May Expenses – Less than last month so that’s good!

Another month has rolled by and so the time has come to share my expenses with a bunch of strangers on the internet. How exciting for you!

 

Circular graph of may Spending.
May Expenses
~$270 less than last month!

So lets break it down

Mortgage – nothing new here, recent twitter poll suggests I should use my upcoming pay rise to increase the payments. I was more for spending it on beer but whatever.

Savings – Still saving a grand a month. I wish it was more. Once the bloody mortgage is dust I’m gonna be savings heaps!

Groceries – Feel like I spent a lot this month but it works out as ~$75 per person per week. My colleagues think this is about right, but they are also big spenders.  ¯\_(ツ)_/¯ Not really sure how much more I can cut from this category. (Or if I even want to make cuts!)

Everyday expenses – Well I visited my Mum which takes a whole tank of gas. Sorry mum I love you and everything but it costs me $80 a visit. Please move closer. I got an ear infection (fun!) and had to go to the doctors and buy medicated drops. On the winning side restaurant spending was cut by half as I made more of an effort to be organised with food! e.g. Packing lunches and having back up meals in the freezer.

Now I know spending money is kind of a vague category into which everything else just gets dumped but I don’t want a thousand little categories in my budget and I’m gonna tell you all the things anyway. This month I paid to have our teen boarders glasses repaired $45, Mothers day gift for my mum $40, loads of craft beer for a BBQ at my Dad’s house $38, I bought an art print $20 (that I still need to have framed) and I bought a few craft beers at various weekends. A lot of money spent on beer this past month.

Hobbies – I brewed a toasted coconut oatmeal stout, so hopefully that will cut down on the beer spending next month. I do need to get a refill for my CO2 cylinder and thats gonna cost around $4o but it lasts about a year.

Everything else – All pretty normal except for my annual credit card fee. I’m going to ring the bank and see if I can get that waived, I have a lot of lending with them so they make plenty money off me already. I topped up my rental property accounts to make sure there’s enough money for expenses. The household goods category included a new frying pan and an impulse buy of new winter blankets for everyone. Thrilling stuff.

My monthly expenses for May

So there you have it, don’t forget everything is in New Zealand dollars! A very exciting currency from the bottom of the world.

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.

Is Your Cash Working as Hard as You?

You work hard for your money, yet money sitting in the bank isn’t working hard at all. Low interest rates these days are frustrating for savers and those living off their savings (like retired folk), lucky for us inflation is also low so the value of our money is holy steady.
I feel like I worked extra hard for every dollar I saved, those dollars represent a lot of time and sacrifice. So why would I just leave them in any old savings account. Yet so many of us do! Its so easy just to park the money in whatever account our main bank offers. Now I spent almost a week researching which new sheets to buy so why not spend some time researching the options for stashing my cash!

People who work hard need to think about where to put their savings
You work hard! Don’t spend more time thinking about your coffee order than where to park that cash!

The best way to make your money grow is investing, but it also makes sense to keep some easily available in cash or to invest a portion of your money conservatively in things like term deposits.

So how can you make your cash grow in a low risk way?

Below are some idea’s which might be more relevant for New Zealanders but the point is you can’t just settle for the crappy interest rate your main bank gives you. There are other options with similar is profiles with better returns. Get out there and starting hunting out a better deal!

Shop around for term deposits. You don’t need to stick with your bank, your savings account may only offer 0.5% but there are still term deposits as high as 3.8% to be had. Interest.co.nz has lists of all banking institutions (along with their credit rating) and the term deposit interest rates they offer.

For even better returns you could look to peer 2 peer lending. It is riskier as their can be defaults but some lenders like squirrel offer loan repayment protection so if the borrower defaults you will still get your loans repaid. This makes it a very safe vehicle for investing with much higher returns, my average interest rate with squirrel is currently 8.25%. Be aware that these investments are not liquid and not really a great place to stash cash but you are paid back principal and interest on the investment each month. I mention it because It could be a useful tool for setting up a monthly income stream in retirement.

Banks are now offering cash PIE (Portfolio Investment entity) funds, these funds attract a lower rate of tax so they are a good option if you are in the top tax bracket. (The maximum PIE rate 28% tax while the top income bracket in New Zealand is 33% tax). You can have cash in on call accounts or term deposits as a PIE fund.

New Zealand's favourite PIE, Mince (beef) and cheese
New Zealand’s favourite PIE, Mince (beef) and cheese

Regular savings accounts have really low interest rates right now but if you are willing to look at alternate banks to the big names or credit unions you’ll be able to find rates as high as 3%. Some places are going to require a minimum amount saved before that interest rate applies but some places are offering great rates from the first $1 e.g. Heartland bank are offering 3% from the first dollar saved!

Bonus savings accounts can be a way for the disciplined saver to maximise their interest earnings. Usually there is bonus interest applied each month if the monthly deposit minimum is met and there are NO withdrawals. The pitfall with these types of accounts is that without the bonus interest you don’t really get a return because the base interest rate is so low. If you need to access the money for an emergency that month or to take advantage of a great investment deal you could be forfeiting most of your return.

Theres a big difference between 0.5% and 3% return, so park your cash wisely, mark sure your dollars are working as hard as they can and don’t leave potential returns on the table.

 

How I Bought My First Investment Property Using Home Equity

A lot of my friends wonder how I got started in property investmenting. They know I don’t have a ton of cash lying around, but all of sudden I have 3 rental properties. They get even more incredulous when I tell them I didn’t have a deposit for any of them. So let me tell you how I did it. Selling drugs, the mark up on meth is amazing!!! No actually, not drugs….two words – home equity.

Let me break it down into 5 steps.

Step 1) Own most of my own home. Easy right!? Now undoubtably this is actually the hardest step. In saying that about 64% of New Zealanders own their own home, not too shabby. Having your own house will provide a lot of security when you retire, but not much in the way of income. Sure it will save you heaps of having to paying for accommodation in your old age but its not going to pay your bills. That capital tied up in your home can be put to work!

Step 2) I built up equity in that house as fast as possible. (When I say fast, this took us ten years). Increasing equity means paying down the mortgage or increasing the value of the house. i.e.get in a flatmate, work overtime, make extra repayments, paint the house add a room whatever it take to get the loan to value ratio of your house down. We upped our payments as soon as the mortgage started and I’ve been inching the amount upward whenever we could afford it. When interest rates dropped we kept our repayments the same paying back more principle than ever before, so far we have shaved 13 years off a standard kiwi 30 year mortgage . The house is due for renovation and by spending wisely we could gain more equity. However I’ve put that on hold for now. The house is perfectly liveable as it is and we need to put our money to work in better ways at the moment. But if you live in a real run down house and you can improve the value by 25% I reckon go for it!

Run down room in need of painting! Renovate to gain equity!
Yeah, a lick of paint might improve the value eh….

Step 3) I talked to the bank manager about a revolving line of credit. When we moved our mortgage to Kiwibank we got a great interest rate, but because we didn’t have much of a loan (compared to everyone else I guess) they suggested we take out a line of credit/revolving mortgage as part of the deal. We wouldn’t have to spend it or use it at all but it would add to our total borrowing allowing us to qualify for a cash back offer. I didn’t let them link the revolving credit to any of our eftpos cards or accounts and so it sat, safely out of reach.

This line of credit can be used to pay the deposit on the investment property you want to buy. I mentioned that I was going to do this to bank manager and he said that idea was ok. You can also work with a mortgage broker to arrange this kind of thing for you. I did the first one myself but since then I’ve used Megin from the Loan Market to make sure I’m getting the best interest rates and cash back deals.

Now revolving mortgages/lines of credit usually have slightly higher interest rates than fixed or floating mortgages but don’t worry I’m only using the revolving credit for a short amount of time. (Less than a month usually).

Step 4) I found a house and got the banks approval to borrow 100% the value of the investment property. We have plenty of equity in our own home so the bank was willing to lend 100% of the purchase price $222,400 in this case. How much you can borrow depends on how much of your house you own i.e your equity. Currently the bank wants you to retain at least 20% equity, more if you are an investor in Auckland. This is a good thing, retaining a decent amount of equity will help protect you  of there is a downturn in the market and property values fall.

With the lending sorted I went unconditional and paid the deposit using the revolving credit facility.

House made with money
hmmm I suspect weather tightness issues

Step 5) I paid back the revolving line of credit. The drawn down loan is split between paying the remainder of the purchase price to the vendors lawyer and paying back the revolving line of credit. The mortgage is at a lower interest rate than the revolving credit so it makes sense to pay back the line of credit asap.

I’m not sure if its the best way or the “right way” and its certainly not the only way…..

And thats how I bought an investment property. I’m not sure if its the best way or the “right way” and its certainly not the only way but its how I made it happen. If you have equity in your home you have a lot of options, talk you bank, broker, accountant for advice! Personally I just tend to jump right into things and sometimes that backfires horribly, so make sure you always check with professionals about finances!

For me the downsides to this method is that properties are used as cross securities against one another (Including my main home! Risky! I’m working on doing something about this, talking to accountant about structures) and not having a deposit makes the cashflow situation a little tighter actually for two of my properties the cashflow is negative. Tauranga is down about -$20 a week and the Auckland apartment is losing about $30 a week. Argh, I should have talked to an accountant about setting up a company. It’s terrifying that I’ve leveraged my home to buy more homes, keep following this blog if you want to see if it all implodes down the line…or if the risk pays off and I can retire in ten years…

The positive side was ease of getting finance and accessing the money we’d worked hard to put into the mortgage instead of having to save a new deposit each time. Also being able to act quickly during a property boom was a huge advantage. We’ve made capital gains of well over $100,000 in one year. The revolving credit facility is still in place and we could use it to finance renovations, repairs etc if needed.

 

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.

Some Mornings I Wake up Angry

I don’t know if it is weird dreams, my cold house, the alarm going off in the pitch black, my cat insisting on waking me up at 5am with some creature she’s brought me from the garden or depression. But when that alarm goes off some mornings I am pissed off. Thats the first feeling I get for the day.

I’m angry that I’ve got to freeze my butt off getting ready for work. I’m annoyed with myself that I can’t get up any earlier than 6am and I have no time for breakfast, I shower, dress and drive to work.

I don’t mind the drive to work, I listen to National radio. It’s calming and informative with a business update at 6:45am just as I’m pulling into work. One day they’ll be like, Abano shares go up by 1000% all holders can now retire! Sometimes on the drive to work I fantasise about missing my turn off. I’ll just keep driving I think, I’ll drive to Napier, I’ll buy a house in Hastings. I’ll wander the vineyards. But I never do it. I always make that right hand turn. Queueing with the other hundred or so people that start shift at 7am.

The first thing I do at work is make coffee and make my co-workers coffee. Cause thats breakfast. Then while we all break some minor health and safety code we drink coffee at our work stations.

As you may have guessed I’m not a morning person, but coffee and some nice repetitive routine work is just the thing to bring me to life…..except I have to endure a robust dissection of last nights “bachelor” episode.

At 10:30am I’ll treat myself to breakfast and check the sharemarket. Nope, can’t retire yet.

I’ll spend some time dealing with a supplier claiming they can’t supply us with ph6 buffer anymore until I send them my approved handlers certificate. WTF (Vinegar, VINEGAR from the supermarket is more harmful than this stuff!) I scan my approved handler certs and email them off. Meanwhile my bulk chemical supplier sends me 20L drums of flammable petrochemicals with incorrect labelling. No certification required.

IMG_5165

My boss gets on my case about spelling dnagerous wrong in an email to the compliance officer. Gah sometimes I’m just smashing out emails in the few minutes I have spare between getting through all our pathology specimens for the day. Note to self …. must be mor eproffesional.

I eat some leftovers for lunch and go back to work for a few more hours.

And really its nothing to be angry about. Its just ordinary. Nothings that horrible. I’m not mistreated or underpaid (up for debate). I’m not the victim of sexual harassment or workplace bullying.

It’s just simple everyday stuff.

I’m not sure why I feel so ragey in the mornings. Maybe its a micronutrient deficiency. I kinda hope so.

I go home and spend time with my husband, he tells me of all the good things that happened to him today, we hassle the teenager about all the hair dye on the pillow cases and nag about leaving the heat on in their room with all the windows open. Cook some rare beef for dinner with a sesame sauce. Cups of tea after dinner and few laughs later I feel like a normal person.

By bedtime I’m not angry anymore.

I’m me again…… at least until 6am.

22.18% effective tax rate and Health care in New Zealand.

So my effective tax rate is currently sitting at around 22.18%. And we have a goods and service tax on almost everything we buy of 15% (housing is exempt). Those taxes cover a lot of services.

That is life in New Zealand.

After reading about so many people worrying about what they are going to do for healthcare after they retire I feel absolutely lucky to live in a country where healthcare is relatively affordable. Healthcare is largely covered by the government. (Via taxes of course.)

If you have an accident and need to see a doctor the cost is almost nothing and all the treatment thereafter is mostly covered. Accident insurance is included in the taxes that come out of your wages and if the accident is so bad that you can’t work you can get 80% of you previous salary in compensation until you are either rehabilitated or retrained for work. Accident bad enough that you need hospital care? No problem its covered. The accident can be at home, work, doing sport or whatever, you’re still covered.

A doctor visit for a medical reason ranges from free (under 13yrs are free) to about $80. (You’ll pay more for seeing a doctor after hours or on the weekend and cost varies a lot by location, e.g poor areas have cheaper fees). Most medicines are subsidised and cost around $5 per prescription.

Referrals to specialists are triaged on need. If its urgent you will get seen quickly, if not you may have to wait a while.

Likewise with any surgery in the public system. You get seen according to need. There’s not a lot wrong with that. Most New Zealander’s are fairly accepting of this kind of system. We love fairness! We don’t like seeing people get special treatment because of “who” they are or because of how much money the have. Now granted, the system aint perfect, a lot of people wait longer than they want. But its the best we can do with what we have.  It could definitely do with more funding of course! Those funds have to come from taxes and the country has to bear the cost a the end of the day. There has to be balance.

IMG_5202

Now I also have private health insurance ($21.01 a fortnight for surgical and specialist care, cheap as! It a not for profit organisation) but I only have it because I might want a private room in a fancy private hospital. Or I might want to be seen by doctor ASAP if I’m freaking out over something. It doesn’t let me skip the queue in the public system, rather there are some doctors that operate outside the public system and I can pay to see one of them privately. My money doesn’t disadvantage anyone in the public system, rather it benefits them, because I am one less person the that they would have had to queue up with for treatment. The government has considered incentivising private health insurance to reduce the pressure on the public system, but so far nothing has changed.

I’m considering dropping the insurance. The older I get, the more costly it is and is it really that necessary? I’ve started a small savings fund for health, and every five hundred dollars I save I add that as an excess (I think Americans call it a deductible) to the insurance and so my fortnightly fee drops. Eventually I hope to have enough in the fund to cover the costs of anything I might want to have done privately.

One school of thought is that if you have the money, you should pay for private treatment and ease the burden on the public system. Or even if you have the money why would you even put yourself at the mercy of the public system? To be honest, the public system has some fantastic doctors. I work in a little non specialty of healthcare and even I see specialists (earning very big dollars!) are having hip replacements on the waiting list via the public system. The care is just as good or in some cases better than private. You may not get a private room or the fanciest food but you get great surgeons and nurses.

IMG_5159

So I have to make a call, yes I can afford private healthcare insurance, but public is just as good. Private will be faster and public I’ll have to wait my turn. Its for the good of the country if I pay for private insurance, but I pay my share of taxes so why not go public…… What’s a responsible citizen with dreams of financial independence to do?

You Need a Mall Diet

The need for a new pair of work pants drove me to the mall on a Thursday. Chatter from the co-workers had led me to believe that there was usually a sale on Thursday at one of the department stores and yay they were right. 20% off woohoo. So with work pants purchase achieved I decided to have a little browse, a little wander, around the rest of the mall.

What was I thinking? Oh my, all the pretty things. Shoes, I could use another pair of shoes and winter coats are in stock, gorgeous woollen pea coats with wooden buttons. The lights were bright and the smell of doughnuts was wafting up from the food court. The new homeware store had some new funky looking cushions on display and all of sudden I was thinking about buying a new couch. I WANTED ALL THE THINGS and I hate that it made me feel like that.

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Ah the land of false desires……..

Does this ever happen to you? You go to the store to purchase something specific and find that your desires are being stimulated by all the bright lights and pretty things. When I’m at home, or work, or with my family I don’t even think about shopping or things I want. Its only if something breaks, or wears out that I begin to ponder a trip to the shops.

Lets face it, malls are desire stimulating machines, they are designed to make you browse and lust after items. Craftily staged window displays or furniture arrangements make you long for something as attractive in your own home. Theses are desires for items I didn’t even know existed until I went to the mall. How can you have a burning desire for something you didn’t even know existed until just now?! I wasn’t sitting at home yesterday thinking “damn my life would be way more complete if a I had an antique copper frame kitchen pendant light”.  The mall is a crazy place it makes me greedy and wanty!

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Attack of the mall drones. Don’t be a mall drone.

And thats why I have to severely limit my trips to malls. I am happy and content with my home and what I have until I go to a mall.

If you find yourself swayed by pretty things, if your credit card spending is out of control, then you need to go on a mall diet. We’re talking complete mall restriction!

5 ways to put yourself on a Mall diet.
  1. Shop for groceries at cheap supermarket not attached to mall. I visit our local Pak N Sav which doesn’t really have any other shops nearby. Shopping for food is a necessity so don’t let it become contaminated with the expectation of having a browse of other shops.
  2. Change your commute so you no longer drive past your favourite shops. It may take you a few minutes longer, but out of sight is out of mind.
  3. Only allow yourself to shop for replacement or worn out items. When you go to the mall you are ONLY there to find and purchase the required item. If you see something else you want put it on a list and go home. Decide later in the week if you really need the item.
  4. No more going to the mall for “fun”. No recreation browsing or window shopping. No going just to see whats new. NO. Find yourself a hobby that’s better for you than just looking at stuff you might want to buy. Shopping shouldn’t be anyones major hobby let alone something you do when you are bored.
  5. Don’t meet friends at the mall, if you want to meet for coffee or a cheap meal find somewhere stand alone, better yet, invite them to your place! There are hundreds of ways to hang out with friends that are not shopping related.

If your focus is becoming financially independent then with a mall diet and a bit of reflection eventually you’ll become immune to malls. Your desire to shop will drop away and the mall will become a rather boring place.