Friday, 19 January 2018

Little Miss Piggy Bank






Hi folks

Well, I have been systematically taking opportunities to chat to my daughters about investing.  The eldest and the youngest are VERY keen learners and the middle three daughters are surreptitiously  hovering around and quietly listening in (I notice out of the corner of my eye).

I have been showing them practical examples (and using online calculators etc) to show them the astounding power of investing 20% of their net incomes as well as prudently managing their employer-funded retirement funds.

Seeing as three of our daughters are finishing their nursing and teaching degrees soon, I have been using an average wage for a nurse in NSW Australia to demonstrate the numbers to them.

I'll share it with you all now too.


Little Miss Piggy Bank

  • 20 years old
  • Registered shift nurse in Emergency Department
  • Gross annual wage = $63,500
  • After tax annual wage = $50,000
  • Live and save off 80%  = $40,000
  • Invest 20% = $10,000 ($833.33 monthly)
  • Employer Retirement Guarantee 9.5% of gross wage = $6032.50 ($502.71 monthly)
So .....


Little Miss Piggy Bank @ 20 years old
  • Retirement Employee Investment = Nothing. Zilch. Zip, hand-outs from Dad
  • Personal post tax investment = Nowt. Penniless, Zero, hand outs from Mother Dearest

Little Miss Piggy Bank @ 30 years old
  • Retirement Employer Investment = $87,042 producing $5,601 annual return (reinvested)
  • Personal post tax investment = $144,270 producing $9,283 annual return (reinvested)


Little Miss Piggy Bank @ 40 years old
  • Retirement Employer Investment = $260,238 producing $17,168 annual return (reinvested)
  • Personal post tax investment = $431,339 producing $28,370 annual return (reinvested)


Little Miss Piggy Bank @ 50 years old

  • Retirement Employer Investment = $604, 862 producing $40,030 annual return (reinvested)
  • Personal post tax investment = $1,002,545 producing $66,350 annual return (reinvested)

Little Miss Piggy Bank @ 60 years old
  • Retirement Employer Investment = $1,290,590 producing $85,624 annual return 
  • Personal post tax investment = $2,139,125 producing $141,920 annual return 

In reality,  just shy of her 40th birthday, Little Miss Piggy Bank's investments will be earning her enough to fully cover her $40,000 yearly living and saving expenses. At this point, she will be therefore be FINANCIALLY INDEPENDENT.  Astounding ..... but true.

Show your children, nieces, nephews and their friends.  Wealth on a normal wage is utterly achievable. 

Be encouraged, stay nice and take care.

Mr HM (Phil)

Friday, 12 January 2018

Tortoise & Hare Finances





Hi folks

So, I am pretty sure we all know the fable about the tortoise and the hare and how that slow and steady tortoise won that fabled race ..... yep.

You know, some days it feels like our incomes are like the tortoise and our expenses are like the hare.  On other days, it is our savings and investments that feel like the tortoise and our incomes are the hare.  For some of us, our partners are the hare and we are the tortoise (or vice versa) when it comes to household money. Some of  us have a hare income and a matching hare spending habits, others of us however have a tortoise income and tortoise spending. At any rate, there is lots of tortoise and hare habits going on when it comes to personal finances.

To be truthful, the hare was just an idiot. He could have easily won that race. He could also have saved the whole community of forest folk from death the very next week when the forest council elected the tortoise to go and warn all the forest folks of the approaching forest fire - all because the tortoise was the winner (!). Needless to say that forest burned as did many of the forest folk because the tortoise was the wrong choice.

Lessons for Hares:

  • Stay focussed.
  • Don't get distracted.
  • Leverage your natural abilities.
  • Reach the finish line quickly, then rest.
  • Slow reliable plodders have lots of fans.

Lessons for Tortoises:
  •   You got lucky competing against an unfocused hare.
  •   Stick to water - tortoises move much faster in water.
  •   Hares can't hold their breath under water nor can they swim efficiently.
  •   You should have declined the job of warning the others of the forest fire - ego.
OK, enough musings....




Tortoise & Hare Finances
  1. I've been a tortoise earner and I've also been a hare earner - having a hare income wins hands down.
  2. I've been a hare spender  - fun at the time but devastating at the finish line.
  3. I've been a tortoise spender - very powerful, very boring but definitely a winner.
  4. Save and invest like a hare.
  5. Increase your income like a hare.
  6. Minimise your spending rate like a tortoise.
  7. Invest like both the hare and the tortoise  - 50% yield & 50% growth
The moral of the story is, that the tortoise and the hare should be friends, partners even. The tortoise could keep the hare focused and the hare could carry the tortoise when necessary. Competition is rarely useful.

Take care and stay nice folks.

Mr HM

Sunday, 7 January 2018

How To Have No Bill Stress in December 2018





Hi folks


Just think about how nice it would be to have zero bills leading up to and over Christmas - amazing.

No pre-Christmas money stress, no post Christmas bill stress - bliss.

(How's your credit card balance going right about now?!)


How To Have No Bill Stress in December 2018 

To have no bill stress in December we will have to start immediately  - today actually.


Sweet baked potatoes.
Lower glycemic index than normal potatoes too.



Step 1:
Working out how much each of your bills cost you each 12 months.

To do this you will have to look back over your last 12 months worth of bills or bank statements and add up each bill payment so you have a yearly figure.  For example, electricity may have cost you $500 in March, $600 in June, $700 in September and $800 in December which equals $2600 over 12 months. Another example  - Car insurance which might be a direct debit of $100 per month, so the 12 monthly figure would be $1200.....and so on and so forth for all your bills in turn.

Step 2:
Working out your total yearly bill cost.

Simply add up all the 12 monthly figures that you have calculated in Step 1.

Step 3:
Divide the total yearly bill figure from step 2 by 48, then, multiply this figure by 1.1.  Write down this number - it will be your magic number.

For example:  yearly bills equal $30500.00. So, 30500.00 divided by 48 equals 677.08333 then multiply this by 1.1 equals 744.72 (rounded up to two decimal places).  744.72 is therefore my magic number.

Step 4: 
Set up a dedicated bank account for these bills.

This bank account must ONLY be used for all bills figured out in Step 1.  No cheating or dipping into it for other things or this whole system will fail.

Step 5:
Deposit your magic number (worked out in Step 3) every week into your dedicated bill account.

Step 6:
Pay your bills as they arise out of the bank account set up in step 4.

Step 7: 
Come December, you will have a full month's worth of bill money sitting waiting in your account. Any bills that come in during December can be blissfully paid from this money.

Fried chicken. Some Southern fried and
some fried with a dukkah coating.

ACTION ITEM:

URGENT

As today is the last day of the first week in January we need to put our magic number into our bills bank account TODAY  ..... at latest, first thing Monday morning.

Glasses up (ching!) to having zero bill stress come December 2018.  We'll all be sitting back relaxed whilst the world around is heating up their credit cards.


Take care folks and stay nice.

Mr HM

Friday, 5 January 2018

An Unpopular Topic





Hi folks

I have been given a fair bit of flack on forums and other frugality/simple living sites about my views on what-I-call inevitable future world events.

As a keen history buff I see history repeating itself over and over, albeit in different eras and contexts, but still repeating nonetheless. I also see highly civilised societies copping the brunt of these unsavoury repetitions in human behaviour.

Being ready for what I firmly believe to be some 'tough' times around the corner is part of our plan and awareness here at our place. Not only are we financially sorting our future, we are also beginning to prepare for some form of international conflict and all the stern realities that this brings.

OK, so I can see eyes rolling and readers clicking away from this post right about now, however, being reasonable and realistic means being prudent about inevitable maverick-style human behaviour at a global scale.  No, I am not a classic prepper with a fortress, dug-out and artillery, but we are quietly starting to prepare for history to repeat itself.  I refuse to be caught on the hop.


Who can deny the deliciousness of a baked potato?

Instead of putting our head in the sand and squealing about "negativity" and "scaremongering", there are much better ways to channel our emotional responses to the subject. Let me be quite clear about that subject - I am talking about another world conflict in whatever form it takes.

Would it be so hard to quietly, discretely and prudently do the following list?

  •   Stockpile some fresh water
  •   Stockpile some canned food
  •   Stockpile some dry goods
  •   Organise some alternate forms of heating and lighting
  •   Organise some alternate form of cooking
  •   Buy a bicycle
  •   Start growing some basic fresh salads, herbs and vegetables
  •   Expand a first aid kit
  •   Have some actual cash put aside
  •   Get to know neighbours and community a little better (we'll need each other)

I'm not talking about going nuts - just simply being prudent and more prepared.  Is that so offensive?

I trow not.


Take care and stay nice folks.

Mr HM (Phil)

Thursday, 4 January 2018

Little Frugal Tips





Hi folks

Here is a list of little frugal tips that will certainly save you money.  No one will even notice you doing these frugal things. Stealth is the key.

They don't sound much in themselves, but it all adds up.


  •   Place bottles of water in the spare spaces in your fridge. Water holds the cold so your fridge will not have to turn on as often or for as long each time you open the door.
  •   Use bathroom and kitchen exhaust fans to draw up hot air out of the house on a warm day
  •   Dilute laundry liquid with water - it works just as well. 
  •   If you are baking, then bake lots at once instead of on separate baking days. Once an oven is hot it is at its most efficient.
  •   Only place enough water in the kettle to boil as you need.  Boiling a full jug each time you want a cuppa wastes electricity/gas.
  •   Use half the amount of sugar in recipes - seriously.
  •   Place a couple of drops of essential oil on a tissue  and suck it up as you vacuum (hoover) to make the house smell lovely.
  •   Dilute hair conditioner with water - again, not even noticeable.
  •   Have a 3 lights-on-only policy in the house. People can read and study just as effectively under one light as they can under a light on in each room.
  •   Go to bed earlier - this saves all the electricity from lights and appliances and it is great for your health.
  •   Stop eating sugar.  Your medical bills will reduce and you will feel so much better in the long run. (The first three days off sugar are diabolical however!)
  •   Use the shortest cold wash cycle on your washing machine - it works just as well for ordinary day wear and saves water and power.
  •  Sun-dry your clothes. Your electric clothes dryer is a massive power sucker.
  •   Look at what you toss out after a meal - adjust meal sizes accordingly so there is zero waste.
  •   Stop drinking fruit juice - it is no better than drinking coke.
  •   Eat eggs. One of the purest forms of protein and a fraction of the price of meat.
  •   Make your own kitchen surface spray (use the empty spray bottle and fill with warm water and then add one teaspoon of washing soda and one tablespoon of dishwashing liquid). This works as good if not better and for just mere pennies.

Home made food is many times cheaper than processed foods
or eating out.  Cooking from scratch saves you serious money.


I have loads more tips but this should do for now.

Guaranteed money back in your pocket if you do this list ..... and no one will even notice the difference. (smug smile)


Take care folks and stay nice.

Mr HM (Phil)

Sunday, 31 December 2017

Don't Set Goals in 2018





Hi Folks

Look, goals are wonderful things, however they only represent 1% of the answer on their own.  I'm sure we have all set countless goals during our lifetimes and most (if not all) have just dropped off over the horizon like a proverbial lemming.

So this year, don't set goals.  All that nonsense about feeling your goals, reading your goals three times a day, imagining your goals, sending out goal vibrations .... blah, blah, blah ..... is useless without the following power-packed truth about goals:

Goals are only achieved by setting and following a system of actions.

Huh? How does that work?  Here are some examples of how this works.

Don't say:  I want to lose 20 kg
Instead do this: My daily action is eating only fresh above-ground veg and unprocessed meats.

Don't say:  I want to write a book by December 31st
Instead do this:  My daily action is getting up at 5:00am and writing 2 pages.

Don't say:  I will save $1000 by next Christmas
Instead do this:  Automate $40 to go to a HIBA each fortnightly pay.

Don't say:  I want to get a raise by November.
Instead do this:  My daily action  is to log into Seek site and apply for one job every week day.


It is the repetitious system of new actions that achieves goals and changes our lives. 

More simply - focus your energy on achieving the daily action, not the end goal.


Happy New Year's Eve to you all - the best of life's blessings to everyone.


Mr HM (Phil)

Friday, 29 December 2017

ING Bank - Changes In March 2018





Hi folks

ING Bank (Australia) has long been lauded as the pinnacle of online banking with zero fees and excellent interest rates etc etc.  ING Bank has been openly suggested by Australia's Barefoot Investor and other financial writers to encourage people everywhere to critically review their bank and their bank fees - what great advice too! Indeed I too have openly encouraged friends to dump fee-riddled banking accounts and defect to ING.

However, I was prowling around the ING site last night looking for some info on their interest rates and came across this change in ING's banking due in March 2018.  See if you can see the change.....

Savings Maximiser


Highest variable rate
For customers who also have an Orange Everyday bank account and deposit their pay of $1,000 or more (and from March 2018, also make 5+ card purchases) each month. Available on one account for balances up to $100,000 with the additional variable rate applied the following month.
Here is the link HERE to check this impending change out yourself.

So, as I understand it, for ING customers like me who NEVER use their ING cards to make purchases (I have 100% automation happening with ING), this means I will no longer get the 2.8% interest rate on my Savings Maximiser account. It will drop (presumably) to the base rate of 1.35%.  A subtle but potentially massive change depending on how you have organised your banking with ING.
If you are not using your ING card/s for purchases (at least 5 times a month) and are relying on the high interest rate in your Savings Maximiser account - beware of these changes dropping in come March 2018. You could be VERY out of pocket with your expected interest earnings.
In fairness, banks can (and do) change their terms and conditions regularly and are totally entitled to do so. They need to stay viable and profitable. Zero criticism from me on that front. However, I am  agnostic in my banking choices. If banking changes negatively impact me, I change banks for a better product.

Toshi  - not impressed with banking changes either.


Time to reorganise my banking me thinks.  

Incidentally, I have been sniffing around NAB (National Australia Bank) website lately and notice that the fees on their everyday accounts have gone and they are offering 2.5% for their online savings account (as long as you deposit each month and do not withdraw - which totally suits me) with no such card spending stipulations as are imminent with ING. Here is the link to NAB online savings account HERE and NAB basic transaction account HERE for your independent research. NAB fees are found HERE too.

Just thought I would drop this post quickly in the interests of keeping our frugal community updated as often banking changes can be easily missed.  Moral to the story is - keep an eye on your bank. Banks are businesses not benevolent societies. Treat your banking with a business-like head - AKA rational and mathematical. Reserve your sentiments and loyalty for your family, friend and pets - not banks.

The slow cooker working its
frugal magic.


Hopefully this info has potentially helped someone.......

Take care and stay nice folks.

Mr HM (Phil)

NB: This information was available and the links working at time of publishing this post. Do your own research and validation of the information in this post as I am NOT a financial adviser.

Thursday, 28 December 2017

A Quick EOY Picture Post



The table set for Christmas brunch


Hi dear folk.

Here is a quick picture post of how we fared on Xmas day.

We decided to do a simple brunch this year......


Eggs, fried mushrooms, baked Tom thumb tomatoes and bacon (!)

....and fresh fruit. We also had Greek yoghurt and honey for
the fruit - yum!

Croissants and muffins. Some of the croissants just might
have been chocolate ones.

Puff pastry and chocolate ganache baked Xmas tree

After that, we cleared the table and had lots of fun constructing and decorating our gingerbread houses (prepared previously from scratch). A glass or three of my deadly Xmas punch added to everyone's dexterity!


The brunch table transformed into a hive of activity....

....constructing and decorating our gingerbread houses.
All of us channeling our inner child.

Some went minimalist.

Some went gaudy 

Some succeeded ..... very nicely indeed.

And then there was coffee and finger sweets.....


Home made from scratch peanut butter balls, strawberry
LCM's, rocky road and lemon slice.

Later on in the evening, once we had digested a little, we brought out the home made cheesecake - but I forgot to take a picture sorry.

We're winding up things here at Mr Home Maker and getting ready for 2018.

All the best of life's blessings to all of you - take care and stay nice!


Mr HM

Saturday, 23 December 2017

Part 4 - Easy DIY Investment Portfolio





Hi folks

So this post it totally unnecessary to building a simple investment portfolio  - it is an interesting extra only. If you are looking for the necessary bits, go back to Part 1 and Part 2 and read those.

Now, it is important that you know that I am not a financial adviser so always please do your own research. I love to write about money, frugality, budgeting and living a simpler life to encourage others to do the same in their own way. I hate the stupid taboo of not talking about money and hope to encourage a helpful shifting of that useless paradigm.


Step 6 - Add A Personal Theme

I know of some very sensible people with very wise portfolios who also reserve a portion of their investments to speculate with - some fun if you will. Perhaps a little day trading, some penny stock trading or some Bitcoin etc.  Not me! My 'fun' comes in the form of 10% of my portfolio dedicated to an investment theme that interests me greatly but which still honours the principles of low fees, good return over the long term and that I can buy and hold.

Here are some worthy themes and the stocks we might buy to support those themes:

  • Property - Try this ETF  - VAP  (Far easier than chasing rent and fixing white ants)
  • High Dividend Yield - try this ETF - VHY  (Vanguard chooses the highest dividend payers)
  • Emerging Markets - try this ETF - VGE  (Invests in countries and regions that are growing)

Of course, that is just three of many themes we could invest in - it is a personal choice at the end of the day. You'll also see that I chose Vanguard ETF's to demonstrate that themes can be supported by wise and prudent products - there is no need to use risky or questionable products for our theme.

I think having a 10% portion of our portfolio dedicated to a theme that really piques our interest is important.  It keeps things fresh and engaging. The only proviso is that whatever this theme is, we must still aim for low fees, long term buy-and-hold and prudence. We need it to be a investment, not a flutter on something we do not understand.

I personally love dividends (as is obvious by the first post in this series showing the wisdom of LIC's) - so it stands to reason the theme I have chosen for myself is that of high dividend yields.  To that end I use Vanguard's High Yield ETF  - VHY as my theme. 10% is allocated to VHY in my portfolio. The wonderful thing about VHY is that it pays those delicious dividends every quarter instead of annually or bi-annually.

Below is what our finished portfolio looks like now. I have inserted VHY for the sake of the illustration but of course you would replace that with your own choice of theme.


Finished Easy DIY Investment Portfolio
  • Cash 10%
  • LIC's 40%
  • International ETF 20%
  • International Hedged  ETF 20%
  • Theme - High Dividend Yield ETF 10%




Now, if this all looks like too much hard work and you would rather just buy one product that does a similar thing then check out Vanguard's Diversified High Growth ETF recently released. It's symbol is VDHG. I also posted bout this product recently HERE.

Anyway, I have had fun sharing how to build an easy DIY investment portfolio with you all. These posts have attracted very little reader interest which indicates to me that that there seems to be a disconnect on how frugality and wise money management easily translates into self management of investments within the simple living community. That astounds me, as the wonderful simple living community have already done the hard work when it comes to money - investing truly is the easy part.

Either that or, the taboo of not talking about money still persists.


Anyhow, take care and stay nice folks - (two sleeps till Xmas!)

Mr HM (Phil)





Thursday, 21 December 2017

Part 3 - Easy DIY Investment Portfolio






Hi dear folk.

Ready for Christmas?  Or do we not mention the war? Tee hee.

So, in our previous two posts we have built together a simple, achievable DIY investment portfolio - if we didn't catch those two posts Part 1 is here and Part 2 is here.  In fact, these are really all that is necessary to create for ourselves a great investment portfolio. If after reading those two posts we are happy - then no need to read this post. (It truly is that simple)

This post and the next are just extras, not necessary, but an interesting couple of additions to that portfolio which might peak our interest.

So, carrying right on again from where we left off the shall we?......


Step 5 - Creating Some Safety

Last time we added VGS to our portfolio giving us a growth component to our basic portfolio. VGS is Vanguard's Global Securities ETF.

Now, as wonderful as global securities are for growth over the very long term, there is the challenge of currency fluctuation.  For instance, if we hold stocks in USA bought with $A and the Australian dollar suddenly rises in value against the US $, then our USA stocks are instantly worth less. Likewise, if the Aussie dollar slumps then our US stocks are instantly worth more. 

What to do? Well nothing really, that is all part of the investing reality and we would ride it out knowing that in the long run the stock market always rises despite the roller coaster rides. If we are really miffed by this currency fluctuation thingy, then we can hedge. Hedge? As in build a protective hedge? Yes - a currency hedge. Hedging will assist with smoothing out some of the extreme fluctuations in the movement of currency. Obviously, the downside of hedging is that is stops some delicious highs as well as saving some bum-burning lows - so it is not a silver bullet.

How to hedge our VGS then? We would simply buy VGAD which is Vanguard's hedged version of VGS. It is hedged in Australian dollars. We would have 50% of our international exposure unhedged via VGS ad the other 50% of our international stocks hedged via VGAD.  We would keep buying VGAD and our LIC's until our portfolio looked like this.


  • Cash 10%
  • LIC's 40%
  • International ETF 25%
  • International Hedged ETF 25%





Keeping Our Portfolio Balanced

A important note about keeping our portfolio balanced to the percentages mentioned above.....don't EVER sell any stocks to achieve this balance.  By selling we will incur possible CGT (capital gains tax), miss out on dividends, accidentally sell at the wrong price and a long list of other possible mistakes.

The most prudent type of investing is to buy and hold - not buy and sell.

Instead, the best way to re-balance our portfolio is to BUY the stock that is sitting the most beneath our required percentage.


Again, we could stop there and this would be a wonderfully easy DIY Investment Portfolio just the way it is with equal amounts of income yield and international growth elements, half of which are hedged against currency fluctuations, to perform well over the long term.

However, in the next post I want to just show yet another easy addition to this portfolio that will add some personality and flair....a theme if you will. (We all like a bit of individualism yeah?) 


To be continued .......


Take care folks and stay nice. (4 sleeps till Xmas)

Mr HM (Phil)


NB: I am not a financial adviser so always please do your own research. I love to write about money, frugality, budgeting and living a simpler life to encourage others to do the same in their own way. I hate the stupid taboo of not talking about money and hope to encourage a helpful shifting of that useless paradigm.
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