Sunday, September 30, 2012

Will Close Roth IRA

I blogged a few days ago about Ameritrade dropping support for foreign investors. I got a reply from Interactive Brokers - they can't open a Roth IRA account for me and, therefore, I can't transfer that account from Ameritrade to them. So I will have to sell my investments (one mutual fund and one closed end fund) and transfer the money to my US bank account and from there to my regular brokerage account at IB. I have to pay taxes anyway on my Roth IRA account in Australia so it makes no difference as long as I live here how the account is structured. And this will be one less account to deal with.

Saturday, September 29, 2012

Snork Maiden's Taxes 2011-12 Edition

I've more or less finished Snork Maiden's tax return for this year (Australian tax year ends on 30th June) but I can't submit it till I do my tax return. This is because they need to know my income in order to compute the correct Medicare Levy (tax that supposedly funds health care). For households earning more than $A160k per year without private health insurance the rate is 2.5%. That includes us. I've thought of getting private health insurance but it doesn't seem to save much money in net and just sounds like an extra hassle. Maybe it's because I've never really understood how the Australian medical system works. I am still waiting for one final investment statement for last year before I can do my taxes. The deadline is 15th October.

Anyway, so here is Snork Maiden's summary for this year:

For comparison, here are last year's taxes. There have been some changes in categories reported on this year's tax return and some big changes in her deductions but otherwise there has been fairly minor increase. Real cash income rose by 2.98% and the tax rate rose from 22.12% to 23.58%. As a result, after tax income rose by only 1.05%.

Real net income takes out various tax credit and capital gains adjustments to get back to the real cash income rather than the taxable income.

Of course, not included here are all her superannuation (retirement) contributions, which add in another $22k pre tax. If we add that back in, income is above $96k and the tax rate is around 21.5%.

Tuesday, September 25, 2012

Transferring Money to China

Snork Maiden wants to give money to her parents in China to help them out with medical bills. I've been telling her that all I need is bank account details and I can transfer the money there either using our regular bank account or a service like Ozforex. She is also going to open a new bank account in China because she thinks her mother's account is up to the task of handling transfers or they can't get the necessary details. A Chinese colleague recommended using a company called Superforex instead. The set up is pretty weird - first you transfer the money to their account - then send them an e-mail with a scan of your transfer receipt and then they'll allocate the money to you to transfer on. Ozforex's rate is only 6.4353 Yuan per AUD while Superforex claim to offer 6.5685. Anyone heard of them?

Ameritrade No Longer Supports Foreign Customers?

I got a letter from TD Ameritrade saying they will no longer support customers in my country from 30th October. Either I need to open a new Roth IRA account with another institution and ask the new institution to transfer my account or I will need to liquidate my account. I have a brokerage account with Interactive Brokers but I suppose that I won't be able to open a new Roth IRA account as I'm not resident in the US. Anyone who has better information on this let me know, please. So, I'm guessing my best option is to just close the account. There are no net profits and there is no penalty for withdrawing your contributions. I have less than $10k in the account. PS - I just sent a "ticket" to IB asking this question.

Sunday, September 16, 2012

Rich or Poor?

Interesting set of profiles in the Guardian. For a comparison, we make around £150,000 a year and have £230,000 in savings. Professor married to a researcher. Our monthly rent is £1300. I think we feel rich until we go to look at houses to buy :) The mortgage on the kind of property we are looking at would be £3,000 a month (we now got pre-approved to borrow up to $A780k). We don't live rich apart from living in exactly the location we want to live in and paying the rent that that means. We have an eight year old Ford car for example.

Thursday, September 13, 2012


Yes, we are over $US700k in net worth after passing $US600k for the first time in February. Can't promise that it will hold up to the end of the month though!

Premier Banking

So, we've been looking at houses and find some of the sort we might be interested in are above our pre-approved borrowing limit. So, we tried to get the limit raised as we have been increasing the size of our deposit pretty rapidly. Turns out the guy we spoke with before is no longer working for the bank. So, we've now been referred to a relationship manager who works with the banks Premier Banking division. If you have more than $750k borrowed and/or in investments with the bank you qualify for this service. If and when we get a mortgage from the bank we will be in that category. So, I guess this makes sense. Anyway, one lesson is that it really matters who you bump into when you walk into the bank what kind of service you get directed to.

We just need to send the relationship manager our latest payslips and bank statement (from another bank) and he will see what he can do.

BTW it is 5 years to the day since we left the US and moved to Australia. We didn't arrive till the 15th.

Sunday, September 09, 2012

Three Bikes for Three Hundred Dollars

We went shopping for bikes with a couple of friends who are visiting our city for a few months. When we were at the store I decided to buy a bike too. Each of us ended up buying a bike for exactly $100. All second-hand of course. Mine is a Nakamura Cougar mountain bike - 21 speeds, old fashioned cantilever brakes, big knobby tires. Plan is to ride it to work which is 2 1/2 km and so is a bit far to walk both ways each day and seems a bit near to take the bus that only actually covers about half the distance, though that's what I've been doing. I have a road bike but keep it in our apartment and it has the wrong pedals for ordinary shoes and just seems like a hassle. This bike, I'll keep in the underground parking beneath our apartment building. And won't worry about bumping over kerbs and stuff. I couldn't find any pictures that are much like this bike, even though I think it is just a classic mountain bike.

It's the first bike I've bought since 1985! Yeah, there aren't many original parts on my road bike and that includes the frame.

Monday, September 03, 2012

Moominvalley August 2012 Report

Financially, things went OK again this month. We hit new net worth highs in both Australian and US Dollar terms of $A659k (+$33k) and $US681k (+22k). The Australian Dollar fell a little.

Our rate of return was only 0.78% in USD terms versus 2.22% for the MSCI and 2.25% for the S&P500. In Australian Dollar terms we made 2.61%. The monthly accounts look like this:

The monthly accounts (in US Dollars) show that we earned $20.2k in salaries etc. as this was a three pay month. Retirement contributions were $3.3k. We spent $5.0k but around $500 of that was implicit depreciation on our car and so actual spending was relatively low compared to recent months. Total investment returns were $5.1k but earnings would have been $15.4k without the changes in exchange rates.

Saturday, September 01, 2012

Moominhouse Fund Progress

The fund rose from $116k to $125k this month. Progress has been pretty steady since February:

This is actually just the cash in the bank account which we also pay our rent from. So that is why it also dips down. I think we need to get to $150k before we'll be in a position to bid for houses at auctions and have back up for contingencies. Well, at least for houses in the price range we seem to be targeting.