Afterpay (is not) for dummies

When I first saw Afterpay spring up, I thought it was the dumbest way to scam people into spending money they didnt have. With slogans like "Broke AF but strongly support treating yourself? Afterpay" this was clearly a stupid trap for stupid people. A highly effective trap, but a stupid one nonetheless.

If you don't have money to spare, you sure as heck shouldn't be 'treating yoself'. But then I got to thinking, if you already have the money, and already intend to spend it, is Afterpay any worse than a credit card? Time for a quick review.

First things First, how is Afterpay making money?

At a glance you'd assume that Afterpay is making money from you via fees. In fact, if you're on top of your payments, Afterpay doesn't make a cent from you. Instead, they collect fees from the retailer. (Side note: If you really want to support a business, don't Afterpay with them, you're cutting into their profits)

Afterpay uses an age-old 'debt purchasing' model. When lenders are tired of chasing people for money owed, they can sell that debt to a different, more ruthless company. The original lender will sell your debt for less than you own, recoup most of their money and wash their hands of you. The debt collector then hounds you to make the payments, and collects a small profit.

Afterpay is like that, but friendly, and they do it at point of purchase.

For example, you purchase something for $100. You now owe the retailer $100. This is a debt.

Afterpay purchases that debt from the retailer for $96 (specifically, they charge 30cents, plus 4-6% of the transaction value)

The retailer accepts 4% less for an immediate sale. They're hoping that you'll spend money you wouldn't normally. The retailer would be better off if you paid them directly, but hopefully with the lure of Afterpay you've spent extra to close that gap.

Afterpay then collects $100 from you over 4 payments. They make $4 on the transaction.

The important part is, as long as you don't miss the payments Afterpay isn't going to cost you a dime.

Just like a credit card

In a sense, using Afterpay is just like using a credit card. You walk away with the item, and a debt to be paid later. To use Afterpay well, you need to follow three simple rules: 

1. Don't spend money you don't have.
2. Don't spend money you don't have.
3. Don't. Spend. Money. You. Don't. Have.

Got it? Good. If you are worried about your self control you can set up a secondary account for Afterpay transactions. When you make the purchase, move the required amount of money into the Afterpay account and leave it there.

Using it to your advantage

If you Afterpay something, you get to hold on to your money for a little bit longer. Just like with a credit card, this 'spent, but not gone' money can be placed in an offset account against a much loved mortgage, or a high interest savings account. The money can keep working for you before you make the required payment.

Say you make a $400 payment on your credit card and you don't need to pay the balance until 30 days later. You leave $400 in your offset account for those 30 days, against a 4% home loan. In 30 days, you save 75.6cents off your loan. While it's a small amount, it's free money.

Afterpay works even better, because the payment is stretched over a longer period, 42 days from the first payment to the last. Over 42 days, you accumulate an 88.8cent saving, even accounting for the incremental payments across those 42 days.

Combining these two delayed payment options,  you could take two whole months to pay back that $400, and reap the rewards, including credit card rewards points.

After quickly reviewing the numbers, it turns out that if I make a $400 purchase on the 1st of November with Afterpay, instruct Afterpay to take the money from my credit card, and hold the money in my offset account, I can save $1.578, equivalent to getting a 0.4% discount on my purchase.

Here's how it works:

1st November. Set up a $400 purchase with Afterpay, linked to my credit card. Afterpay immediately takes the first payment of $100.
I owe $300 to Afterpay, $100 on my credit card, and have $400 in my account. 

15th of November. Afterpay takes it's next $100.
I owe Afterpay $200, plus $200 outstanding on my credit card. I have $400 in my account, and in the past two weeks, I've saved 61.4cents. 

29th of December, Afterpay takes another $100.
I owe Afterpaty $100, plus $300 outstanding on my credit card. I still have $400 in my account, and in the month since making my purchase (that I still haven't paid for!) I've reduced the interest on my home loan by $1.227 

1st December, the party starts to die down... I make a payment on my credit card.
I owe Afterpay $100, my credit card balance is zero, and I'm down to $100 in my account. So far I have saved $1.249 worth of interest. 

13th December, Afterpay takes it's final $100
I owe $100 on my credit card, and I'm holding $100 in my account. Savings so far: $1.381 

1st January, I make the final payment.
I owe nothing on my credit card, and I'm not holding any extra money in my offset account. Savings over this period: $1.578

Is it worth it?

I hear you pointing out that I've just built an elaborate system for a measly $1.578 savings. The saving is so small I'm pushing my reported number out to another decimal point. It sounds like a lot of effort for such a minuscule return.

I'm here to tell you it's absolutely worth it.

When I shop online, I typically use PayPal. It used to take me 2-3 minutes to type in my details (forgetting my password a couple of times..), confirm that I was targeting the correct account, and hit 'Go' on the payment.

When I set up my first Afterpay payment, it took me less than 10 minutes, including the screen timing out while I wandered down the other end of the house to find my wallet and pat my cat. Any future payments (assuming I use the same credit card) will take me the same amount of time as logging in to PayPal. Just like that, I had a cat tree on the way for FIRE-cat, and I wasn't making the final payment for two months.

If this was a difficult, laborious task, I'd tell you to throw it away, and just make the damn payment. However, this is money on the table. For a couple of minutes of one-time set up, you can reap the (small) rewards forever more.

But, and I cannot stress this enough, don't spend money you don't have. Afterpay and credit cards are not a way to 'treat yoself' when you're 'broke AF'. These delayed payment tools are tricks that wily spenders can use to get ahead. They are also bear-traps that set you up for failure.

Missing an Afterpay payment will cost you $10, plus another $7 a week until the payment is made, regardless of the transaction size. Thankfully the fees are capped at $68, but a $20 pair of jeans could cost you $88 if you stuff up the payments.

If you've got a good hand on your finances, Afterpay can be an easy way to squeeze that extra bit out of each dollar. If you've got even the slightest concerns about keeping on top of your payments, stay away.

So there you have it, Afterpay (is not) for dummies.

Acorns - 12 month wrap up

Acorns are offering double sign up bonuses for September, which has drawn eyes there way and lead to them being crucified in the media with sensationalist headlines. But after a almost a year I feel like I've got the right to say, they ain't that bad. In fact, the returns are decent, the apps easy to use and the mindless investing structure is a great starting point that everyone should get behind.

If you need convincing, here's an almost 12 month wrap up.

I opened my Acorns account in October last year while sitting at my desk. I found I had developed this habit of going out for overpriced lattes simply to get away from my desk and chat with my coworkers. Once I had my account up and running I started depositing $5 each time I was invited out for coffee. The same amount of money way leaving my pocket, but I was much happier with the outcome. I'd rather buy time away from my desk permanently than a few manufactured minutes.

(BTW, this review will make a bit more sense if you've read about Acorns before, you can head over to my earlier review for a bit of background.)

However, a couple of weeks later I realised that I had an account balance of $25, and I'd just paid my first monthly fee of $1.25. For some super quick maths, that's an annual fee of $15, or a ridiculous 60% of my account balance.

Here is where everyone gets mad at Acorns. If you are only putting round ups in your account, then the fee structure is going to kill you. With round ups alone after a year my account would barely be hitting $200, because I'm not a big spender.

Round Ups are Acorns prime draw card. They track your spending and 'round up' each transaction. Spend $1.10, Acorns will take 90c. Except they don't, they wait for you to hit $5 worth of Round Ups, then take $5 each time. It's not exactly what they advertise, but it's still sneaky background investing that (most) people won't notice.

Except as I said, the fees on a small account are appalling and this is what most people are complaining about.

However to bring your fees down to a reasonable amount, you only need $400-$500 in the Acorns bank. While I was sitting in the passenger seat of a camper van in Tasmania I plumped my account up with a few easy button presses and dropped my annual fees down to 3.75%. The Acorns app is so easy to work with I did this even while my internet connection was dropping in and out.

Now let's be honest, that's still not a great annual fee. My Vanguard account pays a measly 0.75% per annum. However to open a Vanguard account, I would need to find $5,000 and a lot of people just starting out don't have that kind of money lying around.

When I started looking at investing I had $1,000. I definitely didn't have the confidence to drop $5,000 on Vanguard. That is the market niche that Acorns fills. Yes, the fees are higher than Vanguard, but the return (even after the fees) is going to be better than a bank account.

Remember that historically the share market returns 7% per annum after inflation. Ignoring inflation, the returns are closer to 10%. Even after paying 3.75% in fees, Acorns will return more than a bank account, but importantly it is hugely educational.

In my last monthly update I noted that I was losing more money each day than the cost of a cup of coffee, because the market was falling. A couple of years ago this would have been terrifying and a sign of a losing investment. I know now that it's simply the ebb and flow of valuations. One day I'll be down $10, the next day I'll be up $15.

And for people who haven't read this and are still paying the huge fees - well their big lesson will be how excessive fees destroy your investments.

For people starting out with investing, Acorns provides a solid return and a great education at a rather low risk.

Acorns performance

In the past I've reported returns of over 10% on my Acorns account, even after fees. However the times, they have a-changed and the last couple of months have not been kind. However this isn't just a straight sales pitch, this is a realistic outline. In the first six months I was up 10%. Now I'm only up 2.32%. If I wrote this review a month ago it would have been better. I'm reasonably confident in a month or two the numbers will move back upwards.

   
You can see on these charts when I dropped in $400 to plump up my account, and when I switched from adding $5 a week, to $75 a week in July.

In fact, the markets are changing so much that since I took these screen shots two days ago my returns since opening have bounced back up to 3.14%/ The longer that my account is around, the less bouncy these returns will be.

So if you're new to investing, I absolutely think you should sign up for Acorns. With this referral link you'll get a $5 bonus, which covers your first four months of fees. Build your account up to $500 as quickly as you can, then set a regular weekly investment that you can handle. If you start out with $5 you'll invest $260 in a year without even noticing. If you can push that up to $20 a week, you'll have $1,000 at the end of a year, without even noticing.

While you're learning to invest you can open the app each day and watch the charts bounce up and down. It's a great lesson for investing for the long haul and not worrying about day to day swings.

Save money, the environment and your vagina

As a female, I statistically spend 25% of my time walking around with my knees clenched together because it's That Time of the Month. I always resented that not only is it uncomfortable and inconvenient to have a period, but it was expensive as well. I used to spend $10 a month on tampons.

A couple of years ago I made the switch to using a cup, and I have never looked back.

Comfort and practicality

Firstly, a menstrual cup (specifically a Mooncup) is easily the most comfortable thing I have ever used. Back when I used tampons I always struggled to get them in exactly the right place, and I remember not being able to sleep some nights because I couldn't get settled. 

While the first month or two using a cup requires a lot of practice to get things just right, once you learn the tricks it's easy to forget that you are even wearing a cup. In fact I did the other day! 

Even better than the comfort though is the practicality. I think we've all had a moment when we've flipped open our tampon box to find that we've run out. In high school and university I remember awkwardly approaching near strangers to ask if they had any spares. 

I have been using the same cup for four years now. I have bought a second one, but that was only because I accidentally packed it in the wrong bag. I decided I'd rather have two Mooncups (one in each bag) than constantly remember to swap it between bags and end up awkwardly missing it.

Apart from some discolouration, my cup looks exactly the same as the day I bought it. You can wear it when you swim, when your hiking or playing high contact sports. I've worn it overnight without any spillage. I've also (accidentally) worn it for two days without a leak - I don't recommend this. For proper hygiene you should be emptying the cup twice a day, but it's so comfortable you can easily forget.

Day to day usage is super easy. You need to take out your cup and empty it twice a day. If you're in a public bathroom you can quickly wipe it out with some toilet paper before replacing it. If you're at home give it a quick rinse under a tap.

Long term, you should sterilise your cup every few months. You can either soak it in boiling water or wash it with gentle soap - just make sure you let it air dry after. It's as simple as that.

Finances

Okay, here we go, this is a finance blog, so how much money does a menstrual cup save me? Over $100 a year. 

I have a reasonably unreliable period, which I believe is a side effect of the Implanon implant I use for a contraceptive. As such when I used tampons I was generally going through 40 a month for a period that would last more than ten days. The cheapest tampons you can by these days are 11cents each, or in my case, $4.40 a month. However I found the cheap options never worked consistently and led to leakage and buying new underwear. 

Between the slightly higher shelf tampons and buying replacements, I was easily burning through $100 a year on something I had no choice about. Invested over 10 years this costs over $1,450. For something I have no control over! Put another way if I wanted to invest enough to cover that cost I would need $2,500 in the bank. Just to pay for my period.

Buying two cups back in 2013 cost me a measly $100 after paying for shipping and currency exchanges (the Australia Dollar wasn't particularly strong then). In four years I've saved over $400 by using a cup, that's 100% return each year. You can buy one today and join the cheap, comfortable revolution!

Environmentally Friendly

I've saved a lot more than money though. Plastic takes centuries to break down, and every tampon comes individually wrapped. While the tampons themselves might be biodegradable, the process to make them requires a large amount of chemicals, processing and shipping. 

Cups are made from medical grade silicon, which also won't degrade. However after four years of usage my cup (produced once, and shipped to me once) has used significantly less resources than a four year supply of tampons, and created a significantly smaller amount of waste than hundreds of plastic wrappers.

While this blog is about personal finance and retiring early, there's no point in escaping the rat race to a planet buried under mounds of rubbish.

But it's gross!

This is the number one complaint from women who are reluctant to try a menstrual cup. This is something that we need to get over. As an adult woman you will bleed from your vagina once a month for thirty to forty years. Do you really intend to spend all that time grossed out by a basic bodily function? No, of course not.

Most times when I change my cup there is no mess. Occasionally you will get a small amount of blood on your hands. Wipe it off with some toilet paper, then wash your hands like you were going to anyway. In the worst case scenario you might want to invest in a nail brush, but I very very rarely need one.

What are you waiting for?

For a measly £25.99 plus shipping you can have the convenience, comfort and cash-saving powers of a menstrual cup from MoonCup UK.

And if you think dealing with your period sucks, try living in East Africa. Without access to proper supplies, and the cost of a packet of pads equal to 60% of the daily wage, women in East Africa resort to using things like twigs, leaves, mud and mattress stuffing. These substitutes are ineffective, and lead to infections and long-term damage. Young girls in East Africa miss up to 20% of their school year because they cannot afford sanitary products. If this blog was preaching to the converted, or you want to change someones life, you can donate reusable pads or a menstrual cup via Femme International.

Free books with Amazon Kindle Unlimited

Do you like books? I like books. Do you like paying for books? No, me neither. I re-read books time and time again to keep my book intake up without thinning my wallet.

Normally this is where you'd get a recommendation for a magical place called a 'library'. Except to get to a library you have to go outside where there are people, or wait weeks to borrow an e-book.

Thankfully, there's another option!

Amazon Kindle Unlimited

Amazon Kindle Unlimited is offering a 30-Day Free Trial where you can download and read any book you want immediately (assuming the author has signed up for Kindle Unlimited). It's like a library, but better because you don't have to wait for someone else to return the book.

If you're a big reader Kindle Unlimited can be amazing for your budget. I tend to buy a book a month for somewhere between $6 and $17. Kindle Unlimited is a measly $13.99 a month (or $10 if you're in the States).

I keep my book budget down by re-reading things constantly. I don't buy a new book in a series until I've re-read the start of the series, which means buying things less often and generally not at brand new prices. However it does mean that I don't get to read as many new things as I would like.

I read an average 2-3 books a month. With Kindle Unlimited I could be reading 2-3 new books each month, for pretty much the same price as buying one book. So it's not unlimited free books, but 30 days of free books, followed by heavily discounted books.

Read anywhere, without a Kindle

Okay, but LadyFIRE, I don't have a Kindle - no worries at all my good friend! You can download the Kindle reading app to your phone, tablet, or you can just read on your computer. This actually works out great for me because I have a tendency to forget my Kindle at home, or just forget to charge it.

Authors get paid!

Here's something important that happens with Kindle Unlimited that doesn't happen at your local library - authors still get paid. This is kind of important to me because I want authors to be able to eat, and put a roof over their head. These nice amenities tend to lead to authors wiring more books that I can read.

After a bit of digging around I've pulled together some numbers. For a straight out sale via Amazon, an author pays a 30% commission. So for that $10 book you purchased, the author only recieves $7. When Amazon does their daily deals and you pay a measly $1 for a book, the author only sees 70cents.

On the other hand, when you are using Kindle Unlimited, authors are paid by page read. This appeals to me in two ways - one, when I buy something that sounded great but turned out terrible the author still got my money, and that makes me a little grouchy. However, point two - if the author writes something amazing and I read it again and again, they get paid every time!

Kindle Unlimited uses a system called Kindle Edition Normalized Page Count (they're up to version 2.0). This is to prevent authors from using large font or paragraph breaks to try and push up their page count. With this system authors are paid approximately $0.005 per page. While that doesn't sound like much, it means that a 300 page book is worth $1.50 every time it's read.

Of course, for a well known author like Margaret Atwood (read the Handmaidens Tale! It's been out since the 80s!) $1.50 for 300 words is well below their usual earnings, but for an indie author just starting out Kindle Unlimited creates a great system where they don't have to convince people their books are worth paying for. You can test out a new author without committing money to them.

Not another subscription service

I'll be honest, I'm normally against subscriptions. A lot of people are wasting money with them by paying for things they don't actually use (remember Foxtel and having hundreds of boring channels) or they are wasting time by watching way too much Netflix. If you want to go to the library and wait for weeks for books to become available then that is better for your wallet.

However, Kindle Unlimited skips both of these issues because books are amazing. Non-fiction books can make you a better investor, teach you woodwork or a whole new language. Fiction books, well escapism is great and depending on your chosen genre you might end up knowing a lot more about the difference between a dragon and a wyvern that you could ever need (hint, count the legs).

Plus, in case you missed it at the start of the post, you can try it for 30 days for free. Don't like it? Don't pay for it. But give it a crack and see how you feel about the bliss of endless books.

Boring disclaimer time! Links to Amazon Kindle Unlimited are affiliate links. You still get a 30-day free trial, you pay the same price as everyone else, but I get a teeny tiny kickback from Amazon. If enough people sign up I could buy a coffee!!

Frugal date nights: Board Games

With winter well and truly set in frugal dates like fishing, picnics and hikes are few and far between. Mr. FIRE and I are still looking for ways to spend quality time together and while they largely involving building a nest on the couch, enjoying the wine and cheese and projecting a movie straight onto a wall sometimes we like something a little more intensive.

We play board games. Somehow we're still together....

Board games have been pretty integral to our relationship since it's early days. The first time I met Mr. FIRE's friends was over a long weekend and a game of Munchkin. It was also the first time I yelled at Mr. FIRE's friends, insulted a couple of them and did my absolute best to sabotage their game. Munchkin is a vicious backstabbing game that largely consists of bending the rules as far as possible and picking on whoever is in the lead. It was great fun.

Unfortunately Mr. FIRE and I are both the kind to bend the rules as far as they go, and our regular gaming group isn't particularly willing to break up our arguments. Many a game has ended with someone throwing cards down and leaving the room in a huff. We aren't allowed to play Munchkin anymore - in four years it's the only serious argument we've ever had. That and Betrayal at House on the Hill. Anything where the rules are wiggly and open to interpretation doesn't end well in the FIRE household.

However we still love gaming. We have friends over at least once a month to eat like teenagers, play Offspring too loudly and swear over dice rolls. We're all an introverted nerdy bunch of weirdos and having some structure to our interactions is great.

On top of playing with friends, Mr. FIRE and I like to game together occasionally. Unfortunately most games are made for 3+ players. Oh, they might say 2-4 players on the box, but they're pretty dull with just two people (looking at you Takenoko, with your cute panda and terrible gardener).

However there are some games that play brilliantly with two people. Paired with a small glass of mead or port, and some home baked snacks, they make for a brilliantly frugal date night.

Disclaimer: All the links to Amazon in this post are affiliate links. If you go on to buy the game I'll make a little bit of money at no extra cost to you. Click a link and feed a starving blogger? :) 

Lords of Waterdeep

This is a favourite in our household. In Lords of Waterdeep: A Dungeons & Dragons Board Game you don't play any lowly adventurers seeking glory - you play the Lords sending the cannon fodder adventurers to glory. Of course you take a cut of their glory.

Lords of Waterdeep is a worker placement game. In each round you can take a certain number of actions to do things like visiting places in town to recruit adventurers to your cause, building new stores in town and collecting quests.

The game is brilliantly balanced so that building new stores brings you ongoing benefits - if people visit the store, and certain quests give you extra abilities moving forward like bonus points. Halfway through the game each player is given an extra action each round - if no one has built a building by this time, then there won't be enough actions available each turn.

Playing this game in our house is reasonably quiet as you try and plan each move, and build up fallback plans in case something goes wrong. Most actions can only be done by one player each turn (for example, only one person each round can visit the plinth and recruit a priest) so certain spaces are a hot commodity. While we plan in near silence, there's always a little friendly abuse if Mr. FIRE takes the space I needed to finish a quest.

To add an extra twist to the game, each player is assigned a Lord at random at the start of the game. Lords receive bonus points for completing certain quests, for example Brianne Byndraeth earns an extra 4 points for each Arcana and Skullduggery quest, while Mirt the Moneylender earns 4 bonus points for each Commerce and Piety quest. These aren't revealed till the end of the game, so while you can take a guess at the bonus points, you never quite know where your opponent is up to.

Side tip: There is also a Lord call Larissa Neathal, aka 'The Builder'. She scores 6 points extra for each building. While this is great in a multiplayer game, in a two player game there isn't really enough competition for spaces to make her worthwhile, I suggest taking her out.

Photo credit: deskovehry.com

Lords of Waterdeep is a rather deep game that takes around an hour for a good solid play through. The first game may take a while as you work out all the rules, but you won't play much faster as you get more familiar because there are plenty of intricacies and plans to be made and games often come down to one or two moves.

If you already have Lords of Waterdeep, I strongly recommend adding the expansion Scoundrels of Skullport into your collection. It's actually two expansions in one, the 'Under the Mountain' expansion, and the 'Skullport' expansion. Under the Mountain is a simple 'more stuff' expansion that creates more town spaces, and gives you a couple more Lords.

The Skullport expansion introduces the concept of corruption. There are quests and town spaces that give you a lot more money and units than usual, but they also give you corruption tokens. These cost you points at the end of the game, and the more in play the more costly they are. The spaces are oh so tempting though, and it's hard to keep a clean slate.

The Skullport expansion has a lord call The Xanather who gains 4 victory points for each corruption token. Unfortunately he still has to take the penalty for having the corruption, so he's pretty worthless. I'd suggest removing him from the game.

Carcassone

Lords of Waterdeep is a big intimidating game with a 24-page rulebook and at least 15 minutes set up on your first game. By contrast, Carcassone has a trifold pamphlet that you can skim read in five minutes or less. There is also zero set up for the game, you can play straight out of the box. All you need is a big open table, put the box within arms reach, and you're ready to go.

Our version came with a mini-expansion called 'The River' which gives us 30 seconds of set up time, and a bit of structure for starting the game. Once again, all you need is the box within arms reach and a big open table. To set up The River expansion, grab the river tiles out of the box and play them first, then go on with the rest of the game.

Carcassone is beautiful, relaxing and deceptively simple. You can your friends (2-5 players, and good with any number) and slowly putting together a countryside by laying tiles. With the river expansion you start by placing the source tile (the start of the river) and lay out the river one tile at a time before ending at a small pond. After that you can expand out into building more of the country side.

The rules are pretty simple, pick up a tile and place it down. You have to place your tile against an existing tile (which is why The River expansion is so nice, it gives you somewhere to build from) and your placement has to make sense - for example there are roads, towns and open fields. When placing tiles roads must touch roads, towns against towns, and fields against fields.

Photo Credit: The Board Game Family

Whenever you place a tile you have an option to place down a meeple (cute little person shaped tokens) on the road, in the town, or in the monastery. Each feature scores points, once it's completed. For example roads start and end at towns or villages, once a road is completed you score 1 point for each tile. Towns are worth 2 points per tile, and need to have a complete wall. Monasteries are worth 1 point for the monastery, and 1 point for each surrounding tile, scored when the monastery is completely surrounded.

There is also the option to play a farmer - by claiming a field the farmer scores 3 points per adjacent completed city at the end of the game. The field stops at any road, river or city - to be honest we've never played with farmers. We treat it as an optional extra and have enjoyed the game without it plenty of times.

In the game you have only 7 meeples, and you don't get them back until they score so it can be stressful committing your last meeple to the board. You can also force and opponent to share their hard earned points by connecting your road or town to theirs. If you have an equal number of meeples, you both score the full points, however if one player has more then they get all the points and the player with less gets nothing.

Other than that, Carcassone has very little opportunity to back stab your opponents, it's largely a peaceful game of building a beautiful countryside. Beautiful isn't an exaggeration either, the artwork in this game is wonderful, with plenty of cute little details, but still simple to understand at a glace. It's a wonderful, easy to play game that even Mr. FIRE and I can't fight over.

Pandemic

Finally, sometimes it's nice to work together on a board game. Pandemic pits you and your friends (2-4, more players makes the game harder) against four virulent diseases that have broken out worldwide. You take on various roles of CDC researchers and you travel the world curing breakouts and trying to research a cure before mass panic breaks out and everybody dies.

This game is brutal. Absolutely horrendously evil. At the start of each turn you draw from the player deck, what you hope for is cards that will help you develop a cure. Sometimes your turn up an Epidemic, where all hell breaks loose.

To understand why Epidemics suck (apart from the obvious implications of the name) you have to understand the 'infection phase'. In a normal, not horrible round, you draw from the player deck, and then run the infection phase. In the infection phase you flip cards in the infection deck and place disease tokens on a city as instructed by the card. The harder you've set the game, the more cards you flip. Once you've pulled a card it goes into the discard pile, and you don't have to add diseases to the city again. Unless...

If you've drawn an Epidemic then you first grab an infection card from the bottom of the pile and place three disease cubes on that town. You then shuffle the discarded infection cards and place them on top of the infection deck. Then you draw your infection cards, piling more diseases onto the already sickened cities. If the game asks you to add more disease cubes to a city that already has three, you have an Outbreak and you need to place disease cubes in every adjacent city. If one of the adjacent cities already has three disease cubes, then other Outbreak occurs, and the disease keeps spreading.

It is nasty. You then have four actions in your turn (move, heal, research a cure) to try and mop up the damage.

To win at Pandemic you need to research all four cures. Thankfully you don't need to wipe the diseases off the board, just figure out how to do it. The mop up happens post game.

To lose at Pandemic... well, there are so many ways! If you run out of disease cubes and cannot place them on the board when required, you lose. If more than seven outbreaks occur you lose. If you run out of cards in the player deck, you lose. In each case the in-game explanation is that the people of the world have panicked, rioted, and probably died. Yay!

Despite this, Pandemic is a great couples game. I suggest playing with cold drinks and cold snacks, because you'll be so engrossed in planning saving the world that any warm food will go cold before you remember to eat it. Pandemic isn't really played a turn at a time - you'll map out your plans for the next three to four turns, agreeing on an action plan to save the world. And then, halfway into your plan you'll draw the wrong card and have to start all over again.

When we first played Pandemic we lost horribly and constantly. After about twenty playthroughs, we actually started to win consistently. So we bought the expansions.

We have two of the expansions and since we have never beaten the second expansion, we haven't bothered to buy the third (State of Emergency, if you're curious).

The first expansion is On The Brink. It comes with two ways to make the game harder, Mutation events or the Virulent Strain challenge. In Mutation events one of the diseases mutates (surprise surprise) and you now have a fifth purple disease to cure. In the Virulent Strain challenge one of the diseases becomes extra bad with horrible rules like 'put down two disease cubes instead of just one'. We've beaten both of these challenges, but not at the same time. This game is hard, did I mention?

The second expansion is called In The Lab. You can't just wave your hands and research a cure anymore. You need to collect samples of the disease and process them through the lab. This is impossible. Losing still makes for a great date night, but we've never won this game.

(Technically, Mr. FIRE won this game once, but I wasn't there so it doesn't count. He was playing with a guy named Jesus - miracles are required to finish this game!)

Frugal wins?

At a glance board games are expensive. I bought mine for $60-$80 each. The current prices seem to be sitting around the $20-$40 mark, which isn't so bad. It all comes down to how much you play the games. If you only play them once or twice then they are a huge expense, but you can easily play them enough that they come down to a $1 an hour dollars to fun, or even less.

After the initial outlay for games the only cost for a date night is dinner and wine. Since you eat every day anyway (I assume) date night can be 'free'. However to jazz it up a bit Mr. FIRE and I play games with a glass of wine and a bowl of snacks. Depending on your budget this could be a fancy antipasto platter complete with stuffed olives, or a name brand packet of potato chips.

Whichever way you choose to go with dinner, you can knock out a wonderful date night for $20 or less. You have to interact with each other, probably yell at each other, and you'll have to focus on each other - no one wins a game with a phone in their hand. And winning is the most important thing. Right..?

What's up with this 'Vanguard' thing

Have you heard of this 'Vanguard' thing? And you've maybe heard of index funds? If you've been around the early retirement sphere for a while you've probably stumbled across them. Unfortunately most bloggers seem to assume you know what that means.

I'm not going to pretend to be a tax expert, or a genius investor, but I'm going to give you a whirlwind tour of why I invest in index funds, and why I use Vanguard.

I heard about Vanguard way way back in 2013. I think. As a rough guess. I was reading Mr. Money Mustache blogs from start to finish (with the exception of the ones about the US tax code). After reading every post I was convinced I was going to retire by the time I was 30, that people in cars were clown, and that Vanguard was good.

I've since had to revise 30 up to 35, I'm willing to admit that cars are okay (although you really only need one in the house) but I still think Vanguard is pretty darn good. I started investing in it back in July 2015 before I really understood what I was getting into.

Pros: Low fees and a slice of every pie

That's one of the best parts about Vanguard - it's investing for dummies. You want to invest in the top companies in Australia (or the US, or the world?!) then Vanguard has you covered. Worried about stocks and you'd rather go for bonds - less volatility but a more secure return - you can do that with Vanguard. You want to invest in real estate but don't have the down payment for a property? With Vanguard you can buy into a massive real estate portfolio that includes residential and commercial properties for a measly $5,000. More than investing with Brickx, but you get actual diversification, a brilliant track record and really low fees.

Yay for Pie!

Investing for dummies? Pie?!

Yepp, investing through Australian Securities Exchange (ASX) is like getting a really big slice of the pie, without the tedious process of buying every single company listed on the ASX. You could also get a slice of the S&P 500 (America), a collection of Australian Government Bonds or a slice of the international market. For the sake of simplicity I'm just going to talk about buying a slice of the ASX.

When you buy a single unit of the Vanguard Australian Shares fund you buy a small piece of their portfolio. Each piece goes up and down in value based on the companies within it, and you receive a portion of the dividends from that company. It's just like buying a share in a company, but rather than buying a single company (say, Qantas) and having your investment fluctuate based on their successes (how many flights were made this month? how many planes fell out the sky?) you are buying a very large handful of companies. 

This means that if one company tanks terribly your investment doesn't take a big hit. If one company suddenly triples in value, you only see a fraction of that - because while you own part of that company, you also own a couple of hundred others.

While it sounds dull, it means you can't really screw it up. Investing in individual companies takes hours of research, and you never know what deals are being made on the golf course. You might think you have all the information to know that your speculative mining company is about to hit it big, but their competitor might move in and sabotage their equipment.

If this happened and you owned the little guy, your investment would tank. If you owned an index fund, you might own a little part of the little guy, but you'd own a big part of the big guy. You're investment moves in lockstep with the overall market, but isn't affected by booms and bust like the above scenario. It might be boring, but it's safe. A historic average 7% p/a after inflation kind of safe.

Low fees

Here's the biggest thing. When I was 18 and tried to buy property a broker told me I didn't have enough money. He then tried to sign me up for a managed fund. Like investment funds, managed funds own lots of companies, and you buy a piece of that portfolio. Unlike index funds, managed funds are trying to win!

An index fund simply buys the biggest companies on the market and holds them in proportions that match the market. That means that the Vanguard Australian Shares fund holds large amounts of Westpac, BHP, Wesfarmers and all those other big guys. Rather than trying to guess the winners, they just stick to what the market is telling them.

Managed funds try to beat the market by buying low, selling high and picking out those stocks that are going to boom. That means they spend hours trading stocks, researching, planning and monitoring. Sounds great, but historically most funds don't outperform the market. They might have a good year or two, but they don't run away with the trophy.

What makes all the difference is the fees. This fund was going to charge me 3.5% fees (from memory, it was a while ago.) If stock market has a historic average return of 7% then they would need to return 11.5% to break even after fees. I can tell you right now they weren't going to be able to pull this off. They were boasting 8 and 9% returns.

On the other hand, Vanguard fees for owning a slice of the ASX are a teeny weeny 0.75% per annum. If you're holding more than $100,000 then the fees drop down to 0.35%. They also don't charge fixed brokerage fees per transaction, they instead work on a buy-sell spread percentage. This sounds complicated but it simply means when you buy into the fund you pay 0.1% more than the current value, and when you sell you receive 0.1% less. It looks something like this:

Purchase 100 Units:

Unit Value: $2.0654

Purchase Fees: $0.20654

Cost: $206.74654

After one year

Unit Value: $2.209978

Holding Fees: $0.01657

Investment Value: $220.98123

Sell 100 Units:

Unit Value: $2.209978

Sale Fees: $0.2209978

Money in your pocket: $220.7768 (6.7% return after one year)

The teeny tiny fees are so small it's barely worth noting. There are fees, and you are paying a little bit, but honestly you'll be paying fees wherever you go. Having small fees making a massive difference in you investment over time.

Tiny disclaimer - when you invest you don't have to do this maths, you can throw $100 at a time at Vanguard and they sort out how much disappears to fees, and how much is invested. You'll never have to transfer them 74 cents to round out a purchase. It was just easier to demonstrate the maths the way I have :)

Cons: Big fat buy in, focus on financials, a terrible website, franking and quarterly distributions

Let's be honest, Vanguard isn't perfect. I work as a Web Developer / User Experience Expert and I just need to get this off my chest.

Vanguard has the ugliest, clumsiest website I have ever struggled with! I do like the product though (You can tweet that, maybe they'll upgrade it)

Mr FIRE is a networks engineer and would like to add that their APIs are terrible to work with, don't follow protocols and make at home data collection tricky (if you're not a nerd, you can ignore that part).

What that means for your Average Joe is that figuring out how to actually sign up is a pain in the behind, and digging around to find out what you're buying into is annoying. It's best to read other sites reviews the get an understanding, rather than trying (and failing) to figure it out from the Vanguard site.

Oh, and once you've opened a Vanguard account, you need to sign up for online banking separately. What a nightmare.

For your convenience:

• Sign up to Vanguard here.
• If you have an account, sign up for the online portal here.

You're welcome. I've done this before and it was still annoying to find those links.

Big fat buy ins

The thing that put me off Vanguard for a long long time was how much you need to get started. You need to be able to drop $5,000 in one go to open an account. When you're new to investing that is a lot of money, because you should never invest more than you're willing to lose. For investments in ETFs you should be willing to leave it there for years, not months, and $5k is a lot to put away in one hit. But remember for that you are getting a slice of many, many companies - so you know if one of them tanks, your entire investment won't go down the toilet. The only way to lose everything would be if Vanguard went under, and consider the size and history of the company, the odds on that are pretty low.

Once you've paid that first $5,000 you can add to your investment for as little as $100, which is much nicer. And with the ability to make deposits via BPay, you can easily set up a recurring investment - set and forget dollar cost averaging is a massive win in my book.

Focus on financials

One of the risks in investing in an ETF focused on the Australian share market is how much of the banking sector you end up owning. The top ten companies in the Vanguard Australian Shares fund are CommBank, Westpac, ANZ, NAB (the big four banks) then BHP, CSL Limited, Telsta, Wesfarmers (Coles), Woolworth, and Macquarie Bank.

Five of the top ten companies are banks, and they make up 28% of the overall fund. That means that if the banks take a hit, then your portfolio takes a massive hit. Given that the Australian government has just introduced an extra tax on banks, this is a very real concern for me at this time.

My personal solution to this is to also 'shop' outside of Australia - I hold three different Australian based ETFs (this one, another focus on high dividend yields, and another focusing on bonds) I also hold 35% of my Vanguard portfolio as the International Shares Fund. To buy another fund means another $5,000 buy in, but it allows you to diversify even further. 

Franking and quarterly payments

This is one more thing that bugs me about Vanguard. Quarterly payments of dividends mean I'm only seeing payments once every three months, even though I know the underlying shares are paying at random times throughout the year. I understand how this business model works, and it makes sense, but it's... boring. I'd like to see those dividend payments hitting my account more often, just for a little fun.

The more serious concern though is franking credit. Companies pay 30% tax on earnings, and if their dividends are fully franked, it basically means they're pre-taxed. When you declare them on your tax return, what you're saying is "This company paid me $70, and they paid you $30 in tax, so basically I paid $30 in tax". If a dividend isn't franked, you would get $100, but have to pay tax on it. For a more detailed (and really easy to follow) breakdown, check out this post by Pat the Shuffler.

For the sake of this argument though, Franking is good. Very very good.

And with Vanguard, you can't control what kind of Franking you get. If you bought the shares directly you could look at the history of the company, what kind of dividends they pay and what sort of franking credits they offer then make an informed decision based on that. Vanguard might be investing for dummies, but it also takes your decision making power away. You do end up with some franking credits, but it's not as much as you could get if you picked the shares yourself.

Conclusion: Do we buy it?

Heck yes we buy it! Okay, the website is ugly and hard to use, but once you're signed up you can set and forget your investments. Yes we don't have much control over the companies we buy into, but that's also the beauty - most managed funds rarely beat the market, so why waste time trying? Set, forget and move on, come back in a few years to find you're super rich.

The $5,000 start up is a tough pill to swallow, and if you are scared of diving it, you can dip a toe in share market investing with Acorns but the fees structure with Vanguard is far better, and they have decades of history, rather than Acorns few months. 

As an aside - you can also buy the same Vanguard shares without buying them direct from Vanguard. You can buy them in the same way you buy shares through the Australia Securities Exchange. Aussie Firebug put together a great article about how and why he buys that way, including a video where he steps through a purchase. Check out his guide to buying Vanguard, and happy investing!

Invest in the Movies!! (Yes, Really!)

Movies have giant budgets and giant earnings, not just from theaters but from spin-off books, kids toys, terrible terrible video games, and less-terrible, sometimes-good mobile apps. When I was contacted to have a look at reviewing a crowd-funded movie investment, I assumed it was a spam message because investing in movies is for multi-millionaires in Hollywood. But it's not a scam, it's open to the little guy and now you can now invest in a movie. How cool is that!

Lights, Camera, Investing!

The deal

It's kind of like Kickstarter, but instead of being one of the first to buy a product, you're one of the first to buy a share of the profits from the product. Specifically a movie called I'll Be Next Door For Christmas that has a joke density to rival Big Bang Theory.

The premise is simple, teenage girl has out of state boyfriend visiting for Christmas. Teenage girls family are christmas loving nut-bags who go ridiculously over the top. So our plucky young lady hires the empty house next door and a bunch of actors to pretend to be her real not-crazy family. What could go wrong? Obviously everything.

Motion Activated Santa, what could go wrong?

Laundry list of accolades

While this is being pulled together by an indie film company, there are plenty of great names that you may or may not have heard before, you've definitely heard of their work though. The guys (and girls) behind the movie are also the ones behind The Simpsons, Fraiser and School of Rock.

The have writers, directors, producers, marketers, the whole hog. What they don't have is crazy high-paid A list celebrities on screen. Which as an investor suits me just fine.

Didn't Baywatch just flop horribly?

Yepp - even the power of a huge franchise backing wasn't enough for them to compete when sharing an opening weekend with Pirates of the Caribbean, which also performed poorly at the US box office. Which doesn't actually sound a death knell for high earning movies. Both Baywatch and Pirates are chasing a huge income from international sales, and can almost guarantee that they will see another round of income when they make their way to DVD. 

The Pirates franchise has the weight of the first movies success dragging it along (got to finish that DVD collection) and Baywatch can almost guarantee it will be watched by everyone eventually, even if it's just so they can say they gave it a go. 

I'll Be Next Door For Christmas isn't even aiming for the mainstream cinema market. Firstly, let's be honest how many of us actually got to the cinemas these days? The chairs are uncomfortable, the drinks and snacks are stupidly overpriced, there is something on the seat, and there is always someone who insists on talking through the movie. Plus, you can't pause it for a mid-movie bathroom break and snack top up. No thanks.

Secondly, cinemas take a big slug of profits. So do the distribution guys. So does anyone who get even a sniff in. It's crazy how much of the profits are sucked up by the middle man. So the team behind I'll Be Next Door For Christmas are planning on avoiding as much as possible by distributing through Netflix, Hulu and the like. They are still doing some cinema releases, but through some of the lower cost options, they anticipate cutting middle-man fees by 35-40%.

But really, a Christmas Movie?

Yeah, I know, I feel that way to. I'm not a Christmas person. I haven't even seen Elf because Will Ferrell's high pitch childish squealing in the trailer irked me. But on the other hand I still watch The Santa Clause movies every year, and let's be honest the first one is great, the second one is okay, and the third one is truly terrible. 

I am a fair bit of a Grinch in that I don't decorate, I hate pointless gift exchanging and I honestly just want to spend some time with my family without all the stupid requirements of Christmas (I'm sounding a bit like the main character of this movie at this rate...).

The thing about Christmas-based movies is that they tend to do pretty well because people are just so caught up by the spirit of the season. Does anyone remember Rise of the Guardians? That movie was brilliant. And I would never have watched it normally, but t'was the season for a festive movie and I adored it. People of all ages get a bit of family-friendly movie nostalgia around Christmas. Put in a brilliant script and some wonderful comedy and people will keep coming back to it.

Let's be honest, this is terrifying!

Potential returns, is it worth it?

Maths time! Let's assume that the movie does break even. If you can't afford to lose your investment forever this isn't for you. Let's me be entirely honest, this movie could be a terrible flop and you won't get your money back. I personally believe it will succeed and I'll be throwing a little money in. But I'm also nervous about it, so I'll only be throwing about $200 in. I'm keen to get a royalty check forever, but I'm not so flush with cash at the moment that I can risk much more. 

Many Christmas movies have made two, three or even six times their budget. Home Alone made sixteen times it's budget. There is potential to make a lot here. 

The minimum investment is $100 (pretty reasonable) of a grand total budget of $850,000. Most movie budgets are in millions - this movie won't be choc full of ridiculously high paid actors driving the costs up. Any money made by the movie immediately goes to paying back investors. Once your original investment is repaid (and assuming the movie is successful) investors receive 50% of the profits. 

This means that for $100 investment, for every $1,000 the movie makes, you receive a whopping 6 cents. But considering that many Christmas movies make triple their budget in the first year, and keep earning for years to come you can imagine much bigger numbers. Imagine this movie returning triple it's budget in the first year. You would receive your original $100 back, plus another $100, amazing.

How likely is it that the movie will make triple it's budget? Well as I said I'm a Grinch, so I have my doubts (even though The Grinch made almost triple it's budget). I do anticipate the movie will cover costs and start sending some money back to investors. I don't think I'm going to fund my retirement on it, but I'm willing to throw a bit of money at it and see where it lands.

The campaign has hit it's first funding goal and needs to raise another $16,000 in a month. If that target is hit they still need a minimum of $200k more and will use the first bundle of money to fund advertising and scoping out some more investors. Reading the comments they have many many plans to use more traditional fund-raising methods if they don't see enough via crowdfunding. 

Doom and gloom aside - is it worth it?

I think so. Commit an amount that you're willing to lose and let the chips fall where they may. If you're trying to crawl out of debt this is not the platform to do it. But if you're comfortable and want to try a slightly off-the-beaten-track investment, this could be for you. The movie has a great list of writers and producers with plenty of experience between them. They have fall back plans for raising capital and multiple avenues for generating revenue. 

Just like investing in any business it could tank horribly, blow everyone away or just limp along dribbling in small amount of royalties every year. While 'dribbling' isn't a fun word, getting a royalty check every year will be. As I've said, my inherent Grinch isn't excited about a Christmas movie, but my investy-sense thinks that there is a great team with a decent business model.

I'm throwing some money behind That Christmas Movie - if you'd like to as well, head over to their funding page.

Update: I just went to invest and discovered I need a passport. Last time I set foot outside the country I was in primary school, so that passport is definitely expired. Looks like I'll be missing this opportunity. In the last week they've absolutely smashed their $100,000 funding goal. While I'm disappointed I'll be missing out on this movie, I'm really excited to see how this project goes and what they do next. Hopefully I'll have a passport sorted by then.

Update Again: That Christmas Movie didn't meet it's first round of funding goals and has moved to WeFunder.com. They've also pushed back the movie release from 2017 to 2018. I'm actually not surprised because they seemed extremely ambitious the first time around, and by pushing it back a year I feel that they will be able to produce a much higher quality product.

Brickx: The Real Estate Investment Trap

So you're scared that you'll never buy a home? According to domain.com 20% of people will retire with a mortgage debt, and many millennials have 'given up' on ever owning a home.

To fill this void, a new company called 'Brickx' has started up. For less than $100 you can buy a single share of a rental property (known as a Brick) and get your first step on the property ladder.

I have so many problems with this product, I have decided to devote a whole post to it.

There will be no links, affiliate or others, to Brickx in this post. They get enough marketing as is, you'll be able to find them on Google. I am not recommending the product, so I won't link to it, but I do want to talk about it.

The basic concept

Real Estate Investment Trusts and Real Estate Funds are not a new concept. They come in a variety of flavours focusing on residential real estate, commercial real estate, mortgages and a mix of the three. A quick google search returns a list of 47 publicly listed REITs in Australia, this is just the first result. REITs can be traded just like shares, are incredibly liquid, and offer diversification by allowing you access to the growth and income of a variety of properties.

Brickx is different because you don't buy into an intangible trust or fund. When buying through Brickx you buy a share of a single property. Their marketing strategy aims at allowing people who cannot afford a home to 'buy' real estate. As an owner of a Brick you are entitled to a portion of the rents. And we can assume you are also responsible for the maintenance costs, which will eventuate as reduced rents.

The draw card of Brickx is that by banding with others who cannot afford a property you can get together and buy an investment. Clearly the people behind this business have never lived in a shared home if they think a group of strangers sharing responsibility for property is going to end well. Shared accountability is equal to no accountability.

Pros: Home 'ownership', rental income, a (potentially) growing asset, hands-off management

While it's clear from my introduction I have issues with Brickx, it wouldn't be a fair review without looking at the positives. Brickx allows people who cannot afford a home (yet) to invest in property. It returns the rent to the investor, claiming returns of greater than 3% (barely better than my bank account).

On top of the rent return, investors can make money by the growth of the property and given the spike in prices in Sydney this could be quite lucrative.

Brickx also manages the property for you, so once you have bought in it's a completely hands off process.

Cons: Ridiculous buy in fees, sod all diversification, hands-off management, no leveraging

Okay, and we're done being nice. Let's start with the buy in fees, because they are downright appalling. Firstly, before you even start you need to deposit $75, $10 of which is instantly lost to application fees. 13% of your investment is up in smoke before you even start. That in itself makes me want to wave my middle finger at them. Would you like to know what I paid to set up my RateSetter account? Nothing. And in April they awarded me and my readers almost $500 in sign-up bonuses.

Next is the ongoing fees. Brickx charged 1.75% for every transaction. Which looks something like this...

Purchase a brick:

Brick Value: $98.25

Fees: $1.75

Cost: $100

Brick goes up in value 1%, plus 3% rents

Brick Value: $99.74

Rental income: $2.95

Fees to sell Brick: $1.74

Return on Investment: $1.22 / 1.22%

Or for a better scenario

Brick goes up in value 2%, plus 4% rents

Brick Value: $100.22

Rental income: $3.93

Fees to sell Brick: $1.76

Return on Investment: $2.39 / 2.39%

In both cases your money would have been better sitting untouched in a bank account. That is the sign of a poorly performing investment!

Next though, is what appalls me the most in risk factors. Buying a Real Estate Investment Trust you are exposed to hundreds, if not thousands of properties. A Brick is a share in one property. If that property booms, it will be amazing for you. If that property busts, or just plain doesn't move, it will be devastating. In my above example with 2% capital growth and 4% rents (this assumes you didn't spend anything on maintenance) you made a measly 2.4% return. With zero capital growth, if you wanted to sell after a year you would would make a measly 47cents, or 0.47%. Factor in inflation and you have gone backwards.

Because Brickx handles the property day-to-day and picked the property from the start, you have no input, specifically "Brick Holders do not take an active part in managing the properties and will not be consulted for any day-to-day decisions relating to any property." As a property owner and investor this terrifies me. I have a property manager who has permission to spent up to a weeks rent on repairs. I scrutinize every piece of paperwork she sends me. Every invoice is double checked, and when work needs to be repeated I make the original workmen come back and fix it at a lower cost. Many property managers are overworked and underpaid and managing a very important investment, if you are hands off you have no way of knowing if they do a good job.

And lastly but most importantly, leveraging. Share market returns were 11.9% per annum leading up the GFC, and the current US market is double the price before the crash in 2006. Real estate in Australia is spruiked with returns ranging from 4% - 6% (and Brickx offers less). So if shares are double the return, why Real Estate? Because you can use other peoples money.

Say you put down $30,000 cash as a deposit for a $300,000 property and borrow $270,000. If that property then goes up 4%, while you are paying 4% on the loan, you spend $10,800 on interest, and obtain $12,000 in value. Your $30,000 deposit has grown by $1,200 (capital gains, minus interest).

You also probably received rent around 3% or $170p/week - leading to another $9,000 in your pocket. After fees you probably keep $8,400 (80%) which is equivalent to you $30,000 growing 28% in one year.

Obviously that is a perfect scenario, but the point is in leveraging you can use other peoples money to grow yours much faster. It also increases your risk, which is a discussion for another day. The long-winded point here is that I highly doubt you are going to find a bank willing to lend you money to buy Brickx, which removes the number one money making element behind property.

Brickx - Stud or Dud?

If you couldn't tell by now, absolute dud. I wouldn't touch them with a ten-foot pole. If you want to invest in real estate, can't afford a property and are comfortable with a shared ownership style, try a Real Estate Investment Fund. I purchased $3,000 worth of the Vanguard Australian Properties fund in April two years ago and have seen a 9.5%p/a return after fees.

So why is Brickx getting so much air time, and if they suck why am I reviewing them? Because I am flat out furious at their marketing scheme. I have seen articles, news stories and testimonials from people who were afraid they could never purchase property and are pleased to have found a way they can get on the property ladder. This is absolute bollocks. You do not own property, you have bought into a Real Estate investment with crazy high fees, a nice website and a good marketing scheme. Brickx has preyed on peoples fears that they will never be able to afford their home, and supplied a product that may very well push their investments backwards.

Beware the car salesman with the friendly grin, he works on commission and your high fees are his bread and butter.