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. 

 

Moominmama Redundancy

I don't think I have mentioned that Moominmama is being made redundant. This is a compulsory process. 150 people are being cut from her division. Currently, we are in the notional internal redeployment period, but all the opportunities they send her are not relevant to her skills. So, it looks like she will reach the end of the track at the end of this month. After that, their process has a fast track and slow track. You can quit within a week, or stay another 8 weeks. The fast track pays a bit extra money and we get to use the redundancy package of around $100k faster. So, I am encouraging her to take the fast track. Work in her position is project based and she hasn't been assigned to any project, so I don't see a reason to stay on the slow track, which might make sense for someone who is handing over to other people.

She is 51 years old, so unlike me, she is not retiring. We'll see what she wants to do. We should be able to handle it financially. At our current rate of spending, our required annual dis-saving rate rises to about 2.3% from below 2%.

Progress on Pension Restart

Unisuper restarted my pension with $823k. I was now looking to restart my SMSF pension with $1.2 million to reach the full transfer balance cap I am allowed. But I noticed in the weekly email from the Sydney Morning Herald–"Real Money"–that there could be a problem in contributing to a super fund and making withdrawals in the same year, if you want to claim a tax deduction for the contribution. I just contributed $32,500, that I was planning to claim on my 2026-27 tax returns. Now if I move money from the accumulation account, which this was contributed to, to a new pension account, I will end up distributing some of this money back to myself as a pension this year. So, I asked my fund administrator, SuperGuardian, if this would be a problem. If it is, maybe I need to take it out again first, if not, we can go ahead with restarting the pension.

Another 1/4 Million Shares

I bought another 1/4 million shares and am now up to 1.75 million shares of URF. I forgot to mention that if you wait to get distributions from the fund, you probably won't pay any tax. If you sell before, you'll have to pay capital gains tax. There shouldn't be any tax because this fund has a disastrous history and so all distributions are returns of capital. My initial investment was at 80 cents per share, which was already a lot below the IPO price, and we haven't received 65 cents of distributions since then 😀.  I'm up to 4% of net worth in this fund, maybe I should stop accumulating.

Increased URF Position to 1.5 million shares

I bought another 500k shares of the US residential property fund, URF.AX. They have sold almost all the portfolio and most of the remaining stock is under contract or attorney review. The NAV is 18.5 cents a share and today's price is 16 cents. The Australian Dollar would need to rise to 80 US cents for the profit to be wiped out. I doubt that will happen by the end of the year.

My first purchase of URF shares was just 10,000 shares in August 2019.

My internal rate of return is now 9.5%. In the best case scenario, this will rise to 13.3% by December and the position will gain AUD 37.5k in value.

Bitcoin and URF

After paying off most of my margin loan, I decided to redraw about half to buy 1/2 million shares in URF (US residential property fund listed on ASX). I already held that number in the SMSF, so I am doubling the position. The managers are in the final stages of selling down the portfolio, but the share price is still below the NAV, which already takes sales costs into account. The main thing that can go wrong is that the Australian Dollar could rise sharply, reducing the NAV in AUD terms, but I think this is a quite safe bet that should beat the margin interest I need to pay for the net 6 months or so till they wrap up.

I also bought 30% of a bitcoin in shares of the IBTC ETF listed on the ASX. Didi Taihuttu is saying to dollar cost average in and so that's what I am doing. 

Restarting My Unisuper Pension

I put in a request to restart my Unisuper (industry/employer superannuation) account based pension with a larger number. The idea is to hit the total of $2.023 million between Unisuper and our SMSF, which is my transfer balance cap. The advantage is to pay less superannuation tax, the downside is that the money gets paid out of superannuation into the taxable environment. 

Originally, I started a TTR pension with $600k. But as I have made additional superannuation contributions in the meantime, the accumulation account has been growing. Because all of the existing pension is rolled over into the new account and investment values change daily and you need to specify exactly how much to transfer from accumulation, it is hard to hit a precise number, but I also added a note that I wanted to reach $823k. Then I can restart the SMSF pension with a round $1.2 million. But no big deal, I can always start with a not round number. I now have all the $97.5k contributions for this year in the SMSF. 

You can see the effect of the new superannuation contributions in this graph. There is a jump in cumulative superannuation contributions and a reduction in current savings. The big spike in current savings was the redundancy payment. Superannuation profits are at a new high, while current accounts remain depressed mainly because of gold exposure.

Buying a New (Used) Car

We bought our car back in 2007. It was built in 2004 and so is older than this blog. At the last service, the mechanic said that there are some expensive repairs coming up. So, we decided to buy a new car.  I didn't trust buying an electric car at this stage of the evolution of that technology. I especially wouldn't buy a second hand electric car. Wanting to reduce our carbon emissions we decided to get a hybrid. We test drove three different Toyota models: Kluger, RAV4, and Camry. It turns out there is more legroom in a Camry than in a RAV4! Kluger seemed a bit big. Today, we test drove the (white as in the photo above) Camry and decided to buy it. It's similar to our old Ford Falcon, but 20 years newer and being a hybrid, uses about 1/3 of the fuel. Price is $34.5k vs. the $16,750 we paid for the Falcon in 2007. With 67% inflation in Australia since then, $16,750 would be $28k today. Back then, we thought Toyota was too expensive. We only got $500 for the old car from the dealer. Their argument is that it will need a lot of work to be saleable, which is true, and why we are getting rid of it.

BTW, the car is worth about 1/2 percent of net worth. No where near the 5% cap suggested by Financial Samurai. 

Restructure in Progress

Part way through the restructure. I have now sold 60 ounces of gold from the PMGOLD ETF (6,000 shares). I still have 6,000 shares. I have bought a QO mini gold futures contract (50 ounces) in the SMSF and am in the process of moving $97,500 from our offset account to the SMSF. I have also bought another 30k shares of the L1 Gold Fund (LGF.AX) in my own name and have withdrawn $50k from my CommSec margin account back to the offset account with more to come.

Large Distribution from Macquarie Winton Global Alpha

I didn't realise, but the Winton Global Alpha Fund (managed futures) rose 22% this Australian Financial Year. And then on 30 June they paid out most of the gain as a distribution. Almost AUD 36k for us! On the spot, I decided to reinvest AUD 20k. The fund has been doing well, so, we don't really want to greatly reduce our position. On the other hand, it might make sense to take some chips off the table, and eventually we need cash. But this is enough to pay my current SMSF pension for almost 11 months... So, keeping a 7% yield and reinvesting the rest sounded about right. This fund is in the SMSF because of its propensity for big non-tax advantaged payouts like this. 

New Transfer Balance Caps

From 1 July the ATO is raising the transfer balance cap for superannuation to $2.1 million. This is the maximum amount of money that you can transfer into a tax-free pension account. There is a twist (as everything about superannuation is unnecessarily complicated). If you already started a tax-free pension, you only get a partial increase in your personal cap. ATO has already posted these new caps in MyGov. Mine is $2.023 million, up from $2 million. My total superannuation balance was already about $2k over that on 30 June. Despite that, I am contributing more money to superannuation. This is because the capital gains rate on the money that will have to remain in my "accumulation account" will be only 10% vs. a 32% minimum going forward outside superannuation. Even if my superannuation eventually exceeded $3 million, the capital gains rate will only be 20% on the returns attributed to the portion of the account above $3 million.

How much can I contribute? You can only make non-concessional contributions if your total superannuation balance is below the general transfer balance cap of $2.1 million. Your personal cap doesn't matter for this! If you have more than $1.97 million in super as of 30 June this year but less than $2.1 million, you can contribute up to $130k. But, if you already used the "bring forward rule" in the previous financial year, this is reduced to $120k. I already used $55k of that amount last year, so I can contribute $65k in non-concessional contributions plus $32.5k in concessional contributions this year. If my total balance is over $2.1 million at the end of this financial year (30 June 2027), I won't be able to make any non-concessional contributions after that.

June 2026 Report

The Australian Dollar fell from USD 0.7185 to USD 0.6909 and gold fell steeply. International stock markets lost a little and the Australian market still managed to underperform in USD terms, though it gained in AUD terms. The following results are preliminary–we won't get venture and art results for a while.

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

US Dollar Indices

MSCI World Index (gross): -0.77%

S&P 500: -0.95%

HFRI Hedge Fund Index (forecast): -0.16%

Australian Dollar Benchmarks

ASX 200: 0.73%

Target Portfolio (forecast, depends on HFRI): -0.03%

Australian 60/40 benchmark: 1.36%

In Australian Dollar terms we gained 0.51% and in US Dollar terms we lost 3.35%. The only benchmark we outperformed was the target portfolio. The SMSF also underperformed, losing 0.67% while Unisuper gained 2.05% and PSS(AP) 2.23%. Why did the target portfolio have weak performance this month? Gold detracted 0.82% of return and venture capital 0.84%. If we add those two back, the return would be 1.63%, which is between the ASX 200 and MSCI (AUD) returns. We outperformed the target largely due to not experiencing those negative venture returns.

Australian superannuation funds report performance for the Australian financial year which ends on 30 June. For this period, the SMSF gained 12.2% (pretax), Unisuper, 8.9%, and PSS(AP) 11.3% (estimated pretax). So, we beat both benchmarks.

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. Gold and futures lost a lot and private equity a little. All other asset classes gained with rest of world stocks having the highest return and Australian large cap, hedge funds, and US stocks each contributing about a quarter of a percent of returns.

There was a lot of dispersion of returns, with lots of big winners and big losers. Things that worked well this month:

• Eight investments made AUD 10k or more: L1 Global Long-Short (GLS.AX, 49k), Acadian Global Long-Short (24k), Unsiuper (17k), 3i (III.L, 16k), Regal Investment Fund (RF1.AX, 14k), PSS(AP) (11k), Regal Partners (RPL.AX, 10k), and WCM Global Quality Active ETF (WCMQ.AX, 10k).

What really didn't work:

• Five investments lost more than AUD 10k: Gold (-59k), Pershing Square Holdings (PSH.L, -40k), Australian Dollar Futures (-30k), Pengana Private Equity (PE1.AX, -22k), Tribeca Global Resources (TGF.AX, -22k).

Our distance from our target allocation increased a little. 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. We also make monthly concessional contributions to Moominmama's superannuation to reach the annual cap on contributions. 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 5,150 per month. I made the following other moves this month:

• I did invest in five new startups via Angellist! So, I was busy reading all the investment memos and pitch decks of companies I didn't end up investing. One of the startups is a secondary sale of Polymarkets shares, which is a private company, but beyond the startup phase.
•  I sold 10k Regal Investment Fund (RF1.AX) shares and bought 20k Pengana Private Equity (PE1.AX) shares, which were undervalued after the SpaceX IPO. SpaceX is their biggest holding. My theory, is that people investing in Pengana's new AI fund, may have been sellling their PE1 shares.
• I bought 1k shares in Metrics Opportunities (MOT.AX)–a listed private credit fund. 
• I bought 17.5k shares of Treasury Wine Estates (TWE.AX). 
• I sold 50 Berkshire Hathaway shares and 1,000 ASX 200 ETF (IOZ.AX) shares to fund it. 
• I bought 30k shares of the L1 Gold Fund (LFG.AX). 
• I added to some of my trading positions at Masterworks after another painting realization.
• I bought a few additional shares of one of the NDIS properties I am invested in at Assetora using accumulated investment income there. 

As you can see, while we have so much cash in our offset account, I am tending to still reinvest some of our investment income.

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

Other income includes Moominmama's salary and employer superannuation contributions but also the tax paid by the SMSF. Other retirement number is negative this month because I submitted a  "Notice of Intent" to claim a tax deduction to Moominmama's employer super fund, which triggered 15% tax on the $22.5k of voluntary contributions I had made this year to it. Moominmama bought a new laptop for $2197, which her employer reimbursed–it is counted both in other income and spending. So, spending was a bit higher this month. This number does not include our mortgage payments, which are regarded here as saving and investment costs. Dissaving amounted to $8k, which is way within the 4% rule limit of AUD 23k. We gained $35k investing, mostly from retirement accounts and all because of the fall in the Australian Dollar. We got an estimated $8k 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. As a result of all this, net worth rose by AUD 19k to AUD 8.246 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. Other income is non-investment income including salaries, employer superannuation contributions, net tax returns 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.

Starting the Big Restructure

I have started restructuring our portfolio in response to the new tax laws. The first step is to make contributions to our SMSF's Interactive Brokers account. I plan to use up all the available contributions. The step after that will be to sell shares in the PMGOLD gold ETF at CommSec and then transfer some of that money back to our offset account to replace the contributions to the SMSF. We'll then buy a futures contract in the SMSF, reduce our margin loan at CommSec, which has a very high interest rate, and also make some new investments. This first stage will only sell less than half of our gold. 

2026-27 Pension Payments and Contribution Limits

If you have a tax free superannuation pension in Australia, you must make minimum pension distributions each tax year in order to maintain the tax free status. Between ages 60 and 65, you need to pay out 4% per year.

In 2025-26 I paid out $3,150 a month from my SMSF pension account and $2,000 a month from my Unisuper pension account. The SMSF returned about 12.5% for the year, so that should be the increase in the value of the pension account before taking into account the pension payments I made. I am estimating I need to pay $3,400 a month this year. I won't know for sure till near the end of the financial year, when SuperGuardian have completed the accounts for 2025-26 (the deadline for submitting a tax return is much later for SMSFs than for individuals). I might need to make an extra payment then. 

I could reduce the Unisuper payments a little. However, HSBC require me to deposit $2,000 per month in my account to get 2% cashback on tapped payments. I think this tax free $120 or so is worth it (purchases over $100 don't get cashback) for paying out an extra $900 for the year. 

In any case, I can still recontribute this money. Because my 30 June 2026 total superannuation balance is less than the new $2.1 million transfer balance cap, I can still make non-concessional contributions this year. I already brought some forward to 2025-26 and so the limit remaining is $65k. I can still make concessional contributions up to age 67. The annual cap is now $32,500. So, I can make $97.5k in super contributions this year.

 

Cheque from the British Government

So, I made this year's U.K. state pension contribution. Today I found this in my mail:

A paper cheque from the British government! They write: "Our records show that a refund/payment is due and a cheque for the sum of £15.25 is attached below." I don't have a British bank account anymore, and Commonwealth Bank here will no longer process foreign cheques. They haven't since 2022. Cheques are being phased out in Australia, anyway. When they did used to process foreign cheques, I imagine it would have cost at least AUD 25 to do it. I can't see why the UK government don't just credit this towards my next year of contributions.