Tuesday, November 18, 2014

Financial Planning for Teenagers

I have been watching on the sidelines as the young  family teenager navigates her way into adulthood.  Getting a driver's license, enrolling to vote, being able to go out and live
an exciting adult life.  It is what all youngsters dream of, isn't it?

The trick about parenting is making sure that you set up your children with all the skills they need to navigate the world with.  It is certainly my approach with my own child.  I guess I am super aware of how hard life can be when you don't have a parent there to guide you.  I try and make sure that my child has a strong sense of self, is confident, well balanced and grounded.  I want her to be able to navigate life, independently, and my approach to parenting is designed to support this concept.

Back to the teenager.  She has a personal loan for a car, and a trail of part time jobs.  The neighbour up the road regularly drops in mail from when they used to live in our street, many years ago.  I hear whispers that income tax returns are not being lodged, so I made some attempts at helping to steer from afar.  After all these have gone unheard, I bluntly said bring all your stuff here and I will sort you out.

There was relief from the niece as she arrived with a shopping bag of stuff!  So I have been spending some random moments of spare time trying to assemble a financial plan for this disaster!  Turns out that mail arrives from companies, some is opened, some is not.  The reader doesn't understand the contents, or care to.  I suspect there are many reasons, age appropriate ones of this stuff is not that important to me right now, and others like OMG what is this even saying, do I need to keep this, and URGH maybe I will look at this later.

There are many bank accounts, many superannuation policies, and many attempts by many people to try and get something happening from their correspondence.  But the sad end result is that this lack of life skills is actually impacting on the financial future of the individual concerned.  It is frankly quite scary to be watching unfold.

Every few days I send a nag email.  It is like a virtual nag note!  They are little emails with instructions on who to ring, what to ask for etc.  Slowly I will start to build some confidence and understanding about what one should be doing here.  Once we have some basics, a darn good clean up of accounts and some organisation about what to do, and who to ask if you don't know, maybe we can start to get a financial plan happening.

Friday, November 14, 2014

Replacing Vehicles

As I was posting up an article a few moments ago,  this image appeared at the bottom of one of the blogs;

My partner is going through the process of replacing the family car.  Coincidentally, both our vehicles are the same vintage, with about the same mileage on the clocks.  I have been procrastinating about replacing mine for many kilometres!  I had intended to do it a couple of financial years ago.  I see the transaction pop up in Microsoft Money, and I simply push it out another 12 months. 

I really like my vehicle, but as I contemplate the arrival of a new vehicle, it reminds me that I am due for a service, I have an oil leak, the scratch cannot be fixed without respraying the whole door, and a kid scootered down the other side leaving a nice scratch, and did I mention that my blue tooth connection for the phone is also not working?  Seems like a car destined for replacing now doesn't it.

I would love to replace it with the black Range Rover Evoque pictured above.  But the image on the other side talks about business plan strategy!  The accountant says return when you earn $400k or before if one of the other requirements arises.  $400k is hard work and long hours, and frankly not what this Gen X with a mantra of 'Balance' is going to be undertaking.  In deciding how much income is enough, I reverted to my trusty series of spreadsheets.  The retirement planning spreadsheet says I am about a year ahead of my progress goal.  The mortgage spreadsheet says I am six months ahead...BUT...it says that next year that I will revert to being on track, and behind if I do not pull my finger out by the end of the year!

Behind, big frown.  It did make me look at an income tracking spreadsheet.  Things are not as easy with fluctuating incomes streams over multiple clients!  Also, contracting doesn't come with annual leave or sick leave. Despite what you may think, this is an absolute positive.  I control how much I work, and this year I have had more time off than I normally would, absolutely guilt free, and I enjoyed every minute of it.  On one occasion I worked from the resort for a few hours before the family headed out for Thai overlooking the water.  The next morning the adults headed out for a run beside the beach.  It's the control over life that I am enjoying most about consulting and contracting.

Back to the car.  If I replace it now and buy the lovely vehicle my heart desires, then next year I am frantically working my arse off to pay for it and still achieve the financial goals, or I move out the milestone.  But if the milestone moves, then so will the following one.  The one after the mortgage is the retirement plan to the beach.  I want to be able to trek up and enjoy it on weekends whilst the kids are finishing school, then work on more time at the beach and less time working!  The pull to that goal is stronger than the one to the new car.

After $1,000 the car is serviced, and all three oil leaks found have been fixed.  The scratch I can live with for now, and the phone is annoying, but I will get BMW to take a look at that one in the not too distant future.  I may even go and get the car all detailed, just as a special treat for seeing in the New Year :-).

Create Company Update # 1

The visit with the accountant was an interesting event.  Even more so when he didn't charge me for the hour long chat.  It turns out that the benefits of creating a company are not as impressive as one would think.  Here are some of the considerations of forking out the $2-3K to kick things off;
  • a low income spouse that I want to funnel money to
  • kids at uni that could do with some cash, almost tax free
  • annual income above $400K
  • the companies I am working with demand that I have my own company
  • I want to provide the illusion that I am bigger than I am
  • I directly employ staff
Increasing income to $400K, that was an interesting concept.  My partner was surprised to hear that I may be considering starting my own company.  'Aren't they long hours and hard work?'  Nah, I respond with, I think it will be ok.  Squinting at the $400K mark, yes, I do think that would be long hours and hard work! 
Thoughts of venturing out on my own are not for capitalist reasons, it is the being more flexible with hours and jobs, to work more autonomously without the influence of some self serving higher manager, or corporate politics.  After all, if you cannot find what you are looking for, then create it, that is my approach!
So an interim step feels like a good approach.  Sole trader for now, register the business name and progress onwards with marketing and website etc.  Create the illusion of bigger, whilst trying to avoid the complex company structure on the back end, at least until I need staff or income is above $400K.  Has the basis of a good business plan.

Rear Fencing Project - Completed!

This project took a little time, but that was nothing to do with procrastination on my behalf.  we all love the tradies!  Actually, there is still a number of rather large dirt piles that need to be levelled off, but that was last month, last week, this weekend, or maybe sometime next year!
It looks like we have built an Indian cricket pitch which may need a little rolling to take the weirdness of the bounce.

They also manage to find a little left over stump from my previous years of wood cutting.  It is really lovely of them to place it in a prime place of position, hoping that it will become some sort of garden feature.



House Painting Update # 2

Mid year update on the house painting progress for the year was fairly uninspiring.

It turns out the hardest part was picking the darn colour.  I painted the side of the house that no one sees, as a trial before you embarrass your self to the neighbourhood.  Worked well, the more I painted, the more I enjoyed the colour.
So now I am around the back, over the deck and onto the third side.  Actually, a bit of one side and then a bit of the front.  Turns out the afternoon sun is a scorcher, so I had to dash to the front of the yard for some cooler temperatures.  This of course means I have now started to show the neighbourhood that a new colour is coming to the pink (aka so not terracotta Mr Builder) palace!

Random Ingredients - Figs

My sister was found of a fig and cranberry ball recipe.  I would have to say that it surely wasn't my favourite.  Of course now as I am cleaning and organising cupboards, post her return home, I found a stash of figs!

Taste.com.au, please help me....

Now the really interesting thing is the roasting of hazelnuts in the microwave.  Just pop them in an oven bag and shake every minute.  The kitchen was soon wafting in roasted hazelnuts!  I did sneak one just to try before I popped the rest of them into the mixture, they..I mean..it..tasted delicious.  Off to the fridge with the slice, and I shall see later if I rate it better than the fig and cranberry number my sister keeps trotting out.

Regrettably, I still have figs left over, so I will have to search out another recipe.

Thursday, November 13, 2014

Nearly an Accident!

Each week there is a public speaking requirement for class.  On a recent prep session we decided to teach the class how to make Play-Doh.  After a test run at home to make sure it would work when being done in five minutes by a child with no parental supervision, I set about writing up the instructions.....

Needless to say whilst you do need one of these, you can actually get by without using it in the recipe!  It is actually much safer to mix it all up in a BOWL.  I am sure that would have made an interesting discussion in the year 3 class room.

Tuesday, November 4, 2014

New Goal - Create Company

Over the past 8 months I have been doing a range contracting and consulting roles.  I am often asked by recruiting companies about my company details.  After some consideration, I thought I might explore the option a little further.  I am trekking off to visit an accountant today, and a lawyer later in the week to review options and solicit some guidance.

The one great thing about not being 120% busy every minute of every business day and often many hours outside of this, you have time to embrace your entreprenurial side.  Throughout the ages I have often thought it would be great to run your own company, be your own boss, and not at the whims of bad managers who often have terrible self serving interests rather than great vision and strategic direction.  I regular read snippets of media documents from Ramit Sethi, the founder of 'I will teach you to be rich', renowned author, blogger and financial guru.  I have yet to actually undertake one of his courses, but many of his emails talk about the procrastination of people, often linked to their self imposed restrictions about 'finding an idea'.  I also had been struggling with the 'idea'.

So I now see a potential opportunity on the path ahead, but I need to align a few things to potentially bring the concept to fruition.  The good news is that both existing clients are keen for extensions that carry on for the next six months of next year, and both are flexible in terms of hours, locations etc which is an excellent starting position to be in.  I am not in need of raising capital or finding my first client which is fantastic, and the thought of starting something new and building it up, is providing a little spring for my step.

Goal 41. Catch Barramundi

The 65 year plan was crafted over twenty years ago, but this goal was one of the earlier ones added to the plan.  Unlike other goals, it was actually trickier to achieve, which makes it all the more enjoyable to tick off the list.  So here it is, my first...ok...only barramundi which has been safely landed on the shore.

p.s. - no animals were harmed in the taking of this photo, and said barra is now back swimming with his/her mates in the pond behind me :-)