I was reviewing my credit card statement this evening and found a transaction from June that I didn't remember making. I had spent a night away in another city, and stayed for 1 night in a hotel. I had booked a cheap rate online using rates-to-go and presented a voucher at check-in which was proof of booking and payment. They took my credit card number for "security" purposes, which I was a bit suspect about, but didn't think too much of.
Anyway, I see that the hotel has charged my credit card to the tune of around $140 when I had already paid over $100 for the night's accommodation. So suffice to say I'm a bit peeved, and have sent a rather terse email to the hotel in question. Which will be followed up by an angry phone call if I don't hear back from them.
Makes you wonder how many people ignore their credit card statements and get fleeced for hundreds...
Thursday, July 17, 2008
Monday, July 14, 2008
Cycle Commuting
Since I started my new job around 6 weeks ago I've started commuting to work by bike. I started this for mainly logistical reasons - my new job has little in the way of convenient car parking, and the cycling time is less than either the combined car and walking time, or waiting for the bus.
Since I've started cycling to work I've suddenly realised how it has so many benefits, and wonder why I didn't do it sooner. For starters it's free - no more paying for petrol or bus fares for the commute; it's good for the environment - 100% green and carbon free; it's good for my fitness; it's fast; it keeps a car off the road and makes life easier for those who need to commute by car or bus...the list goes on.
The downsides? Well, it can be cold or wet. And my chances of dying on the way to work are possibly a tiny bit higher than when I was driving. But apart from that I can't think of many negatives.
So, it's frugal, green, healthy and fast. And it feels great to arrive at work refreshed, alive and ready to face the day. I would encourage anyone who can to give it a go - jump on your bike, I guarantee you won't look back.
Since I've started cycling to work I've suddenly realised how it has so many benefits, and wonder why I didn't do it sooner. For starters it's free - no more paying for petrol or bus fares for the commute; it's good for the environment - 100% green and carbon free; it's good for my fitness; it's fast; it keeps a car off the road and makes life easier for those who need to commute by car or bus...the list goes on.
The downsides? Well, it can be cold or wet. And my chances of dying on the way to work are possibly a tiny bit higher than when I was driving. But apart from that I can't think of many negatives.
So, it's frugal, green, healthy and fast. And it feels great to arrive at work refreshed, alive and ready to face the day. I would encourage anyone who can to give it a go - jump on your bike, I guarantee you won't look back.
Sunday, July 13, 2008
Investments
I've never thought too hard about my investments. My philosophy has always been to contribute regularly to an investment, choose a managed fund geared towards long term growth, and let time take care of the rest. But now I'm thinking that maybe it's time to think a bit harder about whether my current investments are right for me.
My investments at the moment are all in the category of retirement savings. They are funds that I hope will grow a nest-egg that will eventually support me with passive income.
1. National Bank Thoroughbred Super Scheme - Growth fund (flexible)
- Current holdings: $9658.12
- Asset allocation: Australasian shares 23%, International shares 52%, NZ fixed interest 12%, International fixed interest 8%, NZ property 5%
- Performance (pa): 1 year -5.90%, 2 years 5.96%, 3 years 9.36%
2. MAS Rsp Growth Portfolio
- Current holdings: $7287.38
- Asset allocation: Australasian equities 25%, International equities 40%, Property 5%, Domestic fixed interest 9%, International fixed interest 19%, Cash 2%
- Performance: 6 months -10.20%, 12 months -7.04%
3. MAS Kiwisaver Aggressive Portfolio
- Current holdings: $1,173.79
- Asset allocation: Australasian equities 25%, International equities 50%, Property 10%, Domestic fixed interest 5%, International fixed interest 19%
- Performance: 6 months -9.30%
4. MAS Kiwisaver Global Equities Portfolio
- Current holdings: $1,156.30
- Asset allocation: Australasian equities 30%, International equities 55%, Property 15%
- Performance: 6 months -10.40%
So as you can see, pretty aggressive funds, and awful performance over the last year or so. But I'm not rushing to re-allocate at the moment. Why not? Well I'm in this for the long run and I'm not going to need any of this money for at least 30 years. Some of it is actually locked in till I'm 55 or 65. So that's more than enough time for the market to recover. In the mean time I'm getting cheap units in each of these funds which will hopefully multiply many times over by the time I cash them in. Well, that's my current theory anyway. I guess only time will tell if I'm being smart or just throwing my money away...
My investments at the moment are all in the category of retirement savings. They are funds that I hope will grow a nest-egg that will eventually support me with passive income.
1. National Bank Thoroughbred Super Scheme - Growth fund (flexible)
- Current holdings: $9658.12
- Asset allocation: Australasian shares 23%, International shares 52%, NZ fixed interest 12%, International fixed interest 8%, NZ property 5%
- Performance (pa): 1 year -5.90%, 2 years 5.96%, 3 years 9.36%
2. MAS Rsp Growth Portfolio
- Current holdings: $7287.38
- Asset allocation: Australasian equities 25%, International equities 40%, Property 5%, Domestic fixed interest 9%, International fixed interest 19%, Cash 2%
- Performance: 6 months -10.20%, 12 months -7.04%
3. MAS Kiwisaver Aggressive Portfolio
- Current holdings: $1,173.79
- Asset allocation: Australasian equities 25%, International equities 50%, Property 10%, Domestic fixed interest 5%, International fixed interest 19%
- Performance: 6 months -9.30%
4. MAS Kiwisaver Global Equities Portfolio
- Current holdings: $1,156.30
- Asset allocation: Australasian equities 30%, International equities 55%, Property 15%
- Performance: 6 months -10.40%
So as you can see, pretty aggressive funds, and awful performance over the last year or so. But I'm not rushing to re-allocate at the moment. Why not? Well I'm in this for the long run and I'm not going to need any of this money for at least 30 years. Some of it is actually locked in till I'm 55 or 65. So that's more than enough time for the market to recover. In the mean time I'm getting cheap units in each of these funds which will hopefully multiply many times over by the time I cash them in. Well, that's my current theory anyway. I guess only time will tell if I'm being smart or just throwing my money away...
Goals
To me, personal finance is all about goals. Setting goals, working towards goals and then achieving them. Goals range from the ultra short-term: I'm not going to spend more than $50 in this store, to the ultra long-term: I want to leave x-amount of money to my family when I die.
I find goals helpful as they are a reference point you can always return to if you feel you are straying from the straight and narrow. For instance when you're tempted to buy that 50 inch LCD using credit, or that $1500 suit that would surely find you a hot girl; a quick recheck of your short and long-term goals, and whether that purchase would take you towards or away from their realisation, can stop you making a decision you could regret for years.
My main long-term financial goal is geared towards financial independence - I want to be able to work, or not work, or volunteer, or study, without the pressure of having to earn to pay the bills. I've always said that I want to be financially independent by the time I'm 45. That gives me 20 years. Long enough? Who knows.
Up until now my strategy has been to pick a proportion of my income, currently 20%, and put this into long-term investments which will hopefully accrue enough to reach my goal. This is all based on nothing but conjecture, and somehow I think I need to be more specific and scientific about how much I need to put away.
Over the next few weeks I'll try and analyse my saving, spending and investments and come up with some specific short and long-term goals to put me on track to being financially independent. And maybe at the same time I'll try and work out what independence will mean for me, and when I finally get there will I even be happy...
Any advice or comments would be much appreciated.
I find goals helpful as they are a reference point you can always return to if you feel you are straying from the straight and narrow. For instance when you're tempted to buy that 50 inch LCD using credit, or that $1500 suit that would surely find you a hot girl; a quick recheck of your short and long-term goals, and whether that purchase would take you towards or away from their realisation, can stop you making a decision you could regret for years.
My main long-term financial goal is geared towards financial independence - I want to be able to work, or not work, or volunteer, or study, without the pressure of having to earn to pay the bills. I've always said that I want to be financially independent by the time I'm 45. That gives me 20 years. Long enough? Who knows.
Up until now my strategy has been to pick a proportion of my income, currently 20%, and put this into long-term investments which will hopefully accrue enough to reach my goal. This is all based on nothing but conjecture, and somehow I think I need to be more specific and scientific about how much I need to put away.
Over the next few weeks I'll try and analyse my saving, spending and investments and come up with some specific short and long-term goals to put me on track to being financially independent. And maybe at the same time I'll try and work out what independence will mean for me, and when I finally get there will I even be happy...
Any advice or comments would be much appreciated.
New Zealand
So, most of you probably think of one of three things when New Zealand is mentioned: Lord of the Rings, Sheep, or Flight of the Conchords. Right? Well I thought I'd mention just a couple of other things that make NZ financially a good place to live and work.
1. Interest free student loans
You may have noticed that I have a fairly large student loan, $67 799 at last count. The reason I'm not too worried about this, and aren't making any effort to pay it off, is that it is 100% interest free, as long as I stay in the country. This very convenient financial policy was introduced by the current labour government, mainly to get the student vote. What it means is that anyone with a loan has no incentive to pay it off above and beyond the compulsory repayment (10% of your income above $18,148). In fact there is a strong incentive to pay it off as slowly as possible, as any spare money can be invested in order to gain passive income, and also the real value of the loan is decreasing every year due to the effect of inflation. So all in all, a pretty good deal for today's students and graduates.
2. High interest rates
This is a bit of a two edged sword, as anyone with a mortgage will tell you. However for people like me without any interest-bearing debt, high interest rates at the moment are a great way to keep your money working for you while the share market is a bit dismal. I can currently put any spare money into a online, on call account with zero fees and earn 8.35% on that money with zero risk.
So, just two of the reasons why NZ is a great place to be.
2. High interest rates
This is a bit of a two edged sword, as anyone with a mortgage will tell you. However for people like me without any interest-bearing debt, high interest rates at the moment are a great way to keep your money working for you while the share market is a bit dismal. I can currently put any spare money into a online, on call account with zero fees and earn 8.35% on that money with zero risk.
So, just two of the reasons why NZ is a great place to be.
Perks of the job
I thought I'd tell you a bit about my job and the few financial perks. I'm a Junior Doctor, graduated at the and of 2006 and have been working for around 18 months now. I've just started my specialty training which means 5-6 years of hard slog and study.
My current salary is $54 525 (NZ dollars) per annum, which is quite low compared to most other Junior Doctors here. The reason for that is that I'm in a specialty that doesn't require much after hours work, so my contracted hours per week are just over 40. We are paid on a nationwide pay scale that takes into account your experience and how many hours a week you earn. The guys that slog away for 60+ hours per week get paid a lot more than I do, but then I get to have more of a life, so it goes both ways.
There are a few other decent perks of the job. My employer will match up to 6% of my gross salary contributed into an apporved retirement scheme, so this in effect a 6% pay rise. We also get free meals at the hospital so I pay nothing for lunch, and often can grab something for dinner as well, so I pay very little for food and groceries. We also get 6 weeks of paid annual leave per year, plus additional paid study leave if we have exams coming up. All expenses are also covered for conferences and training courses within the country and overseas.
So all in all it's not a bad deal. I'm not that happy with my salary at the moment, but should be due for an 8.5% pay rise shortly if the Doctors' union can get it's act together and stop arguing with our employer...
My current salary is $54 525 (NZ dollars) per annum, which is quite low compared to most other Junior Doctors here. The reason for that is that I'm in a specialty that doesn't require much after hours work, so my contracted hours per week are just over 40. We are paid on a nationwide pay scale that takes into account your experience and how many hours a week you earn. The guys that slog away for 60+ hours per week get paid a lot more than I do, but then I get to have more of a life, so it goes both ways.
There are a few other decent perks of the job. My employer will match up to 6% of my gross salary contributed into an apporved retirement scheme, so this in effect a 6% pay rise. We also get free meals at the hospital so I pay nothing for lunch, and often can grab something for dinner as well, so I pay very little for food and groceries. We also get 6 weeks of paid annual leave per year, plus additional paid study leave if we have exams coming up. All expenses are also covered for conferences and training courses within the country and overseas.
So all in all it's not a bad deal. I'm not that happy with my salary at the moment, but should be due for an 8.5% pay rise shortly if the Doctors' union can get it's act together and stop arguing with our employer...
Financial Logistics
I try to be as structured as possible when it comes to organising my finances, and automate as much as I can. I track every dollar I earn, spend and save using Quicken, and have done so for the last 2 years, and this gives me a great amount of information about exactly where my hard earned dollars are going and where I can plug leaks or increase efficiency.
My salary is paid fortnightly into my current account which has zero interest, but also zero fees for all automated or electronic transactions. Before I even see my salary there are a few deductions apart from the obvious tax. I have 6% of my salary diverted into a retirement fund and this contribution is matched by my employer. A further 4% is diverted into my Kiwisaver fund - this is a recent Government initiative to promote retirement savings and has some tax benefits. Compulsory student loan repayments also come straight from my paycheck - this amounts to 10% of every dollar over $18,148 earned per annum.
On the same day as my salary is deposited into my account, I have automatic payments which divert a further 10% of my gross salary into a combination of retirement funds, and an investment cash account. I also divert $125 into my Bill savings account which is the account I use to cover all predictable expenses - car registration, insurance, health insurance etc. I keep these accounts with Raboplus - a bank offering online on-call savings accounts with no fees, no minimum balance and 8.35% pa interest. Rent is paid weekly by direct transfer to my landlord's bank account.
So once all the above deductions have been made (tax, student loan repayment, 20% gross into retirement savings, bill savings and rent) the rest of my money is for living expenses, entertainment and short-term savings goals. I try to use my credit card to pay for all other expenses including bills where this is possible. I have my current account set up to automatically pay the full outstanding balance of the card each month to ensure that I never pay interest. I use cash as little as possible, but usually have $20 or so in my wallet in case I need it.
I have a master savings account (also with Raboplus) which is where I transfer all excess money after payday - I try to keep as little as possible in my current account to maximise the funds earning interest in my online savings accounts. At the moment most of my master savings are earmarked to become my emergency fund - I'm aiming for $10 000 and should have this amount saved within the next couple of months.
So that's how my week-to-week finances are arranged. I'll talk a bit more about my investment choices, my job and my student loan shortly.
My salary is paid fortnightly into my current account which has zero interest, but also zero fees for all automated or electronic transactions. Before I even see my salary there are a few deductions apart from the obvious tax. I have 6% of my salary diverted into a retirement fund and this contribution is matched by my employer. A further 4% is diverted into my Kiwisaver fund - this is a recent Government initiative to promote retirement savings and has some tax benefits. Compulsory student loan repayments also come straight from my paycheck - this amounts to 10% of every dollar over $18,148 earned per annum.
On the same day as my salary is deposited into my account, I have automatic payments which divert a further 10% of my gross salary into a combination of retirement funds, and an investment cash account. I also divert $125 into my Bill savings account which is the account I use to cover all predictable expenses - car registration, insurance, health insurance etc. I keep these accounts with Raboplus - a bank offering online on-call savings accounts with no fees, no minimum balance and 8.35% pa interest. Rent is paid weekly by direct transfer to my landlord's bank account.
So once all the above deductions have been made (tax, student loan repayment, 20% gross into retirement savings, bill savings and rent) the rest of my money is for living expenses, entertainment and short-term savings goals. I try to use my credit card to pay for all other expenses including bills where this is possible. I have my current account set up to automatically pay the full outstanding balance of the card each month to ensure that I never pay interest. I use cash as little as possible, but usually have $20 or so in my wallet in case I need it.
I have a master savings account (also with Raboplus) which is where I transfer all excess money after payday - I try to keep as little as possible in my current account to maximise the funds earning interest in my online savings accounts. At the moment most of my master savings are earmarked to become my emergency fund - I'm aiming for $10 000 and should have this amount saved within the next couple of months.
So that's how my week-to-week finances are arranged. I'll talk a bit more about my investment choices, my job and my student loan shortly.
Financial Philosophies
I thought it would be useful to explain a bit about my financial background and what my philosophies about money are.
I grew up in a middle class family and my parents were quite careful with money, which I think has shaped the way that I think about money today. We had everything that we needed, but not everything we wanted - money was rarely wasted on extravagances. We rarely ate out, never had the latest clothes or technologies, but still lived a very comfortable lifestyle. My parents always put a decent proportion of their income into retirement savings and now they are approaching retirement age with a very nice nest egg and a prosperous retirement ahead.
When I left school I left home to go to university, and spent the next 6 years as a fairly poor student - my parents helped me out a bit financially, but the majority of my studies were financed by a student loan. Now that I'm earning a reasonable wage, I don't feel my lifestyle has changed a huge amount. Yes, I can afford a few more toys and luxuries, but on the whole I think living for so long without a significant amount of money has made me realise the value of financial security and the stupidity of mindlessly wasting money.
My basic philosophies about money will be very familiar to those who read or write PF blogs:
When I left school I left home to go to university, and spent the next 6 years as a fairly poor student - my parents helped me out a bit financially, but the majority of my studies were financed by a student loan. Now that I'm earning a reasonable wage, I don't feel my lifestyle has changed a huge amount. Yes, I can afford a few more toys and luxuries, but on the whole I think living for so long without a significant amount of money has made me realise the value of financial security and the stupidity of mindlessly wasting money.
My basic philosophies about money will be very familiar to those who read or write PF blogs:
- Spend less than you earn
- Divert a significant proportion of you income into income-generating investments
- Never take on debt for a non-appreciating asset
- Pay off credit cards in full each month
- Try to spend your money in a way that maximises your quality of life, not in ways that leads you to accumulating useless junk
- Don't try to keep up with the Joneses
- Be frugal, not cheap
- Always think of the big picture
Net Worth Report - July 2008
Assets
Cash $29.20
Current Account $1315.60
Master Savings $8148.89
Bill Savings $1264.73
Kiwisaver $2330.85
MAS RSP $7331.85
Thoroughbred Super $9658.12
Investment Cash $3349.95
Total Assets: $33 429.19
Liabilities
Credit Card $579.35
Student Loan $67 779.20
Total Liabilities: $68 358.55
NET WORTH: -$34 929.36
I'll explain in coming posts about my different accounts, how I organise my money, and why I'm paying off my student loan as slowly as I possibly can (there's a very good reason).
Cash $29.20
Current Account $1315.60
Master Savings $8148.89
Bill Savings $1264.73
Kiwisaver $2330.85
MAS RSP $7331.85
Thoroughbred Super $9658.12
Investment Cash $3349.95
Total Assets: $33 429.19
Liabilities
Credit Card $579.35
Student Loan $67 779.20
Total Liabilities: $68 358.55
NET WORTH: -$34 929.36
I'll explain in coming posts about my different accounts, how I organise my money, and why I'm paying off my student loan as slowly as I possibly can (there's a very good reason).
The beginning...
Hi, and welcome to Kiwi Cash. I thought I'd start by telling you a bit about me and why I decided to jump on the personal finance blogging bandwagon.
I'm a 25 year old single male living in a medium size city in New Zealand (~400 000 population) and have been in the workforce for 18 months after finishing my medical degree. I've been a long time lurker on personal finance blogs, and have learned a lot about how other people manage their money and spending. Most bloggers seem to be US-based, so I thought it might be interesting to give a perspective on personal finance in little old New Zealand.
My philosophy on this blog is not to give advice or try and influence opinion, rather to open up my wallet and publish the intricacies of my financial situation for all to see, while talking about some of the benefits and challenges of living and earning in a small country stuck onto the bottom of the Pacific Ocean.
Over the next days and weeks I'll introduce you to my bank balances and net worth, and talk about my financial philosophies and goals. Thanks for reading.
I'm a 25 year old single male living in a medium size city in New Zealand (~400 000 population) and have been in the workforce for 18 months after finishing my medical degree. I've been a long time lurker on personal finance blogs, and have learned a lot about how other people manage their money and spending. Most bloggers seem to be US-based, so I thought it might be interesting to give a perspective on personal finance in little old New Zealand.
My philosophy on this blog is not to give advice or try and influence opinion, rather to open up my wallet and publish the intricacies of my financial situation for all to see, while talking about some of the benefits and challenges of living and earning in a small country stuck onto the bottom of the Pacific Ocean.
Over the next days and weeks I'll introduce you to my bank balances and net worth, and talk about my financial philosophies and goals. Thanks for reading.
Subscribe to:
Posts (Atom)
