Get Your Credit Score

You can now get your credit score for free in Australia, something that has long been taken for granted in the US. My score was 998 which is in the excellent band, which ranges from 833 to 1200.

Moominvalley Monthly Report August 2014

The Australian Dollar rose a little this month to 93.43 US cents. The MSCI World Index rose 2.25%, the S&P 500 rose 4.00%, but the ASX200 rose only 0.62%. Our Australian Dollar performance was close to the latter gaining 0.58% (1.05% in US Dollar terms). All asset classes apart from private equity gained with Australian small cap and US stocks doing best. By the way, you can get an up to date asset allocation here.

Net worth rose $A19k to $1.266 million or $US22k to $US1.183 million. The monthly accounts (in AUD) follow:



This month there is a new column and row to take into account housing investment activities separately from spending or other investing. So costs incurred in the housing hunt will be accounted for here. We seem to be out of the race for the house I bidded on this weekend, but the search continues.

Current non-investment income (salary etc.) was  above normal at $15.7k due to some extra payments. Spending was $4.7k which is lower than average. We managed as a result to save $10.6k from non-investment income. We gained $6.9k on investments.

Auction Day

So today was the auction day for the house we were interested in buying. At this point we haven't bought it...

So we got a valuation that cost us $330 and they produced a value of $770k. But when we were meeting with the mortgage guy at the bank he said that the bank could do a valuation for $50 and if we go ahead with the purchase the fee will be waived as they do this as part of the loan approval process anyway. So we got that valuation too. The median of that appraisal was $800k with a range of $760k to $840k. So I went into the auction with an limit of around $860k in mind. The highest I got to bid was $850k and then the next bid was $865k. The auctioneer was not accepting smaller increments. As we were still below the reserve price I then decided not to push the price higher on the gamble that the owner wouldn't accept this higher bidder's offer and the house will return to market with a listed price. It turns out that the owner's reserve price was $970k but they are willing to go down to $950k but the other bidder would only go up to $870k. So, I expect the house will either be listed now at $950k or taken off the market and the owner will try again at the beginning of 2015 just before the current tenancy concludes.

Independent Valuers

So, we are thinking of getting a valuation on the house. The price of this service varies widely. These local guys charge $330. Herron Todd White - "the largest valuer in Australia" - charges $660. Is this a case where it makes sense to go with the cheaper service or is there some extra quality or service that is worth paying double for?

Gearing Up for Housebuying Again

So, this weekend we went to see several houses in different parts of the city. We are following up in more detail on the one in the picture. The location is convenient to public transport with a position on top of a hill looking out over trees to a mountain - you could almost be out in the bush, apart from the traffic noise at the back of the house. It is the most expensive block in this suburb though it has been subdivided in two in what is called here a dual occupancy. The remaining block is still just over 1000 square metres. The house looks best from the street side, as in the picture. Inside is another story and there may be some structural issues with foundations at the back. The house has been rented presumably to students at my university for the last 20 years. Current rent is $570 a week. But that is only one of the two apartments the property is divided into. The apartment is rented till early next year though the second apartment is unoccupied. I think the price has to be over $700k as the land value is at least $550k. Auction is at the end of the month.

I have a previous history with this house. Fifteen years ago my girlfriend lived there, though we weren't together very long and I didn't visit that many times as a result. It was strange to come back again now. Looks like they didn't do any renovation in all that time apart from redesigning the front garden.

Snork Maiden talked to a colleague to see if they can recommend a builder to assess the potential renovation. Turns out the people who live in the second house on the block are friends of her colleague whose children go to the same school as his children.

Monthly Spending

The graph shows our monthly spending each month since moving to Australia. I've taken out some business related expenditures that get refunded - so this is the same as the core expenditure I report in my monthly reports. You can see that the first year we were frugal and expenditure stuck around or just under the $A4,000 per month level. After that there are lots of spikes associated with travel and other larger expenditures and gradually the average has moved up to about $A6,000 a month currently. Note that $A2,150 a month is our rent. All the numbers are nominal, not adjusted for inflation.

Moominvalley July 2014 Report

Another monthly report... Much of this month was spent travelling and then catching up on work when I got back. I don't post here much because I don't do much trading or make many new investments nowadays. And I put most of my blogging effort into my professional blog. So there are mostly only these monthly reports, reports on tax returns, and occasional new investments etc. Of course we are investing plenty of money into funds and stocks we already own trying to keep in line with our diversified strategy.

The Australian Dollar fell a little this month to 93 US cents. The MSCI World Index fell 1.18%, the S&P 500 fell 1.37%, but the ASX200 rose 4.40%. We gained 1.74% in US Dollar terms and 3.15% in Australian Dollar terms. So we didn't beat the Australian stock market but did much better than the world markets. Net worth rose $A56k to $1.247 million or $US37k to $US1.160 million. The monthly accounts (in AUD) follow:

Other income is non-investment income. It was far above normal this month at $27.9k as we got three salary payments this month and there were refunds and rpepayments for business travel spending. Spending was $9.3k with $6.6k of that not refundable. That's not bad considering that both of us were traveling internationally for part of the month. We managed as a result to save $18.7k from non-investment income. We gained $37.5k on investments with $6.8k of that contributed by foreign exchange gains.

Moomin Valley Monthly Report June 2014

A belated monthly report. As June is the end of the financial year for tax purposes in Australia a lot of data only comes in a few weeks after the end of the month and so the June report is usually delayed. The Australian Dollar rose just over a US cent this month. The MSCI World Index rose 1.93%, the S&P 500, 2.07, and the ASX200 lost 2.22%. We gained 0.82% in US Dollar terms but lost 0.59% in Australian Dollar terms. So we beat the Australian stock market but not the world markets. Net worth rose $A7k to $1.189 million or $US22k to $US1.121 million. The monthly accounts (in AUD)follow:

Other income is non-investment income. It was above normal this month at $19.9k as refunds for business travel spending continued to come in. Spending was $7,593 with $6,345 of that not refundable. That's not bad considering that both of us were traveling internationally for part of the month. We managed as a result to save $12k from non-investment income after dis-saving last month. Spending so far this year is $54k in total compared to $49k last year. Core spending is actually down from $44k to $41k. I expect less spending in the second half of the year unless we finally buy a house or something like that.

We lost $7k on investments. Tax credits on non-retirement accounts (the main delayed item) were $2,396. This year's total tax credits are at a record level:

Despite this, my preliminary tax calculation for this year is showing me owing about $300 (after already pay $50k in taxes) and I suspect that Snork Maiden will also owe extra tax though I haven't calculated her tax return yet at all.

Moomin Valley Monthly Report May 2014

The Australian Dollar barely changed this month. The MSCI World Index rose 2.21%, the S&P 500, 2.35%, and the ASX200 0.68%. We gained 1.73% in US Dollar terms or 1.57% in Australian Dollar terms. So we beat the Australian stock market but not the world markets. Net worth rose $A19k to $1.182 million or $US19k to $US1.099 million. The monthly accounts (in AUD now) follow:

Other income is non-investment income. It was above normal this month at $18.3k as refunds for business travel spending began to come in. Starting in two weeks, I will be travelling around the world, first stop is New York City. Spending as a result was at a record level of $19.1k. But "only" $12.0k of that was "core expenditure". Refunds should cover the other $7k eventually. Last year core spending hit $14k in May. As a result we dissaved from regular income (-$0.8k).  We gained $18.2k on investments. The asset class that did best this month was hedge funds at 4.64%, followed by private equity at 2.9% and commodities at 2.11%. All asset classes gained. The worst was Australian small caps at 0.12%.

You can track our net worth gain and some asset class breakdown on NetWorthIQ. It's interesting to look back at the picture 10 years ago.

Man 3 Eclipse Update

Back in 2008 I invested in a capital guaranteed managed futures fund called Man 3 Eclipse. This didn't turn out to be a great investment but it wasn't that disastrous either. However, other investors it seems have not been impressed by the fund's underperformance and have redeemed their shares. As the fund got smaller, late last year the directors decided to stop investing in active investment strategies and switch to 100% deposits in Australian Dollars. The fund was issued for a fixed period  maturing on 29 April 2016. A feature of the fund was a ratchet that locked in profits under some conditions. Currently the value at maturity is guaranteed to be at least $1.0554 for every dollar invested. The actual net asset value per share is $1.0414.If we assume that the fund will earn 2% per annum from now on then the value at maturity will be about $1.08. But my understanding is that if you redeem shares early then you only get $1. So this is a guaranteed 4% rate of return per year assuming they can earn 2%. The main negative possibility is that fees chew up the interest yield. If they do then we still get back at least $1.0554. Based on that I will keep my money in the fund. It's only $8,000 anyway...

So far, my investment in the Winton Global Alpha fund is much more successful. It's up about 5% since I invested.

New Investment

A new investment - Cadence Capital Limited - another Australian listed investment company that basically runs a hedge fund in listed structure. They have long and short investments, potentially leverage or net cash, performance fees - all the standard hedge fund features. And it is exchange traded and pays franked dividends... They use a combination of fundamental and technical analysis. Currently the fund is selling for slightly less than net asset value but has performed very well in the past. It has strongly outperformed the Australian index even after fees. Initial position is 10,000 shares, but imagine that will increase over time. I estimate alpha relative to the ASX 200 of 9.43%, which is really high. Beta is 0.75.

Moomin Valley Monthly Report April 2014

I was just thinking this morning that we need to increase net worth by $3,000 each month now just to compensate for inflation. 

The Australian Dollar was pretty stable this month. The MSCI World Index rose 1.00%, the S&P 500, 0.74%, and the ASX200 1.77%. We gained 0.89% in US Dollar terms or 0.80% in Australian Dollar terms. So we beat the world markets but not the Australian stock market. Net worth rose $15k to $1.163 million in Australian Dollars or $US15k to $US1.080 million. The monthly accounts (in AUD now) follow:

Other income is income not from investments or retirement contributions. It was normal this month at $13.5k. Spending was very high this month at $9.8k but after adjustments it was an average $5.8k. We saved only $3.7k from regular income. 

We gained $9.2k on investments. The asset class that did best this month was real estate and the worst private equity.