Where's my million?

I think we'd all be pretty thrilled to have a million dollars. The current minimum wage is $672.70p/week before tax, according to http://www.mywage.org/australia/main/salary/minimum-wage. On a minimum wage it would take you 30 years to earn that million. If you could somehow invest 100% of your income, compounded at 7% it would take 16 years to turn $672 a week into a million. So just on paper, we're all 16 years away from being millionaire. Woohoo.



Of course, every dollar spent on food, housing, good beer and good times cuts into that future million. So I got to wondering, how much do my purchases take out of my million?

A daily coffee is worth $4. after 10 years, that compounds out to $21,059, that's 2% of my million right there. My mortgage is $200 a week, so it's costing me $225,010 in ten years, or 22.5% of my future million. Groceries at $200 a week are month are $34,617 and 3.5%. Water bills are $800p/a, $11,539, 1.15%.

Obviously I can't stop spending on these things. I signed a contract with the bank for my mortgage. My body needs fuel. People I work with appreciate it when I shower. And coffee is a necessity for interacting with other people. But it was really interesting to plug in my budget and realising that over 10 years it was going to cost me $576,950.

I'm definitely not going to jump up and down and insist that I cut every expense down to the bone so that I can get closer to my future million. But I enjoy the changed perspective. I used to have a spending issue on $5 Steam games. The cheap gimmicky ones that are probably available for free on my phone. I used to justify it to myself by pointing out that it only $5. But after realising I'd spent close to $100 in a couple of months on games that I wasn't playing I got a bit frustrated with myself. An average $50 a month quickly became $600 a year that wasn't improving my life. Most of these games I would zone out because they were gimmicky casual games. Or I wouldn't finish them. I was essentially spending $600 a year for a few minutes of entertainment.

So I started matching all my Steam spending with payments to myself. Every $10 on a game is matched with a $10 contribution to my investments. I started spending less on games, and when I did spend on them I thought my purchases through a lot more.

I might not be putting aside a million just from stopping purchasing games, but I'm happy to have stopped mindlessly spending. If you'd like to take a crack yourself and see how much of a million your're spending, or could start saving, try out the calculator below.

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Item Description	Cost	Frequency	Annual Spend	Ten Year	Percentage
		Daily Weekly Fortnightly Monthly Annually
		Daily Weekly Fortnightly Monthly Annually
		Totals

Where's my million?

I think we'd all be pretty thrilled to have a million dollars. The current minimum wage is $672.70p/week before tax, according to http://www.mywage.org/australia/main/salary/minimum-wage. On a minimum wage it would take you 30 years to earn that million. If you could somehow invest 100% of your income, compounded at 7% it would take 16 years to turn $672 a week into a million. So just on paper, we're all 16 years away from being millionaire. Woohoo.

I made a calculator

Inspired by Aussie Firebug's early retirement spreadsheet, and my own frustrations with excel, I made a calculator with Javascript.
Most American FI calculators work on a single value, because their tax system includes 401ks and Roth IRAs and a bunch of other things I don't quite understand, but are quite similar to the Australian Superannuation system. The difference between Australia and America is that they have legitimate methods to withdraw from their Super, with or without penalties. In Australia we cannot touch our Super unless we're in some serious financial strife. And honestly, no one wants to plan their retirement on the basis of "If I declare myself broke I can crack open the Superannuation piggybank". The Australian government will make you burn through all your accessible assets before they let you.

As for why you would bother investing in Superannuation if you intend to retire before preservation age, it all comes down to taxes. You can salary sacrifice into your Superannuation account before taxes - so if you make $1,000 a week (a nice round number for doing maths with) then you would be paying $162 tax. If you could salary sacrifice half of your income, then you're only paying a measly $28. By placing half your income into your Superannuation, you get to 'take home' $972 a week, as opposed to $838. (Numbers using the 2015-16 income tax rates from the ATO simple tax calculator.)

Admittedly there are a few other complicated bits and pieces behind that (you pay 15% tax on everything in your Super account) but it's a big savings. The obvious problem is that you can't access that money until 65. Hence why Australian's need to consider both their Super account, and their accessible portfolios when doing the calculations on what they need for retirement. The total required in your portfolio doesn't change by a significant amount, but what you save on taxes is the kicker.

I'm still not thrilled with how this calculator looks visually, but all the calculations behind it are quite nice. In a nutshell, once you've entered you current age, the age you can access your super and your annual spend you'll be able to see exactly how much money you would need if you wanted to retire tomorrow.

The blue column is your Superannuation balance, the red is your accessible (and heavily taxable) portfolio. Hover over any column for more details.

If the amounts you enter for Inflation and Safe Withdrawal Rate add up to less than your expected return, then your portfolio should last forever. If you want to retire earlier you can fiddle with those percentages. The calculator will tell you how much wiggle room you have in each situation.

Edit 4th February - I came back to have a look at this calculator and find it wasn't working :( Blogger doesn't seem to be a fan of me forcibly injecting javascript into a post, so I've moved it across to a page. Hopefully it works a little better, but please leave a comment if you are having issues.

I made a calculator

Inspired by Aussie Firebug's early retirement spreadsheet, and my own frustrations with excel, I made a calculator with Javascript.

Bikes, Burglary and Budget Blowouts

Before I start I need to address my improper use of 'burglary' which is defined as "illegal entry of a building with intent to commit a crime, especially theft". My bike was stolen from the street, so it's not technically burglary. But alliteration makes for a good title, so let's roll with it. Or not, as my wheel deprived situation would have it.

We're now twelve days into the month and I can unhappily guarantee that I will be going over budget. January is normally a pricey month for me because a lot of quarterly bills hit in January, and a couple of annual ones but this month sucks in every possible way because.... some jerk stole my bike.

This is every kind of unacceptable. I don't own a car. I deplore catching busses. I cruise past traffic with a smug grin on my face thinking about how I'm out in the fresh (city) air, getting exercise, moving faster than you suckers in your cars, and I'm doing it all for free. My favourite 'game' on my ride home is to race busses. It's a 2 km stretch, with one set of traffic lights and about 6 bus stops. I win most days. I only shower at home once a week because I shower at work every day. My workplace actually provides bottles of body wash. Which means a bottle of body wash at home lasts me forever.

I'm also that annoying guy who gives you a cheeky sideways grin whenever you complain about traffic or busses and points out you wouldn't have this problem on a bike. And now my bike is gone. The reclaim rate on bikes in South Australia is something stupidly low, apparently around 10%. With my bike being stock, with no distinctive markings I have almost no hope of seeing it again. I also lost the paperwork with the serial number when I moved house, so I have no way of proving it's mine even if I do find it somewhere. I can only hope that whoever stole it parks it near my work/house, has left all my accessories on, and that they didn't remove the half broken reflector. Those are my 'identifying features'.

 In a nutshell, I'm stuffed. So, four days after the theft, say hello to my new bike!

Okay so this photo obviously isn't my bike, but it's what I'm getting. My old bike was a Myka 2013 bought almost exactly three years ago (three years and a dayto be precise!) and my new bike will be a Myka 2016. Looks like it's going to be the last one of this model with disc breaks, and it has 3 less gears than the last one. It's all kinds of weird that the bike has less features, but to be honest, when you commute you tend to use three or four gears, and when I (rarely) ride trails, I use three or four different ones. So I'm sure I won't miss the extra three gears.

Financially, I wouldn't normally do this. Lose something and buy a new one in less than a week. But It's not like a luxury buy of a new mp3 player. Or a big ticket item like replacing a car. So far in just three days I've burned through half a tank of petrol, ripped up my ankles skating 3kms because I was too stubborn to drive, and probably doubled my water bill. And the gas bill since I like my showers warm. And I've been completely non-functional at work. If not for my morning work-outs I'd probably be catatonic.

The numbers though -
New bike: $550
Accessories: Approx $150 for a rack and three new lights. I haven't bought them yet, so that's a guess.
1/4 tank of petrol: $15ish
7-8 days of catching a bus: $53.70

So financially, losing the bike has stung, but going without stings more. In just one week I've already spent 10% of the replacement cost of the bike in getting around. That's ignoring the gas / water that I'm using showering at home. And the inconvenience / annoyance of losing my freedom. And grocery shopping has been appalling. I can't just stop by the cheap shops for the good milk on the way home, I need walk to the expensive shops after work, buy a bag full of groceries and lug it home on the bus. A bike fitted with decent panniers can hold double what I can carry, and I don't even blink.

So the budget for this month is completely blown out, bike thieves are among the lowest scum on the earth, and I now know every pawn broker within a 15km radius of my workplace. Harumph, harumph, harumph. How frustrating.

Oh, and now that I'm done sulking about my bike. I need to get fillings on Tuesday. Wish me (and my wallet) luck!

Bikes, Burglary and Budget Blowouts

Before I start I need to address my improper use of 'burglary' which is defined as "illegal entry of a building with intent to commit a crime, especially theft". My bike was stolen from the street, so it's not technically burglary. But alliteration makes for a good title, so let's roll with it. Or not, as my wheel deprived situation would have it.

Goals Update December 2016

So my last two updates were pretty messy, so I think I'll switch to monthly. I've been tracking my expenses monthly for a couple of years now so this will be a lot tidier and more comfortable than trying to break it up into weird fortnightly chunks.

So, goals. Even though I started this to keep me accountable (at least to myself) on my 6-month money goal, I want to keep an update of the New Years goals as well.

SMART new years goals

I never make New Years resolutions. It strikes me as quite foolish to say that since the number in the date changed, you have to change too. But my partner went white-water rafting over the break, and I stayed home because I had no annual leave. I also didn't want to die, but that's besides the point. Not that the rafting was going to be terribly dangerous, but the guy leading the trip has a track record for near-death experiences for him and his friends. Think abseiling and getting knocked unconscious, misreading a river and getting sucked through an underwater channel. That kind of near death.<br />

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So I spent New Years at home, alone. It wasn't too terrible at first. I was puppy-sitting and since I had no idea how he would react I wasn't going anywhere. Apart from a bit of shaking we were fine, no barking, no whining. So if I have him visit again I know we'll be okay for fireworks.<br />

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I also had a really good New Years Eve. I took the puppy for a giant walk, caught plenty of Pokemon and got sunburnt. I went to Bunnings, bought some summer veggies (finally) and got them planted, as well as making a frame for the zucchinnis to climb. I made myself some decent coffee (latte art continues to elude me) played some video games, and watched some movies. I drank a bit, and went to bed around 1:30am feeling a little lonely, but really tired after a busy day.<br />

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And then New Years day I watched movies and started to binge watch True Blood. I only walked the puppy for about 15minutes. I did drop by a skate park, but the swarm of school holidays kids convinced me not to even try.<br />

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And then the New Years day public holiday I watched more True Blood. I did manage to get out to the skate park for about 20minutes, but only cause a friend got there first and asked me if I wanted to come by.<br />

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In short, on New Years Eve I created something. I exercised a lot. I lazed around a bit, and I had a great day.<br />

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The other two days I lazed around <i>a lot. </i>I created nothing. I exercised a little. They were really disappointing days. They weren't bad days, but I didn't feel excited or fulfilled. I did download 3 versions of Candy Crush.<br />

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So, I'm not going to make any resolutions to be 'more productive' or 'exercise more'. But I am going to set myself a couple of Specific, Measurable, Attainable, Rewarding and Timely goals.<br />

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<b>Create something every month</b><br />

I know how to knit, I have all the supplies to make basic chainmail or jewellery, I can code and could make a really basic game, I love building things (basic, messy, functional woodwork) and I have a rough idea in the back of my head for a DnD campaign. Just writing this sentence has given me about twelve ideas, one for each month!<br />

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<b>Do something fun and physical 4x a week</b><br />

I try and rock-climb once a week. Roller derby is starting up again and training is 3x a week. I love slacklining and have the all clear from my doctor. Plus the local skate park is about 10minutes away. This isn't really a stretch goal, but a reminder to myself to make sure I get out enough.<br />

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<b>Apply for at least one freelance contract a week</b><br />

And finally, on a less fun more financial note. I have intermittently worked from home on freelance contracts. I enjoy short-term creative work. I hate data entry. I generally apply for data entry work because it's easier, then I get a decently sized job, get bored out my brain and stop working for a couple of months. I'm going to put some more effort into apply for contracts that interest me, not just ones that seem to pay well for easy work. I do this for bonus income, but also to make the most of my free time. I'd rather work on contracts that count towards my one creative item per month, than just get a couple of extra dollars for mind-numbing monotony.<br />

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Oh, and this is on top of the financial goals that inspired me to start this blog (20k by 1st July). Because what's life without too many goals<br />

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