Income/Expenditure 2009: Australian Dollar Edition

I've produced a version of the annual accounts in Australian Dollars, which is what we are actually spending in and for the most part earning in:



Same format, different currency. We came in at over AUD 100k in after tax non-investment income - mostly salaries. This puts us near the top of the income distribution in Australia. Especially when we add in the retirement contributions and investment income. A large proportion of the latter is just bounce back in capital values though. This year will probably not look anything like that. The rising Aussie Dollar put a damper on the investment returns. Retirement contributions add 24% on top of the after tax salary due to the high contribution rates in public sector jobs in Australia and additional salary sacrifice contribtions we are making for Snork Maiden.

For non-Australian readers - the compulsory level of retirement contributions by employers is 9% on top of the pre-tax salary. But in the government sector the levels range from 15 to 17%. On top of that, at the universities, employees are required to contribute an additional 7% out of the salary for some reason.

The spending and saving percentages below the main table refer to saving from non-investment income and don't include stuff in the retirement column while the savings numbers in the main table include investment income.

Annual Report 2008: Final Episode

While I'm at it, here is finally the income, expenditure, savings report for 2008:



I didn't post it last year, as it was just so horrible. The crude savings rate from non-investment income was 9%. This compares to 41% in 2009 and a negative savings rate in 2007 when we moved to Australia. So I guess the trend is in the right direction. When I was single I managed the following savings rates: 2003, 34%; 2004, 48%; 2005, 43%; 2006, 58%. It's hard to imagine how I only spent $26k in 2006. But my rent was only $600 a month for a start.

Income/Expenditure Report 2009

I did an annual report for 2009 but skipped the actual income, spending, and saving accounts for the year. So here they are:



They follow the format of my monthly reports. All numbers are in USD though we mainly earn and spend in AUD. After tax salaries, tax refunds, etc. amounted to $82k. Out of that we spent $48k. So our crude savings rate there was 41%. Most of my salary, which we only had for a year, was saved. Retirement contributions from pre tax salary and the employer's contributions came to $21k (This number is also after the 15% Australian contributions tax). I also made a $732 contribution in after tax money in order to get the government co-contribution. Investment returns are pre-tax. Tax credits then adjust those returns so that we get the correct change in net worth. Our accounts saw a very strong rebound redressing a large part of the 2008 debacle. Net worth increased by $213k about half and half split between retirement and non-retirement accounts.

Obviously, our true savings rate was above 41%. But if we compare expenditure to the total income figure we had a negative savings rate in 2008... So maybe that's not very useful. Comparing these numbers with this post I'd say we spent 40% on needs, 20% on wants, and saved 40% roughly.

Risk Reduction

I switched $A13,750 from our holdings of Colonial First State Geared Share Fund to the CFS Conservative Fund in my CFS Superannuation account. This effectively sells the units I purchased in July and September 2008 for a small profit. Even so, the value of our holdings in this fund in this account has still gone up this month at this point. Our allocation to large cap Australian stocks will be about constant this month and still well overweight and leverage will be down by just over a percentage point. Still this is a small step towards risk reduction without going overboard in any way :)

P.S.
I'm actually going to let the risk allocation in Snork Maiden's accounts drift up going forward. I increased the allocation of future investments in superannuation account in the "sustainable" (=Australian shares) allocation to 20% from 10%. The actual current allocation is 11%. I'm also going to tweak the allocations in her non-superannuation Colonial First State account. But I'll blog about that more when I actually make a move there. My accounts have gotten overinvested in risk and hers under, so we'll move them towards each other.

Job Search Update

The chairman just wanted to update me on the state of the job search. It'll be another two weeks till they can make a decision... I did get a bit more insight into what's happening at least and what the thinking is. There's a good chance I get a job but not yet a certainty.

P.S.

Just as I finished this blogpost I got a call from another university in Australia who want to interview me on 14th April...

Moominvalley February 2010 Report

These reports are now going to come about a month after the close of the month, because only then do we have reports from all funds. As usual, everything is in USD unless otherwise stated. The monthly income/expenditure report follows:



Our spending was a bit above the low end at $4,262 due to car expenses (registration and depreciation - there has been no depreciation for a about a year). There were moderately positive - the rate of return in USD terms was 2.14% vs. 1.31% for the MSCI World Index and 3.10% for the S&P 500. In AUD terms it was 1.16% as the Aussie Dollar rose against the US Dollar. The only asset class that lost this month were hedge funds. There were no big shifts in allocation. Net worth reached USD 409k (AUD 457k) an increase of $12k.

Leverage continued to decline. Loans are only 8.5% of net worth now and total leverage including leverage embedded within investments fell to 36.7% relative to net worth. The peak levels we hit were 90% total leverage in August 2008 and 38% loans to net worth in July 2008.

One Project Close to Closure the Other in Limbo

I submitted the final report for the project I did over the past year today, though I'll need to edit down the paper a lot to submit it to an academic journal for formal publication. I'll wait a while and do other stuff (plenty of it) before coming back to it with a fresh eye. We have already submitted two other papers from the project, which are now at various stages in the review process. Some more people at the government ministry want to meet with me to discuss the results, so that's good.

As I noted in the comments, the chairman wants to meet with me next week subject unspecified. Presumably about the job. I found out that another candidate hasn't heard anything yet so based on the theory that you don't reject interviewed candidates before negotiating with your preferred candidates, I don't think he wants to tell me in person he is rejecting me. Either he wants to make me an offer (but then why not just phone me) or he wants to ask me more questions that he didn't have a chance to at the interview or he wants to negotiate with me about what rank I'd accept in order to know how many people he can hire on his budget. That's all my ideas so far. So who knows. Maybe he wants to talk to me about something else. For example, a course they need teaching I was already asked about. I wish he'd specify the reason. But trying to act cool I just booked a time with his secretary and didn't ask him what it was about.

How Much Does it Cost to Replace a Car Window?

This isn't our car, just the closest picture I could find on the web

Some time between Saturday afternoon and Sunday morning someone smashed the front passenger window on our car, which was in a supposedly secure underground car park underneath our apartment building (at least in Canberra, car parks under the building are the norm at apartment complexes (why not complices?)). That's all that happened. Either they were looking for the garage opening device that all of us have been warned not to leave in our cars or thought that an empty bag lying on the back floor might have had a laptop in it. We won't leave a bag in the car again.

The police said that the body corporate should install security cameras. The body corporate person told me that cameras are useless...

Anyway, so we needed to get quotes. These guys who advertise on TV wanted $A450 whether we went to them or they came to us to replace the glass. NRMA quoted $A350. Another guy wanted $A300. In the end we went with a semi-DIY approach. This morning we went to Queanbeyan, NSW about 10 miles away and bought a second hand window for $A75. Then Snork Maiden took it to another place in Canberra that cleaned and fitted it for $A88. You need to add some time and fuel costs into our real price but still it looks like there is a lot of price dispersion there.

Interview

The interview went OK. One of the committee told me I did well on the formal panel interview section. I didn't crash and burn or anything bad in the presentation. I got lots of questions which were to the point or good and some people seemed interested. Another candidate still needs to be interviewed but the selection committee chair said they hope to make a decision within a couple of days. I've been having a hard time sleeping coming up to the interview. I slept each night but not so many hours. And tonight it seems even worse, though there is nothing I can do now so logically I should relax.

Flood :)

I was commenting last time that when it rains it pours. Yeah, well the people who asked me to submit my details in order to maybe spend 40 hours reviewing a report want me to do it. Deadline 19th April. Snork Maiden says maybe she can help.

I'm pretty much saying no to the offer to teach a class in the second half of the year because we want to travel to Europe then. I thought of teaching the second half of it but the other guy - the course originator is the only person who could teach the first half and he wants to avoid teaching anything this year and it doesn't look like collaborating in this way would work because of the integrated structure of the course would mean I have to teach exactly according to his material. The alternative is to run it like an intensive MBA style course in the second half of the semester. But I don't think that would be good for the students who are mostly doing this part-time or for someone teaching it for the first time.

I got some more info on my interview on Monday which if correct means this is pretty much mine to lose rather than win if you know what I mean. So I really need to focus on preparing over this weekend.

When it Rains it Pours

It looks like this will happen following a meeting and e-mails today. It's nominally about AUD 20k in funding. As I'm fending off offers to teach a course later this year...

Interview

Another interview coming up on Monday. I just heard this evening. This one is pretty much my dream job. Hopefully, I don't screw it up like the last one.

Hedge Fund Returns for February 2010

Results are now in for both Credit Suisse/Tremont and HFRI. HFRI gained 0.52% (HFRX monthly 0.26%) and Credit Suisse/Tremont 0.68%. Managed futures, macro, long-short equity all did well according to CS and dedicated short bias and equity market neutral lost money. According to HFRI short bias also lost money and quantitative directional and systematic diversified gained 2.06% and 1.04% respectively but they find that equity market neutral gained moderately. Other styles moved less than 1% for both index providers.

Nominated

The Australian government is nominating me as a candidate for participation in an international research organization in my field. Of course, all the other UN countries get to make nominations too. And they didn't pick me out of the blue. I submitted my name to the government department here. Of course I was in the right network to hear about the opportunity in the first place. It's not a paid position (your expenses are covered) but it can't hurt my CV (I think) and maybe could have an influence on policy. So that's good. It's much easier to get involved in these opportunities here than it was in the US. I did have some interactions there with the policy sphere but not as frequent. Partly it is because this is a smaller country, population wise and I am nearer the centre - geographically and institutionally. It's much easier to get a position in a top institution here than it is in the US. There is trade off - being second tier in a top country or first tier in a second tier country...

Class Matters

Some insights about class. In attitudes and circumstances I think I am on the border between the middle class and owning class. I try to be a non-conformist, think outside the box, and do something different, but in the end fall back on being an employee out of neccessity and lack of ability I guess to do some of these other things. I think the class structure in this article is too broad. There are "middle class" business owners with employees who don't have a high net worth and so aren't in the owning class as well as professionals and managers. And there is a difference between a self-employed professional and an employed professional in attitudes about government, taxes, regulation etc.

Some of the people around me find my relaxed attitude to my current situation rather puzzling. I don't tell them of course that we have more than $A200k in liquidish assets. I do tell them that we can live OK on one salary and while we want to have two salaries in the long-term there is no emergency at the moment.

The deeper question is why we've saved so much money outside of retirement accounts and why we live frugally when we could spend more when many (most?) people expand their spending to match their income. I think it is largely a result of learned attitudes (at least on my part) that relate to these class issues. It isn't so easy to do these things that many personal finance gurus and bloggers promote without deeply embedding the right attitudes, so it's no longer a question of discipline in keeping spending under control.

This isn't the whole story on this complex issue of course. You can see more of my posts on class here.

HFRX Daily Hedge Fund Index Performance for February 2010

Always the first of the hedge fund indices to report, the HFRX daily index reports a gain of 0.26% for February. January saw a loss of 0.02%, so we're still pretty much flat for the year. There were no large moves for any of the strategies. Macro, Equity MArket Neutral, and Systematic Diverisifed saw gains of over 1%. No strategy lost more than 1%.

Secondment?

I gave a presentation at a government department today, which they seemed to like and then the possibility of me being "seconded" to that department was raised. I don't have a first job, but there is a budget we have that hasn't been spent for secondment...

Follow on funding here now looks a lot less likely due to a change of priorities, but my colleague wants to try to give that a shot too (a proposal needs to be submitted, but first we'll ask if it has any chance).