December stacked up to be another costly month, to be expected I guess given it’s the silly season and all. It’s pretty difficult to avoid spending money this time of the year, be it on presents, family feasts or winding down with a few frothies. My social calendar felt full this month with work Christmas parties, a friend’s engagement and buck’s party, other friends in from interstate and overseas, plus plenty of family time. But I wouldn’t have it any other way. The hip pocket and liver took a bit of a beating, but quality time with friends and family is what I value most.


Net Worth

Well didn’t 2019 go off like a firecracker – ASX200 and S&P500 up 18% and 29% respectively, before dividends, fees and taxes. It was quite the bull run despite all of the global economic and political activity. For anyone that retreated to cash, they left a motser on the table!

This news article does a much better job than I would detailing the financial events of 2019. Here’s a short summary on what plagued market volatility yet delivered stellar returns.

    • Global growth slowing, central banks cutting cash rates
    • US/China trade war ongoing, with a Phase 1 agreement
    • Brexit negotiations ongoing, now supported by the UK general election result
    • Australian federal election result, blocking Labor’s proposed changes to dividend imputation and negative gearing
    • Financial Services Royal Commission final report issued, customer compensation up, bank profits down
    • Australian unemployment and under-employment ticking up, keeping downward pressure on wages growth

Now to my net worth…nice to finish the year on a positive note, although modest gains except for my super.

Asset Contribution Monthly Return*
PPOR Loan Offset Balance + 0.26% (un-grossed)
Superannuation $1,938 + 2.02%
Investment bond $2,500 + 0.20%
Individual shares Nil + 0.43%

*Net of contributions

Burn rate

Tis the time for giving…

I actually find Christmas a stressful time, historically, I’m pretty average at selecting gifts for others, so I tend to overspend on gifts that in my mind don’t even hit the mark. So, this year I tried to think outside of the box — well for me at least.

For my existing and future nieces and nephews, I wanted to do something special rather than the standard material good that they may only appreciate for a year or two. Which really got me thinking…what’s the best gift I’ve ever received? Memorable experiences – and my most treasured memories are from travelling. How would I be able to contribute to my nieces and nephews’ future memories? What about setting up an adventure fund to use for travelling when they turn 21. I know this may seem like a lifetime to wait, but I have no doubt it will result in memories remembered for a lifetime.

I decided to structure the adventure fund within a low maintenance investment bond. The structure of the investment bond is that my niece or nephew (the beneficiary) can access the funds at the specified age (I used 21), tax is managed within the bond at the corporate rate (30%) and there are multiple investment options available (I selected 50/50% Australian / International shares). Kicking off each bond with a $1000 initial contribution, then topping up each birthday and Christmas with another $100. By the time 21 rolls around, the honeypot should be quite healthy. But I’ve missed the most important part of the gift that they will receive — the financial life lessons they will learn, of the time-value of money and the power of compounding.

This month I opened a new investment bond for my newly born niece and topped up for my nephew. Though it was a drag on my burn rate now, the returns for them will be priceless.

How about the rest of the family? Thinking smarter, not harder, I convinced my immediate family and my sibling’s partners to do Secret Santa this year, capping at $100. This meant buying one present, not eight. What made the whole process so easy was the free Secret Santa generators online. Not to mention everyone has to lists their top 3 gift requests – simple, right?!

Not only did we all save money, but we all got what we wanted!

Since I use August 2018 to normalise my burn rate to prevent lifestyle inflation, I do feel guilty when I overspend against my target. I’ll admit I blew out this month eating out and having drinks with friends that I rarely see – but this is what matters to me. I have to remind myself – financial independence is about the journey, and not the destination.  If I get value and happiness, then it’s money well spent.

To ease some of my guilt, I worked overtime in December, so my actual burn rate was closer to my target.

I’m going to try and introduce something new in these updates – a monthly hack and stack. The hack is where I’ve identified a new trick to cut a cost, save a dollar or even make a dollar. Whereas the stack is a blunder, an unnecessary cost that I could’ve avoided. The intent is to share the wins and (hopefully less) losses, that may give you ideas.

Monthly hack: Family Secret Santa (capped), rather than a gift per person.

Monthly stack: $40 monthly Linked-In subscription (forgot to cancel the subscription following a free month of premium).


Gamify Expenses

Dealz, dealz, dealz!

Over time I’ve learnt to apply self-control to impulse buying, that said I haven’t perfected it. Some people use the 72-hour rule, whereby you should sleep on it, before buying, for at least 72 hours. This gives you enough time to process if you really need it or it was a momentary craving. For more expensive purchases, I tend to keep a running wish list, research for cheaper alternatives or wait for sales. I actually surprise myself how patient I can be for a deal.

With Christmas around the corner, Black Friday and Cyber Monday sales were bargain hunting season! I managed to pick a V8 Dyson vacuum for a steal, then take another 5% off. This is a prime example where I researched and compared the different models and determined the superseded V8 model (i.e. cheaper alternative) easily met my needs. In other words, each additional dollar required for a V11 model would’ve added negligible marginal valve, for me anyways.

Item Merchant Discount
Groceries Woolworths 5% off e-gift cards
Vacuum Harvey Norman 5% off e-gift cards
Clothing 10% cashback
Rideshare Ola 20% off
Fuel Puma Petrol Stations 4¢/L off (RACQ member)
Fuel All Petrol Stations MotorMouth app


Here’s to what Twenty20 will bring!  – Joey.

Posted by:joey

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