Sorry its been so long between posts, but now if I would like to write one, I have to wait until between midnight and 6am (thanks DaisyRoo & Mrs NutShell :-) ), as I can't get miss diaryofasham off the ipad. So I'm trying to write this on my phone and support my lovely wife and her IBOT, so let's see how that works.
Have you ever wondered how the rich get richer, and we just seem to get by every week, living pay to pay. Well part of it boils down to this: us everyday consumers find things we love and just have to have. Maybe someone famous has it, or it's just the thing to be seen with at the moment.
Take for example soft drink. Everyone likes soft drink, and there are only a few big companies out there producing the stuff. We pay a premium for a small bottle and millions of them are sold around the world daily; some people just have to have it every day.
Now if the profit from a bottle was only $1.00 and they could sell a million bottles a day world wide, that's a pretty good income! Now let's say the profit in one bottle was only 10 cents over a year. This would still equate to $35million profit. If you and I just thought about what we really need each day and changed our thinking it's not going to make a huge difference to their pocket but could do for us. Okay it's not going to make us millions, but it sure is better off in our bank account than theirs, they already have enough.
We consumers make the world go round, well that's what we get told! In fact it would take 4562 people on $80k pa to turn over as much income before tax as what they would make in profit. Now dont get me wrong I love to support SMALL business selling the stuff: I just dont like the idea that people have to make billions of dollars and rip you and I off in the process. Let's be wise with our money, seek professional advice and not just the opinion of family & friends; they often mean well but can also be bias with their information.
Monday, August 22, 2011
Thursday, July 7, 2011
Down Down Prices are Down
Down, Down Prices are Down?
Well there's a statement for you. It's amazing how well perception advertising works. I think back to when I was growing up and the price of food. A can of soft drink from a vending machine was 50cents to a $1.00 a packet of mixed lollies would make you feel sick if you ate the all. $2.00 of hot chips would feed the whole family.
Just recently my amazingly wonderful wife has gone to the shop for the annual birthday cake splurge, she just loves to be creative and make all 4 kids the most amazingly decorative cakes. One year she even made an actual ginger bead house for Christmas, it even had snow on it!!! Now to the point, Jess was picking up some Cake decorations from the local supermarket and one of the items were those little silver balls, caschous. Last year she paid $3.50 for them and this year they have gone up to an amazing $7.19. Our weekly shopping is often between $350-400 plus a $50 top up during the week and we are not a falimy that buys lots of crap, infact if you came to our house and looked in our pantry the only treats u would find are the lollies from reward training we just completed. See http://diaryofastay-at-home-mum.blogspot.com for the full story.
According to money matters in news.com.au 'Australia has the fastest rising food prices in any major developed nation' and food prices have risen 41.3 percent over the last decade, Spain follow us then the UK, Canada, italy & US.
Yet even though we have had such a dramatic rise companies are out there telling us that prices are down?
Perception is the key to getting people like you and me to spend our money thinking it's a good thing we are paying more. So what do we do? Well when it comes to food, sadly there isn't a lot we can do. Grow more of your own, get some chooks :-) catch fish. When I asked Jess to maybe just make simple cakes you would have thought I was telling her she couldn't buy shoes! However there will be no little silver balls on future cakes, it will be silver icing or something not so expensive. The only people making money out of charging us more are the companies, they need to raise their share prices for their share holders hence create more profit and raise prices you and i are to pay? I would often tell friends the only way to make money from a bank is to own shares in them as that's who these companies are interested in looking after. Ever know why the poor get poorer and the rich get richer? It's all about perception!
Well there's a statement for you. It's amazing how well perception advertising works. I think back to when I was growing up and the price of food. A can of soft drink from a vending machine was 50cents to a $1.00 a packet of mixed lollies would make you feel sick if you ate the all. $2.00 of hot chips would feed the whole family.
Just recently my amazingly wonderful wife has gone to the shop for the annual birthday cake splurge, she just loves to be creative and make all 4 kids the most amazingly decorative cakes. One year she even made an actual ginger bead house for Christmas, it even had snow on it!!! Now to the point, Jess was picking up some Cake decorations from the local supermarket and one of the items were those little silver balls, caschous. Last year she paid $3.50 for them and this year they have gone up to an amazing $7.19. Our weekly shopping is often between $350-400 plus a $50 top up during the week and we are not a falimy that buys lots of crap, infact if you came to our house and looked in our pantry the only treats u would find are the lollies from reward training we just completed. See http://diaryofastay-at-home-mum.blogspot.com for the full story.
According to money matters in news.com.au 'Australia has the fastest rising food prices in any major developed nation' and food prices have risen 41.3 percent over the last decade, Spain follow us then the UK, Canada, italy & US.
Yet even though we have had such a dramatic rise companies are out there telling us that prices are down?
Perception is the key to getting people like you and me to spend our money thinking it's a good thing we are paying more. So what do we do? Well when it comes to food, sadly there isn't a lot we can do. Grow more of your own, get some chooks :-) catch fish. When I asked Jess to maybe just make simple cakes you would have thought I was telling her she couldn't buy shoes! However there will be no little silver balls on future cakes, it will be silver icing or something not so expensive. The only people making money out of charging us more are the companies, they need to raise their share prices for their share holders hence create more profit and raise prices you and i are to pay? I would often tell friends the only way to make money from a bank is to own shares in them as that's who these companies are interested in looking after. Ever know why the poor get poorer and the rich get richer? It's all about perception!
Thursday, June 23, 2011
A Necessary Evil, part 2
Not every situation will be like this, but we had a 92 Maroon Money pit. It was costing me $2,000 to $4,000 a year to keep it on the road with repairs. We had had it for 5 years and when i bought it, it cost me $10,000, but I spent more than that again on fixing it. I then sold it just before it really fell apart and got $1,200 for it. There we go. Another huge loss. I paid something like $28,000 over the 5 years, ensured I maintained it well, but I was never going to stop spending money on it. It was just one of those cars
We also had a 92 Red Rocket, that cost me nothing more than an annual service and rego inspection; it never missed a beat. I was sad to see it go. We also had this car for about 6 years and we sold it for the same value it was worth the day we got it. But our family was growing and our lifestyle expanding so it was time for a change.
You have to be smart about buying a car; what can you get serviced and repaired in your local area, and how expensive are parts and services. For example, The new NT Mitsubishi Pajero's are half the price to service than their previous model the NS auto's. The oil used in the NS auto's will set you back a few hundred dollars alone! If you lived in remote Australia and purchased a new prestige car, some of the oil these things take only come in a 205L drum and equates to something like $50 a litre. There service agents are only usually in the big cities so not a good idea!!
This is where I move onto lifestyle. If our family didn't live in tropical Australia we may not need a car with air conditioning(not many cars don't have it, but some stop working and don't get repaired. We are an out doors family that loves camping and fishing. We love to do road trips where we hook up the 4x4 camper and 4 kids into the patrol and off we go for 4 weeks. Now if we did't live 3000km from anywhere, we also wouldn't need to take a 4 week holiday just to get somewhere. We could do short trips more often.
Now we live in the middle of town and only about 5 minutes from the kids school 15 minutes to the city for my work in rush hour traffic and 5 minutes to the biggest shopping centre in the NT. So we don't have to travel that far, and don't do heaps of km on a usual week. However come the weekend, I like to take the kids fishing and on long weekends we like to get away. As the man of the family, I want to make sure the car we are traveling in is going to be reliable as anywhere out from Darwin gets really remote and you often have to travel 2-300 hundred km to get anywhere. Having 4 kids I need room, so 7 seats is a minimum. When we go anywhere the kids need their DVD players, so I need extra outlets and to make sure the car has a double battery system to handle all the extra power being drawn and keep the Engel (fridge) cold. The car fridge needs to sit in the back on our 4 week missions around parts of Australia, so I need a car that has a removable 7th seat. The car needs to be able to tow at least 2.5 tone comfortably. So this really limits the kind of car we get to choose from and locks us into a price range also.
Now I'm not a fan of buying a new car as it ties up too much of your money each pay, and if your unable to claim a tax deduction on the car you end up like my mate at work, paying huge amounts for a depreciating asset when there are far greater things we could be spending our money on. Now I don't believe choosing the 3ltr patrol was my wisest choice. Only after purchasing the car did I find out that with this model the engines often blow up around the 80-120,000km range. Well we are up to 155,000km and no drama's, but I now don't feel like it's going to be a safe car for my family. If I had purchased the 4.2 litre I would have just kept it and payed out the $12k balloon payment, and been done with it for another 5 years. So now we will be faced with getting another car at the end of its loan just to start the process over again.
The worst thing you could do is sell your car in the first 3 years unless you have a lemon or your lifestyle changes. I'm going to make sure I alter my career so I can set up the next car to be a tax deduction. I will plan on having the next car for 10 years and if I have to pay out $42,000 over the first 5 years and possibly get $2000 a year over 5 years back, then the car has only cost me 32,000 or $3,200 per year providing we get a good run out of her. The trick is, once you have paid out the car over the 5 years you keep putting that money away for the next 5 and you should have saved yourself enough money to pay cash for your next car. So no more loans and no more paying interest, you can the change your cars every 5-7 years and your money is your money, not held hostage by the bank in repayments. It's all about getting financial freedom.
I hope I have explained this and not rambled on too much. If you have any questions let me know.
Next I might discuss things like the dangers in using equity in your home to purchase depreciating assets.
We also had a 92 Red Rocket, that cost me nothing more than an annual service and rego inspection; it never missed a beat. I was sad to see it go. We also had this car for about 6 years and we sold it for the same value it was worth the day we got it. But our family was growing and our lifestyle expanding so it was time for a change.
You have to be smart about buying a car; what can you get serviced and repaired in your local area, and how expensive are parts and services. For example, The new NT Mitsubishi Pajero's are half the price to service than their previous model the NS auto's. The oil used in the NS auto's will set you back a few hundred dollars alone! If you lived in remote Australia and purchased a new prestige car, some of the oil these things take only come in a 205L drum and equates to something like $50 a litre. There service agents are only usually in the big cities so not a good idea!!
This is where I move onto lifestyle. If our family didn't live in tropical Australia we may not need a car with air conditioning(not many cars don't have it, but some stop working and don't get repaired. We are an out doors family that loves camping and fishing. We love to do road trips where we hook up the 4x4 camper and 4 kids into the patrol and off we go for 4 weeks. Now if we did't live 3000km from anywhere, we also wouldn't need to take a 4 week holiday just to get somewhere. We could do short trips more often.
Now we live in the middle of town and only about 5 minutes from the kids school 15 minutes to the city for my work in rush hour traffic and 5 minutes to the biggest shopping centre in the NT. So we don't have to travel that far, and don't do heaps of km on a usual week. However come the weekend, I like to take the kids fishing and on long weekends we like to get away. As the man of the family, I want to make sure the car we are traveling in is going to be reliable as anywhere out from Darwin gets really remote and you often have to travel 2-300 hundred km to get anywhere. Having 4 kids I need room, so 7 seats is a minimum. When we go anywhere the kids need their DVD players, so I need extra outlets and to make sure the car has a double battery system to handle all the extra power being drawn and keep the Engel (fridge) cold. The car fridge needs to sit in the back on our 4 week missions around parts of Australia, so I need a car that has a removable 7th seat. The car needs to be able to tow at least 2.5 tone comfortably. So this really limits the kind of car we get to choose from and locks us into a price range also.
Now I'm not a fan of buying a new car as it ties up too much of your money each pay, and if your unable to claim a tax deduction on the car you end up like my mate at work, paying huge amounts for a depreciating asset when there are far greater things we could be spending our money on. Now I don't believe choosing the 3ltr patrol was my wisest choice. Only after purchasing the car did I find out that with this model the engines often blow up around the 80-120,000km range. Well we are up to 155,000km and no drama's, but I now don't feel like it's going to be a safe car for my family. If I had purchased the 4.2 litre I would have just kept it and payed out the $12k balloon payment, and been done with it for another 5 years. So now we will be faced with getting another car at the end of its loan just to start the process over again.
The worst thing you could do is sell your car in the first 3 years unless you have a lemon or your lifestyle changes. I'm going to make sure I alter my career so I can set up the next car to be a tax deduction. I will plan on having the next car for 10 years and if I have to pay out $42,000 over the first 5 years and possibly get $2000 a year over 5 years back, then the car has only cost me 32,000 or $3,200 per year providing we get a good run out of her. The trick is, once you have paid out the car over the 5 years you keep putting that money away for the next 5 and you should have saved yourself enough money to pay cash for your next car. So no more loans and no more paying interest, you can the change your cars every 5-7 years and your money is your money, not held hostage by the bank in repayments. It's all about getting financial freedom.
I hope I have explained this and not rambled on too much. If you have any questions let me know.
Next I might discuss things like the dangers in using equity in your home to purchase depreciating assets.
Thursday, June 16, 2011
A Necessary Evil
Well nearly everyone wants a new car but who looks at the after effect of buying one. Who looks at the after effect of buying anything? Not my wife that's for sure, the only thing she thinks about is 'oh crap what is Tim going to say'. No really she is gorgeous she just loves to buy presents :-)
I now work in the motor industry and would make the worst car salesman ever! I see people every day making awful financial decision without them even realizing it. Now I'm by no way having a go at anyone as when I was a young lad did exactly the same thing myself. However I have studied into the temptation of buying that new car and what the costs really are and was hoping to share with anyone willing to listen,
Here is my first example:
I have a 2001 Nissan patrol 3ltr turbo diesel. I bought it nearly 5 years ago for $30,000 a very good price through my uncle at the current car dealership im working in.
Now at the time of purchase I was using this vehicle as a work car for my financial planning duties with BT Financial Group traveling thousands of km every month around the top end of Australia. Now my repayments on the car are about $500 a month so over 12 months my repayments alone cost me $6,000 annually and over 5 years that's $30,000. Now when I took out a loan for the car I took what they call a Balloon payment at the end to keep my payments down and my intentions were to trade it in on another vehicle every 5 years. So my balloon payment is $12,000 at the end of the contract. Now the trade in value of this car is going to go close to that and I may need to pay an extra 1 or 2 thousand difference, however my point is after this time we still own nothing! Just paid out over $30,000 and really don't have anything physical to show for it.
A mate of mine at work bought a RallyArt Lancer last year against my advice and he will pay in excess of $62,000 for it after the 5 years, and will have a car lucky to be worth $15,000. I had explained this to him before he purchased it but he was stuck in the emotion of the new car experience and regrets it now. ''Man, I should have listened to you' were his exact words
Cars really are a money pit but keep reading and I'll explain the necessary evil of a car. I'll discuss my experience in second hand cars and discuss cars that fit your lifestyle. Let me know if you have any questions.
I now work in the motor industry and would make the worst car salesman ever! I see people every day making awful financial decision without them even realizing it. Now I'm by no way having a go at anyone as when I was a young lad did exactly the same thing myself. However I have studied into the temptation of buying that new car and what the costs really are and was hoping to share with anyone willing to listen,
Here is my first example:
I have a 2001 Nissan patrol 3ltr turbo diesel. I bought it nearly 5 years ago for $30,000 a very good price through my uncle at the current car dealership im working in.
Now at the time of purchase I was using this vehicle as a work car for my financial planning duties with BT Financial Group traveling thousands of km every month around the top end of Australia. Now my repayments on the car are about $500 a month so over 12 months my repayments alone cost me $6,000 annually and over 5 years that's $30,000. Now when I took out a loan for the car I took what they call a Balloon payment at the end to keep my payments down and my intentions were to trade it in on another vehicle every 5 years. So my balloon payment is $12,000 at the end of the contract. Now the trade in value of this car is going to go close to that and I may need to pay an extra 1 or 2 thousand difference, however my point is after this time we still own nothing! Just paid out over $30,000 and really don't have anything physical to show for it.
A mate of mine at work bought a RallyArt Lancer last year against my advice and he will pay in excess of $62,000 for it after the 5 years, and will have a car lucky to be worth $15,000. I had explained this to him before he purchased it but he was stuck in the emotion of the new car experience and regrets it now. ''Man, I should have listened to you' were his exact words
Cars really are a money pit but keep reading and I'll explain the necessary evil of a car. I'll discuss my experience in second hand cars and discuss cars that fit your lifestyle. Let me know if you have any questions.
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