October 2026 Report

October was the second consecutive down month. International stock markets and gold fell while the Australian stock market rose. The Australian Dollar rose from USD 0.6983 to USD 0.7029. So, our Australian Dollar returns are a bit lower than our USD returns. 

Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): -1.62%

S&P 500: -0.87%

HFRI Hedge Fund Index: -0.43% (forecast)

Australian Dollar Benchmarks

ASX 200: 1.39%

Target Portfolio: -2.31% (forecast)

Australian 60/40 benchmark: 0.36%

In Australian Dollar terms we lost 2.47% and in US Dollar terms 1.88%. As a result, we under-performed all benchmarks though we were not that far behind the target portfolio or the MSCI index. Here is a report on the performance of investments by asset class:

The asset class returns are in currency neutral and gross asset terms and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. All asset classes apart from large cap Australian stocks lost money. Australian small cap stocks had the worst result in percentage terms, but gold was the greatest detractor.

Things that worked well this month:

• Two investments made more than AUD 10k this month: Pershing Square Holdings (PSH.L, 12k) and Pengana Private Equity (PE1.AX, 11k).

What really didn't work:

• Ten investments lost more than AUD 10k! The following lost more than AUD 25k: Gold (38k), Tribeca Global Resources (TGF.AX, 28k), Regal Investment Fund (RF1.AX, 26k).

Our distance from our target allocation reduced slightly. Our actual allocation currently looks like this:

Around 70% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity and credit, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.

This month, Moominmama received her redundancy pay. I am receiving monthly pension payments from both Unisuper and our SMSF, totalling AUD 6,770 per month. I made the following investments and trades:

• I invested a total of USD 2,000 in one startup on Angellist.  
• I bought 85,000 L1 Global Long-Short (GLS.AX) shares through their entitlement offer. I plan to sell some of these.
• I completed selling our Hearts and Minds (HM1.AX) position.
• I sold 1,000 WCM Global (WCMQ.AX) shares and bought 500 bitcoin ETF (IBTC.AX) and 100 ether ETF (QETH.AX) shares. I also did a couple of very small bitcoin trades.
• I continued trading options on Treasury Wine Estates (TWE.AX).
• I sold 20k Cadence Opportunities (CDM.AX) shares and bought 20k Maas Group (MGH.AX) shares. 

Here are the income and spending accounts * for this month ($ is Australian Dollar):

This month, other income is Moominmama's redundancy pay and net employer superannuation contributions minus the tax paid by the SMSF. Spending was very high–$28k–due to quarterly school fees and travel pre-payments. This number does not include our mortgage payments, which are regarded here as saving (principal) and investment costs (interest). They are just over $1,400 per fortnight. We lost $178k investing. The transfer out of retirement is my pensions. Tax (franking) credits on non-superannuation accounts were $6.6k. As investment return includes these, they need to be deducted to get to the change in net worth. As we report superannuation investment returns on an estimated pre-tax basis, the implicit tax on our industry/public sector fund accumulation accounts (-$78) also needs to be deducted to get to the change in net worth.

Because of the redundancy pay, we saved $70k!

As a result of all this, net worth fell by AUD 115k to AUD 8.451 million.

* Results are shown separately for retirement and non-retirement accounts as well as housing, which nowadays doesn't have much activity. The grey shaded rows are additional notes. Total investment income is split into investment income before exchange rate moves and the contribution of exchange rates. Current other income is non-investment income including salaries and net income tax returns, while on the retirement side it includes employer superannuation contributions minus superannuation contribution tax and all SMSF tax payments to the ATO. Investment income is shown pre-tax. Tax credits include franking credits on Australian dividends etc. in non-retirement accounts and the SMSF and imputed tax on industry superannuation returns. These are taken away from investment income to get changes in actual net worth. Inheritances include gifts from relatives. Saving is from non-investment income, transfers, and inheritances not investment income.

Update on Microsoft Copilot

I posted about my first impressions of Microsoft Copilot in Excel about three weeks ago. I exhausted the credits available for the standard home package in a week! So, I paid AUD 329 for the "Premium" tier. I am using it for two main things. As discussed in that post, I am debugging monthly accounts. The second use is building monthly spreadsheets from transaction level data. This is a huge time-saver.

A few years ago, I set up a spreadsheet that consolidated all the individual transactions from our bank and brokerage accounts into monthly closing values and various monthly aggregates: Investment income, non-investment income (salaries, taxes etc.), spending, and transfers. But the coverage of past months was sporadic, with only the last couple of years or so complete. It seemed like a project that might never get finished. The value of the workbook (dubbed Ledger) is that it makes compiling bug-free monthly accounts much easier and quicker. You can just copy last month's accounts and move all cell locations one cell forward. 

Copilot means that this project now might be completed–for all 30 years of data–relatively quickly. You can just ask it to fill the monthly cells in Ledger with various calculations on the individual transactions for that month from the relevant Excel workbook. By hand, you would need to adjust the range of cells to capture the relevant transactions individually for each month (or know very esoteric conditional formulae). So far, I have worked on the easier cases and will complete those first. Not all transactions spreadsheets are as nicely formatted as I would like. Copilot makes mistakes, but I can debug these using a worksheet that computes:

Residual(t) = Value(t)-Value(t-1)-Spending(t)-Transfers(t)-Income(t)

I then ask Copilot: "Why is there an error in this cell?" and it points me to the causes of the error.

Maas Group

Maas Group is closely connected to Firmus, which scrapped its planned IPO last week. MGH's share price more than halved as a result. But this selloff seems irrational to me, so I bought 20k shares. Firmus is not shutting down and Maas continues to work on their projects. The Firmus shares MGH owns were bought at a far lower price than the proposed float price. MGH recently sold a division for more than its current capitalization. Morningstar value it at $6.44 per share.

Found a $10k Error in Moominmama's Taxes

Throughout the year, I maintain a tax return spreadsheet for each of us, recording all relevant transactions etc. When tax time comes it doesn't take long to prepare our tax returns. I was updating Moominmama's spreadsheet today with her latest share transactions and found I made a massive error in this year's tax return (I start with the previous year's spreadsheet and modify it). I forgot to convert more than USD 20k of capital losses from Angellist into Australian Dollars. That means I overestimated her income by around AUD 5k. This is because only half of long-term capital gains are taxed under the current tax system. But the long-term capital gain is only halved after applying tax losses. Without this adjustment, it would be an AUD 10k over-statement.

Here is her restated tax return:

The submitted tax return resulted in an expected tax refund of $1,700. Now, I estimate we should get around twice as much back. I need to wait for the submitted return to be processed before filing an amendment.

L1 Global Long-Short Entitlement Offer

The L1 Global Long-Short Fund (GLS.AX) announced a 1 for 2 entitlement offer (known as a rights issue in the UK). You can buy one new share for every two you have for $1.76 a share. The current share price is $1.84, but they have traded as high as $2.17 in the recent past. You might think that issuing that many new shares will crash the share price. My recent experience is that isn't the case for funds like this, so it is likely to be possible to sell for a profit. 

I have 170,000 shares and am taking up the full 85,000 new shares. I am planning to hold onto 30,000 of them and to sell the rest. I am buying from my Commonwealth Bank offset account rather than trying to buy on my margin loan, which is a hassle. As the issuer has my CHESS HIN (Australian Stock Exchange ID) the shares will appear in my margin account. The highest you can raise your BPAY (an Australian payment system) limit to online is $100k. Until recently, $20k was the maximum you could raise it to yourself. So, I had to phone the bank and ask to raise it for the $149,600 payment. They then subject you to a bunch of questions about scams... They actually had to raise it to $2 million, as that is the next limit. I have now sent the money to L1 and then lowered the limit back to $20k. You don't need to submit a form, just pay via BPAY with the correct individual reference number. It's very convenient.

Ruffer Investment Company Update

In February 2024, I got out of Ruffer Investment Company. It was never meant to be an exciting investment, but even by that standard it was disappointing. We held for about 3 years with an IRR of -3.9% and a loss of £4,523. It was one of the investments I dropped in response to our disappointing 2023 performance.

What has it done since then?

It has gained a bit, but vastly underperformed the FTSE Index. It has gained 5.4% p.a. over the last three years and 3.7% over the last year. So, this was a good decision.

Out of Hearts and Minds

I am finally totally out of Hearts and Minds (HM1.AX). It was a great concept but a disappointing result. The concept was to invest in the "best ideas" of a small number of fund managers plus each year fill 35% of the portfolio with the pitches of invited managers at the Sohn Hearts and Minds Conference. And they donated to medical research instead of collecting management fees.

Based on the idea that fund managers fill a lot of their portfolio with second rate ideas in order to diversify and reduce concentration risk, picking their best ideas should work out well, no? There shouldn't be too much concentration risk because there are multiple managers and 30-40 stocks in the portfolio. 

My realized internal rate of return was 7.3% p.a. for a total profit of AUD 63k. I first invested eight years ago at the IPO. Here is my profit graph:

I did trade in and out of it a bit. Did that affect my returns? They claim a 10.3% p.a. rate of return since inception, so the answer is yes. But 10.3% underperformed the MSCI World Index, which has returned 12.5% p.a. over the same period.

What will I do with the money? I could reduce my USD margin loan in the account or buy more crypto-related investments. 

Using AI to Debug My Monthly Accounts

My accounting system produces all the nice numbers, tables, and graphs you see on this blog as well as our tax returns etc. But it is a complicated web of interlinked Excel spreadsheets. Each investment has its own workbook as does each set of monthly accounts and then there are the main sheets that consolidate all those numbers. It gradually grew, though I have done some major reforms to make things work better now and then. But there are always errors in the monthly accounts, which I mostly can track down quite easily and fix, but some are very hard to find.

So, I just started a free one month trial of Microsoft Office to see whether using Copilot inside Excel can find the elusive bugs. My former employer where I am now an emeritus faculty member doesn't support this function in Office.

The first goal was to fix discrepancies of around AUD 4k in the September accounts. I had to open around 35 files simultaneously so Copilot could see everything relevant that was linked. And then a dialogue ensued that took an hour or two. It quickly began to understand quite well what was going on in the system. It then got convinced it was an error in my transfers to Angellist of USD 3k. We went through step by step why that wasn't the case. I had to give it a lot of explanations of why it was wrong. Then it found the first genuine error–a transfer of AUD 10k to USD 7k-ish was missing from the sheet that calculates intramonth forex gains or losses (i.e. due to conversions between currencies during the month). But that didn't explain many dollars.

But once that was out of the way it only took us another 11 minutes to find the main error. I had written down a transfer of almost USD 3k out of the SMSF's Interactive Brokers account that went nowhere. Originally, this was a conversion from USD to CAD to buy Defi Technologies shares in Canada. But as there were a lot of transactions, I later consolidated all of them into one line. But I forgot to delete that number!

There is still an error of around $5. It's not worth tracking that down, though it might be fun 😀. 

Maybe this is worth paying for (AUD 150 per year). Clearly though this kind of tool only can work as a "co-pilot" with an expert on the system under investigation. 

Also, I wonder why I still calculate the monthly reconciliation for non-retirement accounts alone, which was one point of confusion for the AI. One of the things it thought might be an error was my pension from Unisuper, which appears to come out of nowhere. It might be simpler to just do it for all accounts.

2025-26 Tax Returns

Here is a summary of my 2025-25 Australian tax return (all numbers in Australian dollars):

You can find previous years here. Salary was up massively due to the redundancy package. I only actually worked for 5 months of the year. Also, $100k of the redundancy package was totally tax free and is not included in my tax return. Also, I started to realise more capital gains–up 129%. Dividends increased more modestly and total income was a record $370k, up 41%. 

Deductions also increased this year, mainly because of the personal superannuation deduction of $13k. In theory you can contribute up to $32.5k per year in concessional superannuation contributions. But I had already used more than half the cap in employer superannuation contributions. I also loaded up on employment deductions before quitting :). Deductions totalled $43k, up 52%.

So, in summary taxable income was $327k, up 39%. My estimate of tax payable depends on me understanding the correct interaction of the tax on the redundancy package and the tax on my regular income. I could be wildly out on the $95k. But I have $14k in franking credits from Australian dividends and a disappointingly small venture capital offset to reduce that tax down to an estimated $80k. I estimate I will owe $2.5k in tax :(. 

Div 293 tax is an extra 15% tax on superannuation contributions if you earn more than $250k. I doubt I will ever need to pay that again.

Here is a summary of Moominmama's tax return:

She had big jumps in Australian dividends and foreign source income. The latter is mainly gains on Australian Dollar futures.

As a result gross income came in at $116k, up 6%. Deductions were down by 26% due to keeping more money in our offset account, which reduces mortgage interest. Yes, it is tax-deductible if you do debt recycling.

As a result, taxable income was up 39% to $75k. Gross tax of $15k is offset by $10k in tax credits to result in net tax of $5k. She should get a refund of c. $1,700. 

Separate to all this is the tax return for our self-managed super fund. I still need a tax statement from Assetora, but the deadline for SMSF's to submit tax returns is much later. 

30 Years of Net Worth Data, Half a Decade at a Time

I started tracking expenditure, income, and net worth in Australian Dollar terms when I moved to Australia for the first time in October 1996. My accounts from before that date are in Pounds Sterling or US Dollars and I wasn't investing. So, the base net worth for rate of return calculations was September 1996. We now have 30 years of data. I thought it would be interesting to track progress five years at a time. I think I got the idea from some Berkshire Hathaway report that tracked progress in a similar way. 

All numbers are in Australian Dollars. Investment profit is post implicit superannuation taxes but the accumulation index is pre-tax. Net worth growth rate and annual rate of return are compound growth rates over the five years previous to the date on the left.

Overall, net worth increased by about 800 times and investment achieved a 6x multiple. But each half-decade was unique. September 2001 was before the worst of the tech wreck. Profit and net worth were already down from their peaks but I still had achieved an average 7.8% annual rate of return and a 67% net worth growth rate and had saved over $130k, which is pretty impressive on a salary of about $50-60k per year.

In September 2006, I was back in the US and markets were a year from their pre-GFC peak. Returns were weaker at 5.4% per year because of the losses in 2001-2003. I had added another $160k to saving. My salary was higher in the US, but I dissaved a lot in 2001-2002 when I was unemployed and travelling to find a new academic job. Net worth grew an average of 23% per year.

In September 2011, I was now married and back in Australia. I had recently got a continuing position as full professor. However, the previous five years included the GFC. So the average rate of return was negative at -7.9%. Moominmama was a post-doc fellow and I only had a job for part of the time. But we still managed to increase net worth by 2% per year by saving $223k! 

The next decade saw net worth grow by 28% per year and investment returns were above 10% per annum. In September 2016, we had reached millionaire status in both Australian and US Dollar terms by saving more than $600k and adding $1/2 million in investment returns. This was the best 5-year period for investing with an average return of 12.5% per annum.

By September 2021, we were in the post-COVID stock market rally. Net worth was over $5 million after saving another $400k, receiving the main inheritance, of $1.8 million, and adding close to $2 million in investment returns.

Finally this month, net worth is over $8.5 million. We can no longer grow net worth as rapidly. We continued to save after the inheritance–including the boost from the redundancy package and despite the beginning of retirement dissaving this year. We added another two and a half million of investment returns. Returns were lower at 8.6% per annum. They are still 1% per annum ahead of our target portfolio and 3% p.a. ahead of a Vanguard Australian Dollar 60/40 passive benchmark. It might come as a surprise, but major stock indices also grew more slowly in the last five years than in the previous five.

September 2026 Report

After five up months, September was a down month. The Australian Dollar fell from USD 0.7164 to USD 0.6983. So, our Australian Dollar returns are higher than our USD returns. 

Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): -1.08%

S&P 500: -0.35%

HFRI Hedge Fund Index: 0.08% (forecast)

Australian Dollar Benchmarks

ASX 200: -2.10%

Target Portfolio: 0.40% (forecast)

Australian 60/40 benchmark: -0.90%

In Australian Dollar terms we lost 1.52% and in US Dollar terms 4.01%. As a result we only outperformed the ASX 200 benchmark. The SMSF returned -2.64%, underperforming both Unisuper and PSS(AP) which lost 0.85% and 0.46%, respectively. Here is a report on the performance of investments by asset class:

The asset class returns are in currency neutral and gross asset terms and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. All asset classes apart from futures and commodities lost money. Within futures and commodities, cryptocurrency and managed futures made positive contributions and Australian Dollar futures detracted. Hedge funds had both the worst return and detracted the most. However, the Acadian Global Long-Short Fund was one of the best performers this month. There is a lot of variability within these asset classes.

Things that worked well this month:

• We had 5 investments that gained AUD 10k or more : Silvia (SVIA, 21k), Bitcoin (18k), Acadian Global Long-Short (13k), L1 Gold Fund (LGF.AX, 10k), and ZIM (10k).

What really didn't work:

• We had 9 investments that lost AUD 10k or more: Gold (34k), Pershing Square Holdings (PSH.L, 27k), Tribeca Global Resources (TGF.AX, 26k), Regal Investment Fund (RF1.AX, 16k), 3i (III.L, 15k), Australian Dollar Futures (15k), L1 Global Long-Short Fund (GLS.AX, 14k), Pengana Private Equity (PE1.AX, 11k), and URF (10k).

Our distance from our new target allocation increased slightly. Our actual allocation currently looks like this:

Around 70% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity and credit, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.

Moominmama receives employer superannuation contributions every two weeks. There will still be capital calls from Aura Venture Fund II and III. I am receiving monthly pension payments from both Unisuper and our SMSF, totalling AUD 6,770 per month. I made the following moves:

• I invested a total of USD 3,000 in two startups on Angellist.  
• We continued to add to our "crypto basket" including 3,500 shares of IBTC.AX (= 0.35 bitcoin), around AUD 48k of QETH.AX (ethereum ETF), 3k shares of SVIA (fomerly BRR), and establishing a 50k share new position in Defi Technologies (DEFI.NE/DEFT), which we also invested in in the previous cycle. We now have 5.4% of net worth in this basket.
• We added another 1,000 ZIM shares. 
• We sold the following shares to fund this build up: 369 AMLP, 1,000 PBDC (whole position), 2,000 WCMQ.AX, 7,000 HM1.AX., and around 15k CDO.AX shares.
• I also sold 50k L1 Gold Fund (LGF.AX) shares after receiving 30k in the rights issue. This brought our CommSec margin loan down to AUD 43k. Given its high interest rate, I plan to use it for trading rather than long-term investment going forward. This is part of the "restructure".
• Continued to trade options on TWE.AX and did a couple of other stupid short-term trades that luckily didn't lose much money.

Here are the income and spending accounts * for this month ($ is Australian Dollar):

Other income includes Moominmama's salary and net employer superannuation contributions but also the tax paid by the SMSF. Spending was typical of non-school-fee months at AUD 8.2k. This number does not include our mortgage payments, which are regarded here as saving (principal) and investment costs (interest) but it does include depreciation on our car, which is a few hundred dollars a month now. We lost $111k investing. Retirement net contributions (Other income retirement) were $516. The transfer out of retirement is my pensions. Tax credits on non-superannuation accounts were $4k. As we report superannuation investment returns on an estimated pre-tax basis, the implicit tax ($386) needs to be deducted to get to the change in net worth.

Dissaving amounted to $4.3k, which is well within the 4% rule limit of AUD 23k.  

As a result of all this, net worth fell by AUD 119k to AUD 8.567 million.

* Results are shown separately for retirement and non-retirement accounts as well as housing, which nowadays doesn't have much activity. The grey shaded rows are additional notes. Total investment income is split into investment income before exchange rate moves and the contribution of exchange rates. Current other income is non-investment income including salaries and net income tax returns, while on the retirement side it includes employer superannuation contributions minus superannuation contribution tax and all SMSF tax payments to the ATO. Investment income is shown pre-tax. Tax credits include franking credits on Australian dividends etc. in non-retirement accounts and the SMSF and imputed tax on industry superannuation returns. These are taken away from investment income to get changes in actual net worth. Inheritances include gifts from relatives. Saving is from non-investment income, transfers, and inheritances not investment income.

Bitcoin Bull Market Confirmed

Didi is my top crypto guru. He has been very accurate.

Private Placement Life Insurance

I am continuing to restructure our finances in response to the changes in capital gains tax in Australia. When I made our venture capital investments, I assumed that the maximum capital gains tax rate was 23.5%. I put the investment in Moominmama's name, as at that time her marginal tax rate was lower than mine. Originally, I wanted to put these investments in our SMSF, but they didn't allow that. I still think that is crazy, when farmers can have their farms in their SMSFs. 

So what should we do with these investments under the new tax regime? There is a chance that we will get a big cash realization on one of the companies I invested in in a single year. That would push most of the gain into the 47% tax bracket. We would like to smooth the gain and ideally reduce the tax rate.

As an existing investor and shareholder of Aura Group, I learnt about a product called private placement life insurance or an offshore insurance bond that they have begun to market. You may be familiar with Australian insurance bonds. Little My has one containing the money he inherited from my mother. This is the same idea with three key differences:

1. The Australian bond is taxed at the company level at 30%. These are based in the Isle of Man and are not taxed inside the bond. If you withdraw the money after 10 years, the ATO has ruled that the payout is tax free the same as it is for the Australian bonds. You can receive distributions before 10 years if you pay tax on the profit component.

2. You can contribute existing assets including alternative investments and brokerage accounts into the bond. The downside is that you can no longer transact on these accounts, you have to go via the manager–Aura in this case.

3. At least one of the "insured" has to be a wholesale investor. 

So, this meets both our goals. There is still the question of whether they can take the Angellist investments. Without that there is no point. And I am a bit hesitant to cede control. And of course there will be a lot of fees. We would be including other investments beyond the Angellist ones to get the size up. 

Even if we don't end up doing this, this seems likely to be a great business for Aura.

If we don't do this, an alternative is to set up an Australian investment company that will convert capital gains into franked dividends. This will lower the tax rate from 47% to 32% by smoothing the payout over time.

The irony of Labor's tax changes is that the the young people they claimed to want to help will bear the brunt of the changes, while wealthy investors can exploit various tax shelters to reduce the impact.

Money Scripts

Ramit Sethi is always talking about "money scripts"–deeply embedded ideas that affect how you deal with finances. Now you can take a test (it doesn't take long) to see which ones you have. There are four main scripts: Money avoidance, money focus, money status, and money vigilance. I came out equally strongly on money focus and vigilance. So, I think money can solve problems and I am very vigilant about our money. This makes sense. I had low scores on money avoidance–that makes total sense–and money status–I don't spend money on showing off. Of course, I think I have a healthy combination. Too much focus on just one of the two scripts would probably not be good. How did you do on the test?

Upcoming Millionaire Interview

I did a "Millionaire Interview" for the ESI blog. It took a couple of days of work! Even though I keep accounts in both AUD and USD, quite a lot of things I hadn't done in USD before or needed updating. Also, I had never calculated our saving rate. I had focused on the dollar amount.

I think it will be a while till it appears on the site. Friday was the deadline to be in the draw for the 500th interview, but as you can see the latest interview is #479 and took place in March!

P.S.

It will be on 12th March 2027! Number 503. 

APSEC Update

Now and then, I check investments I got out of to see if my thinking was correct. In early 2024, I got out of the Atlantic Pacific Australian Equity Fund or APSEC. Until this June they haven't done well: 

So, that was a good decision.

Changed My Mind on AIX but Not on Charter-Hall

Given how bullish everything is and Anthropic is supposed to imminently file for its IPO, I decided to make a small allocation to AIX in the SMSF. I am investing the distribution from the Regal Investment Fund in it. In hindsight, I should have tried to participate in the SpaceX IPO and flipped the shares after a few days. Yesterday, I thought again about investing in the Charter-Hall fund investing in the Sonic Healthcare lab. It is attractive to get an almost certain 7.5% yield with the potential for upside. And I like direct real estate (as opposed to listed real estate). But I really don't want to lock up my money for five years, when there are so many other opportunities. After all, I get 6.5% implicit interest on the money in our offset account with 100% liquidity and the possibility of putting into trades if and when they show up. 

Regular Charitable Giving

Increasingly, we support charities through monthly payments rather than one off contributions. This means that I don't need to wonder how much I already gave to a charity this year when I get another request to contribute. Once a charity is on our list I ignore requests for additional contributions... Instead, I just look at what they have done with the money. I would consider a new charity. Here are the charities we are currently supporting:

Save the Children: This was Moominmama's pick a long time ago, before we had children ourselves. It is our longest running charity. We are giving $40 a month.

Opportunity International Australia: This funds microfinance lenders in South and Southeast Asia. I like the idea of helping people to improve their life through investing in their own business. We are giving $17 a month.

WIRES: How could you say no to helping injured koalas? We give $30 a month to this charity.

Bush Heritage Australia: They fund habitat conservation in Australia. This is our most recently added charity. We are giving $30 a month to this.

RSL Queensland: This one is a bit different as we support it through Dream Home Art Union. As most of the contributions go to prizes, it's not tax-deductible. Someone was selling the tickets outside our local supermarket and I just thought I had this intuition that I had to buy. Anyway, it's fun thinking I might win something. A very asymmetric bet. The charitable component goes to support veterans in Queensland. Also $30 a month.

All in, it's about 1% of spending. In the longer term, I would like to give more money to charity but would want to be more purposeful about it.

It's Good I Got Out of WAM Capital When I Did!

A little while ago, I switched from WAM Capital to WAM Active. After I switched, WAM Active (WAA.AX) reported a bad result for July and the stock fell. I was annoyed I had switched too early. But actually it was a good move because since then WAM Capital (WAM.AX) has announced about a halving of the dividend going forward and the stock has collapsed. The dividend was unsustainable. The fund had increased it in a period of very good returns, and maintained it until now, despite lower returns, including a loss last year. Here is WAM Capital's chart:

And here is WAM Active's chart:

 

August 2026 Report

We "crushed it" this month. It was our biggest monthly investment return in dollar terms so far.  The previous best month was November 2024. Stockmarkets rose while commodities like gold and bitcoin skyrocketed as the US government tried to suppress long-term interest rates. Gold, in particular, eased back at the end of the month after Kevin Warsh made a "hawkish" speech at Jackson Hole. The Australian Dollar rose from USD 0.7024 to USD 0.7164. So, our Australian Dollar returns are lower than our USD returns. 

Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 2.70%

S&P 500: 2.72%

HFRI Hedge Fund Index: 1.69%

Australian Dollar Benchmarks

ASX 200: 1.73%

Target Portfolio: 2.83%

Australian 60/40 benchmark: 0.72%

I marked up our Angellist investments based on the news from the general partner, though these gains may end up getting reassigned to another month. In Australian Dollar terms we gained 5.93% and in US Dollar terms 8.04%. As a result we outperformed all benchmarks. The SMSF returned 2.67%, beating Unisuper and PSS(AP) which gained 1.78% and 1.21%, respectively. Here is a report on the performance of investments by asset class:    

The asset class returns are in currency neutral terms and gross asset terms and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. This analysis shows that even without the private equity gains, which made the greatest contribution to returns, we did very well for the month, beating all benchmarks, as USD returns are around 2% higher than these currency neutral returns. This is our fifth positive month in a row now, since our worst loss ever in dollar terms in March.

Things that worked well this month:

• We had eight investments that gained more than AUD 10k: Angellist Investments (206k), Tribeca Global Resources (TGF.AX, 52k), Gold (50k), L1 Gold Fund (32k), Bitcoin (23k), Unisuper (15k), L1 Global Long-Short Fund (GLS,AX, 14k), and Pershing Square Holdings (PSH.L, 13k).

What really didn't work:

• We had two investments that lost AUD 10k or more: WAM Active (WAA.AX, 10k) and URF (10k).

Our distance from our new target allocation decreased. Our actual allocation currently looks like this:

Around 70% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity and credit, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.

Moominmama receives employer superannuation contributions every two weeks. There will still be capital calls from Aura Venture Fund II and III. I am receiving monthly pension payments from both Unisuper and our SMSF, totalling AUD 6,770 per month. I made the following moves:

• I invested a total of USD 5,500 in two startups on Angellist. One is a biotech and the other is a follow on investment in Chowdeck, the Nigeria-based delivery app.
• I bought 8,500 shares in the Monochrome bitcoin ETF (IBTC.AX). We now have 1.6 bitcoins worth. I also bought 2,000 more shares of ProCap Financial (BRR), which is mostly a bitcoin treasury company, and 500 shares of an Ethereum ETF (QETH.AX) or around 3.5 ETH.
• I sold c. 17k shares of Hearts and Minds (HM1.AX) to fund buying bitcoin.
• I sold 35k shares of WAM Alternative Assets (WMA.AX) mainly to reduce our margin debt. Next month, we will be participating in the L1 Gold Fund rights issue.
• I sold our remaining Berkshire Hathaway position. 
•  I bought another 1/4 million URF.AX shares.
• I bought another 2,500 ZIM shares. 
• Our Treasury Wine Estates (TWE.AX) position was called away and afterwards I wrote puts to try to get paid to buy a new position. 

Here are the income and spending accounts * for this month ($ is Australian Dollar):

Other income includes Moominmama's salary and net employer superannuation contributions but also the tax paid by the SMSF. Spending was quite low this month at AUD 8.5k even though this includes almost AUD 2k of depreciation recorded on our new car and we paid all the quarterly utility bills and body corporate fees (condo association). This number does not include our mortgage payments, which are regarded here as saving and investment costs and saving. We gained $410k investing. Retirement net contributions (Other income retirement) were negative as Moominmama's contributions were outweighed by SMSF taxes. The transfer out of retirement is my pensions. Tax credits were only implicit tax paid by our employer super funds. AS we report superannuation investment returns on an estimated pre-tax basis, the implicit tax needs to be deducted to get to the change in net worth.

Dissaving amounted to $7k, which is well within the 4% rule limit of AUD 23k.  

As a result of all this, net worth rose by AUD 399k to AUD 8.687 million.

* Results are shown separately for retirement and non-retirement accounts as well as housing, which nowadays doesn't have much activity. The grey shaded rows are additional notes. Total investment income is split into investment income before exchange rate moves and the contribution of exchange rates. Current other income is non-investment income including salaries and net income tax returns, while on the retirement side it includes employer superannuation contributions minus superannuation contribution tax and all SMSF tax payments to the ATO. Investment income is shown pre-tax. Tax credits include franking credits on Australian dividends etc. in non-retirement accounts and the SMSF and imputed tax on industry superannuation returns. These are taken away from investment income to get changes in actual net worth. Inheritances include gifts from relatives. Saving is from non-investment income, transfers, and inheritances not investment income.

Updated Australian Wealth Distribution

Economists at ANU have used a simulation model and other data to update the Australian Bureau of Statistics household wealth distribution. The ABS haven't done a detailed survey since the pandemic. 

These figures are higher than recent estimates by the Grattan Institute. I believe these more. Due to data limitations they only estimate the threshold for the top 1% for all age groups together. I am guessing based on this that the top 2% is around $8.5 million. So, we are just on the borderline of the top 2% but a bit lower among households with a head between 60 and 64 years old.

I am surprised by the high estimate net worth to be in the top 5% of 25-29 year olds! 

Another Attempted Scam

Recently, someone used our CBA credit card in California. Now, I got a message from MyGov that someone has been trying to sign into my account. I just learned that you can check the account history on the site, and someone has been making multiple attempts to try different passwords with my email address. I have now upgraded my security (I wasn't using my email address anyway) to use the government run MyID. It is important to take a separate second step to turn off access via password.

I guess the scammer was hoping to claim a benefit from Centrelink? Or just get more information on me for identity theft? They can't have been wanting to pay tax for me! 😅

Novig Series B

Novig–one of our startup investments–raised a Series-B round at around a 5x markup on their previous price. It was already our most successful venture investment so far. Angellist have not updated the valuation yet. After the "carried interest" for the general partner who manages our investment, we might see a 4x markup on top of our current 9.5x markup. It would take our overall Angellist IRR to 24% and my own investments in syndicated startups (rather than through venture funds) to an IRR of 70%+. 

Of course, these are all "paper profits". But it's kind of crazy to think that this markup and expected markups in their rolling fund are on the scale of the redundancy package I got last year, which was just over AUD 1/4 million, or more than a year's expenses. Hopefully, the capital gains tax comes back to some more sensible number when these investments are eventually realised.

Role of the Target Portfolio

After yesterday's post, you might think I just randomly change the target portfolio to follow what I want to do. Here is evidence that it has an effect on our performance:

 

This graph shows our portfolio returns each month with the target portfolio return deducted. There is a phase change in 2012. After 2012, our returns hug the target portfolio much more closely. Also, after 2012 we started to make money. I think this has come partly from allocating across asset classes to match a defined allocation. The trend line on the graph rises–we underperformed the target before 2012 and outperformed after–but I'll agree that it doesn't look too convincing. So, we can't say for sure whether this was due to mostly being in a bull market for stocks since 2012 or more disciplined investing.

Changes to the Target Portfolio and Trading

I use a target portfolio as a performance benchmark and as a guide to where to invest. Now and then I make tweaks to bring it in line with what I want to do. I am increasing the allocation to futures and commodities and reducing the allocations to credit and real assets. Futures and commodities go from 5% to 10%, real assets from 12% to 10%, and credit from 10% to 7%. 

This is related to wanting to do more trading. I am having more and more trade ideas. I think, like Karsten Jeske, I won't be satisfied to just sit and watch my portfolio. I want to do something active to generate income. He sells S&P 500 options. My latest idea–which I haven't implemented yet–is related to that. But I am also doing lots of different things which are different to just buying funds (or startups) and waiting:

1. Gold: I buy gold when the price falls and sell when it rises. Part of my gold exposure is now in a December futures contract (50 ounces).

2. Australian Dollar: I have Australian Dollar Futures as a currency hedge. Some day I will get rid of that hedge.

3. Individual stocks: Currently, I have ZIM, Treasury Wine Estates (TWE.AX), and Regal Partners (RPL.AX). These are all valuation stories. 

4. Bitcoin: I am again accumulating bitcoin after selling out of it. 

5. URF: This is a listed fund on the Australian stock market invested in US residential property. It is in its final stages of winding down, but still trading below net asset value.

6. Trading funds around NAV: I am prepared to trade almost anything that significantly deviates from net asset value. This includes paintings on Masterworks, properties on Assetora, and all the closed end listed funds I am invested in. 

I like doing it, but also feel like I should be doing something to earn a living 😀 with our high level of spending relative to most retirees.

Charter Hall Direct Life Sciences Fund

I got an email today about this new fund. It is an investment in a building hosting a Sonic Health Care lab.

At first glance, it sounds attractive. They are advertising a 13% projected rate of return. Before performance fees. Performance fees would only knock 0.5% off that, so still sounds attractive. But actually, the 13% target is based on the capitalization rate declining from 5.25% to 4.75%. 5.25% is already a lot below current office cap rates. If that change in cap rate doesn't happen, they expect a 9.4% IRR. Of course, if the cap rate rises, the return will be less than 9.4%. They project that the distribution rate will be 7.5% per year. Only half of that will come from net income. The rest will come from increasing the loan against the property as rent rises (it rises at CPI with a cap of 3.5% p.a.) and distributing some of the unrealised capital gains in that way. They do seem to have a very low interest rate on the mortgage. Don't know how. This is tax deferred income, but means most of the expected returns on this investment are capital gains, which will be subject to a 30% minimum tax rate going forward. The fund is locked up for 5 years, after which, if they decide to stay invested, some liquidity might be available. The tenant has a 20 year lease.

After all these considerations, this looks a lot less attractive to me. To lock money up I need to think there might be an above market gain. Like 13%. I am pretty doubtful of that outcome here. The minimum investment is $100k. So, I will probably pass on this one. 

Someone Used Our CBA Credit Card in California

 

They used it at a Rite Aid in the Sacramento suburbs and at a gas station in Tracy, CA. Commonwealth Bank queried the transactions and now I have cancelled the card. Definitely, only use a credit card for online transactions. If this was a debit card, the charges wouldn't be reversed as they are immediately deducted from the account. But really the banks need to make the whole payments thing more secure as this seems to be a more and more frequent occurrence. 

Probably, there is nothing stopping us from using credit cards for everything? Currently, we each have an account at HSBC with a debit card we use for most day to day spending. These accounts have little money in them. But HSBC is closing its retail banking in Australia.

Yes, that's the actual gas station they used it at in the picture. 

July 2026 Report

The Australian Dollar rose from USD 0.6909 to USD 0.7024. So, our Australian Dollar returns are a lot lower than USD returns. World stockmarkets were flat, while the Australian market rose.

Here is the performance of our benchmarks (total returns including dividends):

US Dollar Indices

MSCI World Index (gross): 0.10%

S&P 500: -0.06%

HFRI Hedge Fund Index (forecast): 0.08%

Australian Dollar Benchmarks

ASX 200: 2.26%

Target Portfolio (forecast, depends on HFRI): -0.11%

Australian 60/40 benchmark: -0.23%

In Australian Dollar terms we gained 0.60% and in US Dollar terms 2.28%. We outperformed all benchmarks apart from the ASX200. The target portfolio has more or less flatlined since September last year as the Australian Dollar rose and more recently gold fell:

I've been through a bit of excess volatility, peaking in January. Until this month the ASX200 has also been going sideways:

You'll notice that even the S&P 500 doesn't look as spectacular in the last couple of years when converted to Australian Dollars! The SMSF returned -0.36%, beating UnisupeR, which lost 0.59%. But PSS(AP) was up 0.63%. Here is a report on the performance of investments by asset class:

The asset class returns are in currency neutral terms and gross asset terms and do not include investment expenses such as margin interest, and so the total differs from the Australian Dollar returns on net assets mentioned above. This month was the reverse of last month: private equity and futures led the way. Rest of world stocks had the worst rate of return and hedge funds detracted the most.

Things that worked well this month:

• 3i (III.L) and Australian Dollar futures gained AUD 10k or more, with the former gaining AUD 33k and the latter 10k.

What really didn't work:

• Tribeca Global Resources (TGF.AX) lost AUD 26k.

Our distance from our target allocation increased very slightly. Our actual allocation currently looks like this:

Almost 70% of our portfolio is in what are often considered to be alternative assets: real estate, art, hedge funds, private equity and credit, gold, and futures. A lot of these are listed investments or investments with daily liquidity, so our portfolio is not as illiquid as you might think.

Moominmama receives employer superannuation contributions every two weeks. There will still be capital calls from Aura Venture Fund II and III. I am receiving monthly pension payments from both Unisuper and our SMSF, which going forward will total AUD 6,750 per month. I was very busy investing this month, making the following moves:

• I invested a total of USD 6,000 in four new startups on Angellist. They cover the defence, biotech, education, and real estate sectors.
• I bought a total of 7,500 shares in the Monochrome Bitcoin ETF (IBT.AX). That amounts to 0.75 bitcoins. I also bought 5,000 shares of ProCap Financial (BRR), which is mostly a bitcoin treasury company.
• I sold 5,000 shares of Cadence Opportunities (CDO.AX), 11k shares of Hearts and Minds (HM1.AX), and 2,500 shares of Treasury Wine Estates (TWE.AX)–the money to buy bitcoin has to come from somewhere.
• I bought another 5,000 shares of Regal Partners (RPL.AX). Still don't understand why this seems so undervalued.
• I bought another 500 shares of the Alerian MLP ETF (AMLP).
• I sold 6,000 shares of the gold ETF PMGOLD.AX as part of the "restructure" as well as buying 30k shares of the L1 Gold Fund (LGF.AX) and opening a gold futures position in the SMSF and closing the AUD futures position in the SMSF. We still have AUD futures in our personal IBKR accounts.
• I bought 1.25m shares of the US Residential Fund (URF.AX) using the margin freed up by the restructure.
• I sold all our position (110k shares) in WAM Capital (WAM.AX) and replaced it with WAM Active (WAA.AX, 150k shares).
• Finally, I started selling covered calls on our Treasury Wines position (TWE.AX). 

Here are the income and spending accounts * for this month ($ is Australian Dollar):

Other income includes Moominmama's salary and net employer superannuation contributions but also the tax paid by the SMSF. Spending was high this month–AUD 29k, the third highest ever in nominal terms–due to paying school fees, a big dollop of depreciation recorded on our old and new cars, and the stamp duty and insurance on buying the new car. I opted to again insure our car rather than just insure against damaging other cars.  This number does not include our mortgage payments, which are regarded here as saving and investment costs and saving. Dissaving amounted to $23k, which is at the 4% rule limit of AUD 23k. We gained $41k investing. There was only $645 this month in tax credits and implicit tax on our employer super, which are included in pretax investment returns but have to be deducted to get to the change in net worth. But there was a big transfer to superannuation as I carried out the "restructure". Net of my pension payments it was around AUD 90k. As a result of all this, net worth rose by AUD 17k to AUD 8.261 million.

* Results are shown separately for retirement and non-retirement accounts as well as housing, which nowadays doesn't have much activity. The grey shaded rows are additional notes. Total investment income is split into investment income before exchange rate moves and the contribution of exchange rates. Current other income is non-investment income including salaries and net income tax returns, while on the retirement side it includes employer superannuation contributions minus superannuation contribution tax and all SMSF tax payments to the ATO. Investment income is shown pre-tax. Tax credits include franking credits on Australian dividends etc. in non-retirement accounts and the SMSF and imputed tax on industry superannuation returns. These are taken away from investment income to get changes in actual net worth. Inheritances include gifts from relatives. Saving is from non-investment income, transfers, and inheritances not investment income.

Got Out of Berkshire Hathaway Again!

I bought 200 shares of Berkshire Hathaway B just after Warren Buffett announced that he would retire as CEO. This was around the time of the "Tariff Tantrum". My thesis was that the stock would rise as Greg Abel deployed the huge cash pile. He has made some moves, but the stock has gone sideways. In the meantime, I sold half the position and today the rest of it. I have better ideas for the money, namely ZIM. At least I think it is a better idea.

I guess I am just not patient enough to be a Berkshire shareholder. I have been in an out of the stock many times. Overall, my IRR is 7.4% and AUD 21k in profit, though this recent period lost AUD 4k.

The Financial Reality of Being a (Moderately) Wealthy Retiree in Australia

Unless you are quite wealthy, not well organised or under 60, you shouldn't be paying any income tax in this phase of life. The following breakdown is based on my expected income and tax figures for the 2026-27 tax year.*

First, since transferring the maximum allowed into an "account based pension", I should get a tax-free pension of $81k per year. This is the minimum allowed distribution to maintain the tax-free status of my pension account. For my employer superannuation, that is as simple as just setting up a payment of $2,750 each month from the account. For our self-managed super fund (SMSF), I have to make sure I have enough cash in our Macquarie Cash Management Account to pay the $4,000 a month pension. Currently, I have around one year's worth of cash there. The SMSF will still be paying tax on Moominmama's account, my small remaining accumulation account, and concessional contributions. More on that later.

Then I expect to earn to around $100k net outside super, which would put me in the 32% tax bracket. This includes quite a lot of capital gains that I plan to take this year before the new CGT regime comes into effect. To reduce my tax liability, I will make the maximum allowed concessional superannuation contribution. I call this a no-brainer contribution, as being retired, I could take it out again the next year. The contribution will reduce my taxable income by $32,500.**

The contribution is taxed at 15% in the SMSF. But as that is less than 32%, it is a win, and that is not income tax. 

On the remaining $67k, there might be about $13.5k in tax payable. But I expect to have around $20k in franking credits and early stage venture capital offsets. These more than wipe out my tax liability, resulting in a tax refund of $6.5k adding to my income. So, I will have negative income tax. I have then $165k in disposable income, which almost covers our expected expenses of about $180k. The remainder will be covered from Moominmama's earnings.***

In order to pay income tax, you would probably need to be at least in the 37% marginal tax bracket–more than $135k of income outside superannuation. This is assuming you have a supply of franking credits and do a little borrowing etc. to generate deductions.

If you are a retired couple, you can double all these figures for a household income. 

* In Australia, the tax year runs from 1 July to 30 June. All numbers are Australian Dollars.

** You can make concessional contributions up to age 67 without a work test. But after age 65 the minimum required pension jumps to 5% of the account value. So, you might want to reduce capital gains realisations.

*** I won't exactly spend the capital gain, as the proceeds of those transactions will largely be reinvested. First of all, the part of the proceeds that is the original investment doesn't enter income, and only 50% of the gain is recorded as income under the current rules. But I could spend the $165k and only need $15k from Moominmama. 

Cancelling Moominmama's Insurance

I cancelled life and disability insurance on Moominmama's superannuation account. Here in Australia there are number of different types of insurance that are tied to your retirement account (health insurance isn't one of them!).

Her job will end in either 1 week (fast track) or 8 weeks (slow track). By law, superannuation funds cancel all insurance if there haven't been any contributions for 16 months. I did not know this till now. The insurance is costing us more than $200 per month. I don't see the point in continuing to pay. Not being a big fan of insurance in general, I probably should have cancelled ages ago.

I think she should take the fast track–quit in one week's time and get a bigger redundancy payout–rather than the slow track, which means working another 7 weeks and getting a smaller payout, but earning salary, superannuation contributions, and leave entitlements during that time. The fast track pays about $1,500 more and you get the interest on getting the redundancy payment earlier. But for unclear reasons she is leaning towards the slow track, even though she essentially has no work to do. I told her she can do this if she wants as $2,500 is not that much money 😂. She did this analysis using Gemini, which produced about the same result as I calculated and argued it said the slow track was better. But that was ignoring tax, which is higher on the slow track. Gemini did include the tax on a separate line and then on the final line gave the net result.

Selling Covered Calls

I realised I could sell covered calls on my Treasury Wine Estates position. I haven't sold options in decades, I think. I sold 150 Aug 2026 5.50 calls (There are 100 shares per contract). This strike is 10% above the current price. I would be very happy if the position gained another 10% in three weeks. I think it is pretty unlikely though, so can pick up 2.5 cents per share (minus commissions). It's mainly just for fun, but if I did this consistently, it would provide a decent annual yield. I always like the idea of selling options–getting the opportunity to create securities out of nothing, seems like magic!

Switching from WAM Capital to WAM Active

I first invested in WAM Capital (WAM.AX) in April 2025 during the "Tariff Tantrum". This has mainly been an investment in our SMSF. But the portfolio performance over the last year has been disappointing, with a 10.5% portfolio loss before fees etc. This vastly underperformed the market. All the WAM small cap funds apart from WAM Active (WAA.AX), had a similar performance. 

WAM Active was up 75% and up an average of 26% in each of the previous two years. It is managed mainly by Shaun Weick, while the overall small cap strategy is overseen by Oscar Oberg. The fund takes a more active trading stance. It had a 10x portfolio turnover in FY 26 and they participated in 87 capital raises! Three years ago, its strategy was separated from the other small cap funds.

So,  I have sold my WAM position of 110k shares and bought 150k shares of WAM Active. Overall, we made AUD 19k on WAM Capital with an IRR of 9.9%. So, we still made money despite the poor performance of the underlying portfolio. But I think we can do better.

Spending 2025-26

Each year, I report on income and spending for the Australian financial year, which runs from 1 July to 30 June. This makes it easy to do a break down of gross income including taxes that's comparable to many you'll see online, though all our numbers are in Australian Dollars. Here is last year's report. I define a few things differently here than I usually do to make the numbers more comparable with other people's versions.*

At the top level we can break down total gross income (as reported in our tax returns plus employer superannuation contributions that are paid on top of nominal salary) into the following categories of spending (click on the image to read more easily):

The gross income for this year (bottom line) is just an estimate. It is based on the gross income we expect to report in our tax returns (before investment expenses etc.) plus employer superannuation contributions. Gross income is forecast to rise by 23% this year because of the redundancy package. It should fall again in 2026-27 despite a second redundancy payout.

Tax includes local property tax as well as income tax (projected) and tax on superannuation contributions. Tax is projected to rise by 26%! Investing costs include margin interest. These fell for the second year running. Mortgage interest is included in spending, while mortgage principal payments are considered as saving. Spending also includes the insurance premia paid through our superannuation. Current saving is then what is left over. This is much bigger than saving out of salaries because gross income includes investment returns reported in our tax returns. Spending fell for the second year running, by 0.7% and has been flat for the last four years. Mortgage principal saving rose again, because we are keeping more money in our offset account, reducing mortgage interest payments. Other saving rose 129% because of the redundancy. Graphically, it looks like this:

We break down spending into quite detailed categories. Some of these are then aggregated up into broader categories as shown here:

Our biggest spending category, if we don't count tax, is childcare and education, which increased by 12% this year. As mentioned above, the income and tax numbers are all estimates. Commentary on each category follows:

Employer superannuation contributions: These include employer contributions (we don't do any salary sacrifice contributions) but not concessional contributions we paid to the SMSF this year. They are down due to the redundancy and will fall dramatically in 2026-27.

Superannuation contributions tax: The 15% tax on concessional superannuation contributions including tax on our concessional contributions to the SMSF. It is up 24% this year, even though employer contributions fell, because the government increased the maximum concessional contribution to $32,500, and because I expect to pay a lot of Division 293 tax because of the redundancy payment pushing me further above $250k of income.

Franking credits: Income reported on our tax returns includes franking credits (tax paid by companies we invest in). We need to deduct this money which we don't receive as cash but is included in gross income. Foreign tax paid is the same story. If we get franking credits refunded that will reduce the income tax line.

Income tax: Hits a record this year again because of the redundancy.

Life and disability insurance: Only a 3% decrease despite the redundancy, because Moominmama's insurance skyrocketed. More people are claiming disability post-pandemic.

Health: Includes health insurance and direct spending. Up 13%. Spending peaked with the birth of our second child.

Housing: Includes mortgage interest, maintenance, and body corporate fees (condo association). It is down this year because we parked more cash in our offset account reducing the mortgage interest we need to pay.

Transport: About 60% is spending on our car and 40% is my spending on Uber, e-scooters, buses etc. It is down 8%. This will likely rise in 2026-27 when we include stamp duty and depreciation on the new car and a big write down in July on the old car, which we only got $500 for as a trade-in.

Utilities: This includes water, gas, electricity, telephone, internet, and online storage etc. Up 13%. Electricity rose 36%, water and sewage 16%, phone and internet 6%, and gas–the smallest expenditure in this group–fell 33%.

Subscriptions: Includes all payments for online electronic services that aren't basic infrastructure. Continues to flatline.

Supermarkets: Includes convenience stores, liquor stores etc as well as supermarkets. It has been constant for the last five years.

Restaurants: This was low in 2017-18 because we spent a lot of cash at restaurants and during the pandemic for obvious reasons. It has now levelled out. Actually, we spent quite a bit on restaurants while travelling in China and Vietnam that either came out of Chinese accounts that aren't included here or in cash.

Cash spending: This is up strongly this year due to spending in cash in China and Vietnam. Generally, Western credit cards can't be used in China.

Department stores: All other stores selling goods that aren't supermarkets. Fell 45%.

Mail order: This has come down over the last five years and halved this year compared to last. We now get mail order direct from China, which is paid for from China and doesn't enter these accounts.

Childcare and education: We are paying for private school for both children now, plus music classes, swimming classes... It was up 12%, after the school raised fees by 23% for 2026.

Travel: This includes flights, hotels etc. It was very high in 2017-18 when we went to Europe and Japan. In 2020-21 it was down to zero due to the pandemic and having a small child. It was up only 1% this year. We travelled to China and Vietnam.

Charity: Up 12%.

Professional: Up 292%. We got various things done while we could either still deduct them against salary income or get reimbursed by our employers. This included two computers and a lifetime membership of a professional association.

Other: This is mostly other services. It includes everything from haircuts to tourist attractions, movie theatres, and clothing and watch repairs. Up 26%.

This year's reduced spending was mainly driven by reduced mortgage interest and mail order costs, while the professional category and education were the main increasing categories. Professional will be much lower in 2026-27, while childcare and education and transport will probably be the biggest increasing factors. I predict a 3% increase to $179k.

* Income here is taxable income before deductions plus employer superannuation contributions, whereas I normally included unrealised gains in income and deduct margin interest etc. and I normally report salary post tax. Savings here are out of gross taxable income rather than just out of non-investment income normally. Mortgage interest is counted as spending here rather than an investment cost.