial year I was still getting paid an investment banking salary and bonus which I did not get in the last year.

I have also included below a chart which shows my performance from when I started tracking my performance in June 2011.  In this time I have seen

June 2013 Net Worth: $368,000 (-0.8%)

	Value	% Change
Assets	$724,000	-0.6%
Liabilities	$356,000	-0.5%
Net worth	$368,000	-0.8%

This completes the second year of my net worth tracking series and I will post a year on year analysis as a summary of how I have been going since I started tracking my net worth shortly.  However as per usual this post will focus on how I performed for the month.

I am disappointed to say that, as you can see above, this is the first month in which I have recorded a negative net worth performance since I started tracking my performance 24 months ago.  This was primarily driven by an abysmal month on the share market combined with an inability to save a great deal as I had a rather big credit card bill to pay.

I have had bad months before on the share market and these have not caused me to have a negative overall performance for one major reason - previously my share portfolio was of a size that even if there was a terrible month, regular savings from my wage could outweigh this.  Unsurprisingly as my wealth has grown, the movements in the share market can outweigh any amounts that I can actually save from my monthly wage.  I knew this was going to happen at some point, so am not overly disappointed to see it.

This month was a confluence of negative factors affecting my net worth including

• A very bad month on the share market
• At one point close to the end of the month my portfolio was down 10%.  Luckily the performance picked up in the last few days and I ended the month with my portfolio down ~7% for the month
• This drove my entire result and outweighed my