Quit Working – Start living.

The Quit Work for Life Manifesto.

Why am I here? Why are you here? I’m here to be financially stable and independent that I can quit my job whenever I want. I want to be in charge of my time, I want to do things that are fulfilling to me. I hope you’re here because you too can see that the future of work is unpredictable and you want more in life than giving 40+ hours a week to someone else for little reward.

Economists once predicted that due to ever increasing labour efficiency our future would be one of increased lesuire hours, less work, more family time and less stress. 

Yeah right. Missed the mark a little bit there economists……

Instead we have long commutes in cramped cities, collections of stuff that weigh us down, job satisfaction that is little comfort as we spend hours away from family only to end up with very little cash after we buy all the supposed trappings of a middle class lifestyle and all the bills are paid.

Don’t despair, there is hope

If you are under 30 and willing to be disciplined there is no reason why you can’t quit work  before 65 (retire early) and spend more quality years doing things that make you and your family happy. The older you are the trickier it gets, but there are gains to be made no matter what decade you decide to get your financial self together.

Panning out how I can quit my job
What are my core ideals and beliefs on the journey to FIRE?

I’ve only been on this early retirement train for a year or so, somedays I feel like I found it too late, other days I am filled with optimism that it won’t be long till I have the financial freedom to leave my job. I have found that I have to change my mindset in order to make progress towards the goal of financial independence and there are a few ideas that I try keep front of mind on this journey.

I recognise that my life is exchanged for cash, 1 hour at a time.

Hours are spent working for cash, it will not be squandered, my time will not be givin in vain. I will not spend my thirties acquiring trinkets and memories of hangovers so that I have to work full time for the next 35 years.

I will have options, I will have cash

I won’t let a lack of savings put me in desperate positions where I am forced to make choices based on a lack of cash. Like having to take a job I find repugnant, make an unethical choice, move my family somewhere unsafe, sell a precious item, go without top medical care etc. Emergency funds will always be available.

I will be smart with what I have.

I will make my money serve me, I will not serve money. I won’t be a slave to a wage forever. My money will be put to work and no dollar shall sit idle. I will do my research and take advice where warranted.

I will always know where I am and where I’m going.

Tracking expenses and keeping a net worth spreadsheet up to date are the housekeeping of financial independence. I shall not slack, I shall not avoid looking at bank statements and expenses.

 

These ideas will steer me towards financial independence. Or at least put me in a better position in my old age, (no cat food dinners for me). Some days it’s hard work, some days its easy, but I know I’m doing something! Better to be living with intent, than to be left wondering where it all went 10 years from now. Sure there will be temptations (omg beer), mistakes (I’m looking at you Forestlands), slip ups but when you know the path you want to be on its hard to stay lost for too long.

 

New Zealanders Hate the Sharemarket

These are eight quotes from real people about the sharemarket in New Zealand.

1) Shares are so risky – only invest what you are prepared to lose.

2) Balanced funds are a mix of shares (risk factor applies) and the management fees will cut into the profit margin. Govt bonds or fixed term deposits are cheaper options for many.

3) Basically there is NO perfect investment. In times of low interest rates, such as now, high returns are not possible unless you are prepared to risk losing your money. Shares are never a good investment for those nearing or at retirement.

4) 1987 crash cost me $62000 & the signs are there again, inflated housing prices, greedy banks, for sure I will take my Bank guaranteed interest and cant get wiped out as here(Aus) Banks are Govt backed and guaranteed.

5) The shares I bought years ago in local companies are now practically worthless. I’d like to get rid of them except it would probably cost me more in fees than I’d get back.

6) Over the years I have tried Shares, Managed funds and property but I have found that those managing the money look after themselves first and the investor second and trying to manage tenants is a nightmare. It is the investor who take all the risks. I have lost money on both shares and managed funds while those managing my money have lost nothing, so now stick to term investments with the trading Banks. Although I receive a pittance of a return, at the end of the day I can sleep at night.

7) Stockmarket is being propped up by cheap money, this doesn’t even include the money Japan is printing. The FED is pumping 85 billion a month into the financial system, kiwisaver also pushes peoples retirement funds into the stock market propping it up further. Amercan 401K’s, more stockmarket propping… This is unsustainable… I give it two to three years at most. Massive crash coming.

8) I believe foreign exchange markets are corrupt on a scale that you and I (the average kiwi) could not comprehend. NZ is a tiny blip on the radar screen of huge foreign exchanges that deal in trillions of dollars. It wouldn’t be the first time corrupt trader/s have taken the system to the brink. I would never put a single cent of my money in the stock exchange … EVER

with time we can learn to forgive the sharemarket

The 1987 crash left a huge impression on several generations of New Zealanders. Quote number one was even passed down to me by my parents and I’m barely old enough to remember 1987. I thought the sharemarket was equivalent to gambling!

It was a bad time for a lot of people, retirement savings were wiped out, people had to sell their homes. There is still a lot of deep pain and fear towards “the sharemarket” as if it were an evil entity in itself.

Just today a coworker told me that you should only use money you can afford to lose in the sharemarket. I then pointed out that 90% of her retirement savings is invested in shares via Kiwisaver. New Zealand retirement providers have not done a great job of communicating exactly what their products are to the general public. Even worse she believed those retirement savings were guaranteed by the government.  Oh dear. Kiwisaver providers, please try harder.

Sure, it can be risky if you buy stocks based on a tip from a random Uber driver whose brother just happens to work in finance, but there are ways to invest in a diversified less risky way. There’s no need to risk everything on a handful of stocks. I use index funds to gain exposure to a wide range of companies operating in different markets. Its pretty unlikely that hundreds of companies in different parts of the world will all go bankrupt.

I still hold a handful of single company shares because its fun and exciting but I’m investing in index funds for the foreseeable future. After all, owning shares is just owning a business without the hassle of having to run it.

 

The $ide effects of Fasting

I’ve been experimenting with fasting lately. For 2 reasons.

  1. My life is filled with excesses, food, entertainment, luxury, beverages, comfort. Fasting for a day is a good mental exercise in appreciation for all you have and it exercises mental discipline. Even though I’ve felt broke at points in my life I’ve never experienced scarcity of food or true hunger.
  2. I’m overweight and have a family history of type II diabetes. There is research to suggest regular fasting can help improve insulin sensitivity.

    Fasting has FIRE upsides!

    One side effect of regular fasting is the money you save. It’s one whole day a week where you don’t have to buy any food. I also don’t drink any beer or wine. No cooking means less power used in the kitchen. I also don’t particularly feel like being around food so I avoid doing any shopping or being anywhere near shops on my fasting day.

    I like to keep myself distracted from the lust for food so I’m often really productive on my fasting days, but usually in low key activities like doing the accounts, writing or doing a coding tutorial on the internet.

    I’ve noticed too that planning and thinking about meals actually takes a whole lot of mental energy. On fasting days I feel really free because I don’t have the hassle of organising meals.

    When fasting, drink lots of water
    mmmmmmmm Water, or as I call it……Dinner

Fasting may seem a little extreme. I see it as having a bit in common with FIRE philosophies. A little sacrifice for better health is just like saving now for future wealth. I deny myself fancy cars because I know it would be bad for my financial goals and I’ll deny myself dinner once a week because I know its doing wonders for my insulin sensitivity.

Fasting is seen as a bit fringe in my social circle, so is the idea of retiring early. Both ideas are going a little against the norm. I don’t tell my coworkers I’m fasting and I don’t talk about my plans to retire early. It does seem that most of the “retire early” crowd I read about online have really open minds and are keen experimenters. I like to think I’m open to new ideas too, It’s why I didn’t go “Retire early? That’s impossible” when I first read about the concept. So I’ll continue with the weekly fast and the weekly savings, short term sacrifices for long term gains.

Small Time Dividends – Don’t let them Escape!

Today I got my Abano Healthcare dividend. It was approximately $29 or enough to buy a 6 pack of craft beer and 500ml bottle of something special on the side. Yum! But drinking my profits was never the plan (well one day maybe).

Abano Health share price graph
Its been a fun 6 months or so, I bought in around $6.70, thanks Abano

So no beer for me because I have the dividend re-investment plan activated. My money has automagically turned into 3 more shares. Every 6 months the dividends are used to purchase more shares on my behalf and any remaining money is rolled over till the next 6 months.

Dividend re-investment plans work really well in New Zealand for a couple of reasons.

  1. We currently  have no capital gains tax. This means that these small amounts of money aren’t going to become a pain in your ass years down the track when you need to calculate your capital gains on all the small share buys.
  2. Brokerage fees here are really HIGH! It costs a lot to make a trade so anytime you can buy shares for free is a win in my book.

So if you’ve been wondering what to do with all your little dividends get online and check if the company has a DRP or Dividend re-investment program. Its way better than receiving a cheque (argh so inconvenient!) or having the measly $29 sit in your account doing nothing and not earning its keep. Dividend re-investment is already happening for most of you in your kiwisaver accounts and probably in your index funds as well (unless you checked the dividend pay out box!).

Out of sight out of mind, it happens with out any extra input and that tiny dividend is no longer tempting you to buy some craft beer that your waistline doesn’t need! Make sure your money makes you more money by keeping it invested. It’s the aim of the FIRE game and it will get you the the finish line faster.

 

Frivolous Investments

I guess I must be feeling pretty flush because I just dropped $500 on a share in a craft brewery. As far as frivolous investments go this is pretty high on the list.

Parrotdog put out the call for 2 million dollars to upgrade their brewery to a new location with a taproom and takeaway sales. Being the craft beer lover that I am how could I resist? I love craft beer! Owning part of a brewery is like a dream come true. My share doesn’t quite entitle me to drink for free but I do get 10% off all online and takeaway orders.

However after looking over the share offer I found myself feeling a lot less optimistic about their projected growth than Parrotdog brewery. Their projected sales seem too good to true even with New Zealand’s exploding craft beer scene.

Consider this graph for instance, projections like this usually have me running of the hills! Which hills? I dunno, the safety hills?

Screenshot 2016-08-20 18.21.05

But I still made the purchase because craft beer is a hobby and it brings me joy. The creativity and camaraderie in the New Zealand industry is inspiring and its becoming less fringe and more mainstream by the day.

The investment was made knowing that it might never be worth more than $500 and it might even be worth less! I am at a point in my life where I can afford to throw $500 at a pet project, its like lending $500 to your brother in law to start a business….lets just call it a donation and not worry about ever seeing that money again.

Screenshot 2016-08-20 18.35.50

$500 is currently 0.083% of my current net worth but if I was only just starting the journey to FIRE and $500 was 1% of my net worth I don’t think I would risk it.

With crowdfunding platforms the world over becoming more popular these kinds of private off market listings are a lot easier for everyday folk to find and throw cash at. While its exciting to be part of these smaller businesses and start-ups the risks can be a lot higher and there seems to be less regulation. Its my first time investing in a company off market like this, so I’ll let you know how it works out. In the meantime, please purchase ParrotDog beer!

I’ve Paid off my Maxed out Credit card – Twice!

Some lessons in life are hard to learn. So hard that you have to learn them twice. Credit card management is definitely one of them.

The first credit card I got was handed over to me with little ceremony when I was a student. It was my second year and I’d moved out of the halls of residence and into my very first flat on Cook st.

My campus had a branch of the National bank down by the (man-made) lake (full of huge eels that would eat the baby ducks) and students were eligible for an interest free $1000 overdraft and a credit card with a $500 limit. For a broke student it was just free money, I figured it would be easy to pay back once I graduated and started earning my kick ass amazingly high wage. (Yeah right, turns out science graduates aren’t nearly as in demand as I thought).

Some of the $1000 went on text books, I bought a woolen electric underblankets (it was a cold town!) and heaps of beer, takeways and …….. well I can’t really remember where the rest of it went. It just went! I probably bought CD’s and cool posters for my room.

Poster- Picasso Print

It wasn’t long before everything was maxed out. Each week my student allowance came in plus a little side income from working in a lab downtown. I paid my rent and everything else went into the overdraft but before the next pay day the overdraft was maxed out again. It wasn’t till a I finished university and finally got a full time job that I was able to pay it all back. Each fortnight I had to call the bank and ask them to reduce the overdraft by a measly $50. I learned the overdraft lesson and never used one ever again. The weeks dragging by and the embarrassing calls to my banking manger left a lasting impression.

The credit card however had no such lesson, the payments to visa were to this vague external entity. I never met anyone from visa and I never had to call. In fact I think they even increased my limit once I started working full time.

Fast forward to 7 years later and I was still always carrying a credit card balance. I thought it was normal. By now I had a limit of $3000 and things were getting dangerously close to that limit. The first hint that I wasn’t exactly managing things was when I made my first call to visa. I wanted a limit increase for a trip to vegas “just in case”. Just in case what I’ll never know because they turned me down. I had made a large cash withdrawal the week before. I mistakenly paid too much off the card that fortnight and hadn’t calculated enough reserves to make rent! The bank wasn’t too impressed with my money management skills.

After the trip added even more debt to my card I decided I had to tackle the debt. Each pay day I paid the bills that had to be in cash (e.g rent) then every single left over dollar went on the credit card. No cash left in checking, everything was now on the credit card. It was a huge payment and each payday bought the promise of progress. But I still had groceries and petrol to buy so I would use the credit card. It was a 3 steps forward 2 steps back kind of deal but I got there in the end.

The second time I maxed out my credit card was way worse. It involved spending money on family, spending more than I earned on day to day expenses and having nothing to show for $12,000 worth of debt. Yep twelve grand. It happened over several years. I didn’t buy myself clothes or gadgets or things like that. But I bought movie tickets, takeaway pizza’s, groceries, dinners out and a trip to the Gold coast for my partner and their children. So in the end I had massive debt and no assets to show for it. Deeply ashamed I hid my debt from everyone. I carried on as if everything was normal with this huge debt anxiety in the background.

This time I transferred the debt to a credit card with 0% interest for the first 6 months. After 6 months I transferred to a card with the same bank with a low interest rate (about 1/2 the standard rate). It took me about 3 years to get it under control. During those years I paid my mortgage and invested in kiwisaver. I bought shares but I didn’t mange any cash savings. Once I got the balance down to $1000 I started to save cash. Actual cash reserves. Looking back I was lucky to have a good paying job and to manage the rest of my money so I never got behind in repayments. It never became an “issue” or stopped me from being able to afford rent, power, food etc. It could have been a lot worse.

Now I pay the balance in full on my card every time I get paid. Transfer over enough money to zero that balance and sometimes it hurts the checking account a little because I’ve spent more than I thought. Even now spending on the plastic doesn’t trigger the feeling of spending my own money. Its a future me problem not a today me problem.

So thats my consumer debt story, going through the painful repayment process taught me a lot about money and how I interact with with it. So for that I am grateful. (Obviously I would rather not have spent the money and have it investments but we’ve always got to look for the silver lining).

 

 

 

Fees – The Stealthy Kiwisaver Killer

“An investor with $1.00 invested in 1900 would have seen his dollar grow to over $1,000 in real terms, if they had paid the industry average of 3% in management, monitoring, performance and trading fees then the real terminal sum would drop to just $37.40”

The New Zealand sharemarket on average has returned 10.0% p.a from 1900 to 2015 (Yes, we are awesome, send us all your moneys). If you invested $1 in 1900 in shares with no ongoing fees you would have around $64,000 in today’s dollars or $1027 adjusted for inflation. In a fund with fee’s you would only have $37. Staggering difference. Would you rather have $37 or $1027? It’s a no brainer.

If you only read this one line then know this – Fees matter!

I only know this little tidbit of wisdom because Brent Sheather wrote a brilliant opinion piece for the NZ Herald titled “NZ shares vs the rest of the world”, within the article are some sparkling gems of information and the one that stood the most was the topic of fees. In fact the article should have been called “Kiwisaver Fees and how they’re stealing your retirement!” and maybe it would have got a bit more attention.

Kiwisaver accounts (and managed funds) are charging us huge fees for managing our money and fair enough you may argue. Nothing in life is free. But when Kingfisher funds can pay themselves a 1 million dollar performance fee payment on a fund that only returned 4.3% (the sharemarket returned 16.5% over the same period) then something is horribly wrong.

Shadow hoping and praying for ethical money mangers
Hope like hell you have an ethical Kiwisaver provider!

Consumers of investment “products” are not always getting value for money and are not always aware of how the fees are charged. We are all  very trusting of our Kiwisaver providers to do the right thing by us, they are the custodians of our futures, determining by their stewardship just how much money we will have to spend during our golden years. But they are clearly making bank along the way, taking a % cut of our total savings each year.

I’d like to think that the fee’s would only come out of the profits or gains that the fund makes but sadly this is not the case. That scenario could leave providers making zero dollars in recession years. There are obviously baseline costs for administering funds that need to be covered so performance only fees are not entirely fair either, but does it cost anymore to manage $1 million in kiwisaver funds than to manage ten thousand? The money is all going into large generic funds and individuals are not receiving personalised investment services. So shouldn’t each customer pay a flat fee? But this would penalise those with smaller amounts invested. Perhaps percentage fees up till a certain amount invested then a flat fee there after?

I’m not sure what the best way to go is, but I can tell you I’ve had excellent returns from very low fee index funds and like Brent says, the computer managing it has never paid itself a one million dollar performance fee for barely beating inflation.

I checked out Sorted.org’s fund comparison tool and found the lowest fee’s for a kiwsaver fund was 0.31% for the Superlife NZ50 ETF (which returned 12.75% in the last year, nice). The highest fee’s charged are 4.74% for NZ funds Growth Strategy fund (-10.9% return in the last year but to be fair a +22% the year before that). That’s a massive range of fee’s and returns, clearly it pays to dig a little deeper and find out exactly what fees you are paying.

If consumers want change then its going to have to be demand driven. Start comparing funds, look hard at those fees and be prepared to move your money to a lower cost fund. If you do switch, let your fund manager know why! Let family and friends know that fee’s are a really important consideration when choosing their Kiwisaver provider or any investment fund. (Cause everyone loves talking money with family and friends right!)

Luckily the Financial Markets Authority is on our side as Tasman Parker reported this week in the NZ Herald. Her article “FMA warns – don’t treat KiwiSavers as ‘cash cows'” reported on several concerns of the FMA including fees and lack of confidence from kiwisaver investors in the market.

Rob Everett, chief executive of the Financial Markets Authority, said KiwiSaver providers could not afford to treat members as “cash cows” raking in millions of dollars in fees a year without doing anything to communicate with them other than the minimum.

 

You tell em Rob!! We need institutions to challenge the big providers to do better, the more pressure the better.

My Second Property Investment and How it Also Sucks!

Sometimes I think I’m just too stupid to be property investing. I’ve always said “Learn by doing and then learn some more by failing” well I’m certainly learning a lot this year.

Lucky for me it’s a rising property market and for now my idiotic purchases are being smoothed over by ever increasing property values.

They story begins last July when I got it in my head that I wanted an apartment in the city.

Oh geez why the hell did you think that was a good idea?

Because it was cool and if we moved out of town we’d always have a place in Auckland to use as a base. I spent a month looking and it was just doing my head in. So many open homes. Parking in the city zipping from building to building. I went to an Auction and got outbid by $200,000 (the market was and still is exploding) for a very dated (but excellent location) apartment. My only key criteria was that it had to have car park.

Anyway I’d all but given up on finding a place when a canny realestate agent gave me a call and asked me to come look at apartment. I told him no, I’d refocused my search to Tauranga and I wasn’t looking anymore, but he was persuasive and offered to drive me there himself so I took the bait. He showed me two apartments in the same building, one was vacant and one had a tenant but it was under rented.

The vacant apartment was really nicely staged, I was swayed by cheap furniture and borrowed artwork. Fresh paint and new (cheap) carpet also added to the illusion of a quality apartment. It had all shiny new appliances and had the appearance of luxury.

Photo of staged apartment with modern furniture.
Look how pretty it is!

I decided to make an offer because I thought I could get this place at a reasonable price, all the talk by the agents lead me to believe the vendor wanted a quick sale and that I seeing it first before anyone else so I should get an offer in before the open home that weekend.

Of course it was all talk.

So with a lot of back and forth and agents driving me sale and purchase agreements across town at 7pm to create a aura of urgency and importance we finally settled on a price of 447,500 for a 1 bedroom 67m² apartment with a carpark.

The bank very wisely insisted on a valuation and that came back at 455,000. (Amazingly!). The agents had also “thoughtfully” provided me with a rental asessment of $500-550 per week. I ran my numbers optimistically on a middle figure of $525 and figured it would break even.

I later learned that the place had been bought 1 month before  by the vendor for $390,500 so they made a tidy profit. Even my initial offer would have left them with a tidy sum. The agents were damn good at their job, the whole time making out like they were helping me get the apartment I wanted while driving up the price for the vendor.

Renting it out took a few weeks, it shouldn’t have but the property manager got sick and didn’t really get round to asking any of her colleagues to take over the showings. Then the rent achieved was only $500. I was pretty surprised, but it was my own fault. I trusted the supplied rental assessment and I didn’t do my homework. I didn’t research rental prices in the building or get and independent rental asessment. Unforgivable really when so many property managers will do one for free (in the hopes of getting your business I suppose.)

But there have been some amazing upsides to owning the apartment. The lack of maintenance compared to my other properties is quite a relief. Everything is taken care of by the body corp fees and those fees cover insurance. It really is hassle free. While it was vacant I got to use the car park. That was fun.

The Numbers

Mortgage payments: $22,921
Rental income: $26,000
Body Corp Fees: $3,406
Rates: $1,236

That works out to a nice tidy loss of $1,563 a year. Yes thats right I actually purchased a $1563 debt every year. Are you keeping track of how much money I’m loosing this year? My other rental property is losing $1054. So far thats a grand total of $2617 per annum. Or $50.32 a week. That is starting to hurt my cashflow!

Properties which cost money to hold are not an investment. However, the rising market and capital gains are increasing my net worth. But buying houses with the hope of values going up makes me a speculator and not a very good one. Buying properties that break even are not investments either. Unfortunately I am damn stubborn. I refuse to let it go. So I eat the loss wait for a day when the damn place actually makes me some money.

Any good news?

Well interest rates are low, and getting lower. I split the loan into 3 parts and each will roll onto a lower interest rate in the near future.

Rents are apparently rising. So they tell me. But I really feel that $500 a week is still a fair rent for the property. I will get a professional rental assessment when the tenants fixed term contract ends.

It will only take an increase of $30 a week or a reduction in expenses of $30 a week to make this place break even. I’m pretty sure I can achieve that in the near future..

So what are the lessons here?

Four main things I learned from this purchase.

Real estate agents work for the vendor – Not you! If they appear to be helping you get the deal done, take a step back, is it really in your best interests?

All that glitters is not gold. Staging makes a place look way fancier that it is. Whats lurking when all the glam is gone?

Get independent rental assessments and use the lower figure for running your numbers. Rental assessments, in my opinion, are usually inflated.

Set yourself some criteria. Without criteria its easy to get talked into buying something that won’t work for you. If I was buying an apartment again, it would be, carpark, views, natural light, sound proof.

April Expenses – You know you want to be nosy!

Screenshot 2016-05-01 13.31.02

Ah yes another fine month of spending all my money. Although I managed to spend less than last month so thats a win.

Home Repairs and Maintenance – This month we had to get the home ventilation filters changed. We have HRV for home ventilation and they charge a lot for servicing every two years. I could do it myself, its a simple matter of climbing in the roof around all the insulation and changing two filters….but I don’t. Also I bought a voucher on Grabone to have our heat pump serviced as well. Once again probably something I could do myself.

Spending Money – Stepsons birthday! His band played at a local bar and I shouted him and his brother quite a few rounds of drinks. I bought a car charger for my cell phone and gave the kids some money for gas. Confession……I also bought a lotto ticket!

I did not win.

The disappointment was not worth the $9.60

Restaurants – Shameful amount spent on eating out of the house. Its amazing how quickly that adds up. $30 for pizza one night I was to tired to cook and $30 taking our teenage boarder out to lunch during her term break. Then $140 over the month on snacks and work lunches. These Damn food trucks have started parking up near work. Delicious.

Clothing – One pair of work pants for me and a pair of work pants for other stepson. Including the cost of posting them to him.

Property Expenses – Exciting times, I am buying a house in Hamilton, quite possibly the cheapest house in Hamilton and possibly only the 3rd worst house in Hamilton. (Its definitely a do up!) Some of the costs of due diligence are in this category (e.g methamphetamine test, deposit for lawyer).  My lovely mortgage broker Megin has negotiated some cash back on the mortgage so I should be able to refund myself these expenses.

And the rest is all pretty standard stuff. I spent very little on petrol this month. So thats a win! And I may have found a free parking spot close to work. So hopefully I can cut down on that expense.

Screenshot 2016-05-01 13.41.54

Between the restaurants and spending money categories I am spending $100 a week. Its like I have a $100 a week allowance for whatever I want. What do you reckon? Too high? It works out at around 6% of the total spending (but the mortgage payments really skew the total monthly spend).

April Dividend Income

New Zealand is weird and quirky, a little different compared to the rest of the world.

Most companies put out half year results in March and September and dividends are paid the following month in April and October. So with a few exceptions I only receive dividends twice a year.

Individual Stocks
Auckland International Airport $14.32
Metlife $3.56
PGG Wrightson $49.83
Michael Hill International $30.97
Mighty River Power $44.13
Meridian Energy $99.90

Total $242.71

Index Funds

Smart MDZ (NZ mid cap companies) $98.01
Smart MZY (AUS mid cap companies) $31.08

Total $129.09

(The smart funds are local low fee index funds. They allow for monthly investments at no extra cost so its easy to invest a little every month.)

So all up $371.80 (this is the after tax amount). Not quite enough to retire on just yet. Everything stays in the brokerage account and is reinvested. I figure if I can increase this return by a factor of ten I’ll be damn close to retiring. I’m fairly heavily weighted in energy stocks. Those companies used to be government owned, then our government was all like “Hurrr duuuuh these assets are making us too much money, lets sell half to whoever want to buy them.” So we raided our savings. They are good companies (mostly clean energy, hydro and geothermal), but they should have stayed state owned. Those dividends could buy a lot of schools and healthcare.

nature-1436732866NMV

I don’t understand the reasoning  for selling off income producing assets. Most of the country was pretty pissed off about it at the time.  Anyway I felt a sense of national obligation to buy them which is probably just what the government anticipated. They’ve been good income earners, can’t complain so far.