23 February 2014

How not to live off 80k

I don't really understand people who are hopeless with money, but then I don't understand a lot of people (like Greens voters)

Jenni Ryall is a News writer on a 12 week course to stop being a financial disaster - stop getting taxis everywhere, kick the $10 a day coffee habit etc etc - this week's lesson is (extremely crude) budgeting, or at least a cash flow statement

Everyone needs a budget, doesn't have to be written down, but it helps - my concern with Jenni's article is that she thinks 'Jim's' fictional budget below is a way of 'dominating life'How your graph should look: Jim’s yearly expenses.
So, on a post-tax income of 60k (which is roughly an above average salary of 80k) 'Jim' has 1k in assets at the end of the year - quite possibly to be used for the 'yay-no-debt' party

Now, if you were doing this off a 40k salary, which is just above min wage, then that would be a reasonable result, particularly if you were working towards a pay rise, but 80k is a decent salary to most Australians, it's more than about 80% of all ozzies earn and therefore may represent the peak earning capacity of a lot of people (source) - Jim is buggered if he loses his job (is he a journalist too??), probably needs debt to go on a holiday and is likely facing work til he's 70 (or 80 at the current rate of change) and will be reliant on his minimum super contributions and will probably rely on the pension (but then again...YOLO!)

Not fun in my view, it always amazes me the amount of 30-somethings that simply piss money up the wall, mostly in the form of rent - why is Jim spending over 25k of a single income on rent? Jim likes 3 bedrooms to himself? My whole house would get less than that on the rental market

Maybe he's a sole breadwinner of a family of 4, maybe, but still, 25k is about the yearly cost of interest on a $500k mortgage at current rates - even with the current market, get your own unit with a 3 or 400k mortgage and you're not only saving on your expenses, you're building an asset with excellent growth prospects - why are you surrending more than you need to someone else's income stream?

Secondly, this guy spends over $7000 on a car loan, which could have a 3 or 5 year term and you would hope, therefore, was a new car, and yet he spends $1000 on maintenance per year

Want to know how much I spent on maintaining my 13 year old car last year? - $1300, that was for a major scheduled work, obviously as the car gets older I am exposed to greater likely costs, but such costs are weighed against the utility of the vehicle and the savings I get from not needing to buy a car (which is basically a huge expense, not a store of wealth)

Now while petrol is obviously varied on circumstances, for some reason this guy pays over $2500 on insurance and CTP, more than 50% what I paid last year, so it must be a nice car, that apparently is out of warranty and breaks down a fair bit (Alfa??), he's spending about 15% of his income just on owning the car, the petrol on top of that takes it to over 20%

Combine with the rent, the two basic items of his shelter and car cost him 62% of his income - this is a moderately high income earner and we haven't even got to food yet...

'Transport' bizarrely is again nearly $2k, this is possibly related to Jenni's taxis, or could be the train/bus/tram, but again, the obvious question is raised that why would you spend so much on a car when other forms of transport cost you so much?

So we're now left with about 35% of Jim's income to pay for stuff that isn't related to going from A to B or keeping a roof over his head - food is pretty reasonable, in fact most of his other costs are pretty good - even the clothing budget, probably because he's giving over half of his income to his landlord and the bank

The major exception is entertainment costs - Jenni apparently spends 25% of her income on this, Jim spends $125 every week and this is only 10% so god knows what she is doing

To be honest this is a reasonable figure to work with, budgeting shouldn't be about cutting back on the enjoyable parts of life - maybe try limiting yourself to $100 a week, but really, the rent and car costs should be the red flags

Likewise, the $7 a day coffee habit and $100 in bank fees are simply waste, drop them

If Jim was to spend $7000 on a used car this year (not great, but remember he has no money, so deal with it) next year he would instantly have $7000 to invest, along with savings from using the cheap work coffee and kicking pointless fees he'd be close to 10k a year surplus with minimal fuss - he could then save for a deposit, invest in property, cut his rent expenses substantially and start increasing equity

Alternatively, do what my single mates do and share a rental - only a sole-income family man would need to pay that much himself, instant 15k saving right there - he could even buy the unit, let it out to another 2 people and let them pay his mortgage...

The truth is, you really only need about 30k or 40k to 'live' - I think that's where the poverty line was drawn in Australia last time I checked, but a lot of 'wealthy' people spend so much on flash cars, eating out and general crap that the lowly shop floor workers are actually worth more - I happened to see my boss' savings target recently, and I'm worth many times more (he's older, we're both DINKs) - simply because the gap between my income and expenses is so much bigger than his, despite him earning maybe 30% more than me

As for this daft series, the fact that the whole purpose is to get you to spend $36 on a 12-week frugality course should ring alarm bells, creating wealth really is quite easy:

If you really are hopeless - put your payslip into 3 (or more accounts), set your budget and your savings goals, then put the money for your bills and essentials in one, 'fun' money in the other, and a set amount in the other as savings - treat that last amount as if you don't even have it, live off the reduced income and it does the work for you

16 September 2013

On tonight's panel...?

Finally, Media Watch has a pop at the left, hitting both the ABC and Fairfax in one show


Would it be curmudgeonly of me to point out that it's rather convenient that this sudden change in editorial line happened just after the election? In the interests of fairness I will give Barry credit for attacking the other side, but it is also a fair point that there have been at least half a dozen attacks on Murdoch vs one on the ABC/Fairfax - so 'needs improvement' but getting there perhaps

Incidentally I couldn't really care less if an ABC show photo-shopped a News Limited journo into having sex with a dog, but to me it's clear that this sort of 'joke' (which was only amusing if you revel in seeing your opponents mocked) is evidence of a left-wing mentality, the Chaser are well to the left and I don't think that's disputed, and strictly speaking there's nothing wrong with them leaning in their comedy (outside an election special on a state-funded broadcaster, I should add), they can hide behind the line that some people won't like certain jokes if they want, although I'd disagree that it was actually satire

Their continued promotion by the ABC when they aren't particularly popular any more, however, says quite a lot about the management and culture at the organisation

But onto my main point tonight - following on from a reasonable Media Watch, we were introduced to the Q&A panel - featuring no government or opposition spokesmen (normally a good thing), or even journalists:

Clive Palmer - ok, definitely independent
Nick Xenophon - can fairly be described as a centrist
Larissa Waters (Greens) - because it's not like they get on with the main parties regularly anyway?
David Williamson - a playwright critical of Murdoch
Rebecca Huntley - a research director
Mark Latham - former federal Labor leader

Hmm, worrying...

First point - Latham is hardly independent, he's not a member of the opposition, and he likes writing bad things about his former colleagues, but he is very much a Labor man

'Playwright' always rings alarm bells, David Williamson went on to confirm my suspicions by admitting he was a "leftie" and harping on about socialism and Australia's Gini coefficient (which is significantly better than America's, David)

You never know, Rebecca Huntley might research economics, but alas no, even her bio lists her as "[formerly] involved in ALP politics, working for numerous federal politicians. She was a member of the National Committee of Emily’s List and the ALP’s federal policy committee"

So, unlikely to see much liberal/conservative viewpoints being bandied around there, with a Green thrown in and Xenophon a self-confessed centrist that left any pro-market, pro-business views pretty much to the affable, eccentric Palmer (and maybe Latham as he is at least an economic rationalist)

In what world is this balanced? We have just changed to a Liberal government with a clear majority and Q&A has three panelists who are openly left wing and hostile to the new government, another who is a former Labor leader and essentially no serious voices from the economic right

I just don't understand how this can pass for balance, for starters even if you trot out the letter-of-the-law political party rule, it's odd that the Greens are formally represented as everyone else is either independent or a micro-party, the Greens are regularly featured with the main parties and were part of a coalition government mere months ago

Secondly, two others are former ALP members, and the other effectively admitted being a lifelong ALP voter (or Green, maybe), only one of the remaining two could be considered to have links to the Liberals leaving a four to one balance if you're using any sort of common sense

Sorry but saying 'they're all independent of parties' (except the Greens obviously) just doesn't wash, it's blatant - there was criticism of Murdoch, free markets and Tony Abbott and much support of socialism without any reply - there were no rebuttals from the right (as the sole champion, Clive can say what he likes and avoided any such argument)

Whatever, I, as always, wish to leave it up to the market to decide...not that it really helps...

10 September 2013

Gittins: Labor's problems are all in our minds

I'm not going to waste too much time commenting on Ross Gittins' strange view that we have an unconscious bias that Liberals are better at running the economy

The whole story is based on the poll question 'who is better at managing the economy?' The standout point for me was this:

There was a time during the term of the Hawke-Keating government when the economy was doing well and Labor was ahead on this question. But such times are the exception. Normally, Labor judges its success just by the extent to which it has narrowed the gap with the Libs.

So we all love the Libs, except when Labor actually do run it well, the concept of Occam's razor springs to mind. In the 41 years since Whitlam came to power there have been three periods of Labor government (cumulatively longer than Liberals) - Whitlam, which ended in a constitutional crisis, the well-regarded Hawke-Keating era which lasted about 13 years, and the Rudd-Gillard period which wasn't quite so successful

It couldn't just be that people actually hold conscious opinions on a government's performance? Likewise the fact that Liberals, who favour free markets and appeal to 'battlers', and Labor, who favour trade unions, are judged differently on the economy, is not surprising. My economics text book did not exactly regard trade unions as good for markets, but no no, it's because the Libs are the 'bosses', not the workers (never mind that Labor abandoned most 'workers' for welfare recipients and hippies before Howard)

Gittins also claims that the budget and boat people crises are 'over' - first I'd point out that it's hardly unreasonable for one party to play on two of their key strengths - border control and the economy, much as Labor will soon play on IR and public services, Labor had plenty of crises for when they were last in opposition, such as the evil inhuman border control policy - and yet in power the screaming lefties went away and the new government actually supported Liberal policy (no doubt they'll be back now Tony's in), both sides are guilty of hypocrisy when they are on the easier side of parliament, it's called a point of difference and is hardly indicative of unconscious love of 'the bosses'

Secondly, the crises not over, but surprisingly enough, when there's a new government you tend to give them a little bit of a chance (say, at least a week...) before jumping down their throats and demanding the boats stop now - ultimately there's only two choices for government and it would be rather silly to demand a change before they are sworn in...

I'd agree 'crisis' is hyperbole, but that's politics, which I'm fairly certain we could find from Labor, ultimately while we may not be in Weimar Germany the Australian people do not like the idea of spending more than they earn, they also don't like being lied to constantly and having the government fail to deliver their promises time after time (this hilariously is also the fault of our unconscious bias again), the British and Europeans were complacent about their huge levels of debt for decades (I'd never heard of a government running a surplus until I came to Australia), and look where that ended up

In short, weak drivel from Ross that appeals to the far left

I'd also make the point that this is clearly apologetic to Labor, it's simply an opinion with little empirical evidence (if any?) and therefore it's as biased as the Telegraph's daily attacks on Labor, which cause such a problem for the ABC and Labor

Yet, you don't hear people complaining much about it - I know Fairfax is biased, great, that's why I don't read it, rather than trying to censor it or running ads trying to get it to say what I want

It wasn't the Tele that won it

But don't tell Paul Barry that, in his latest epistle he provides a mock-up of the famous Sun headline from 1992 (again)

Now, aside from the issue that Barry has now twice used a 20-year old story from another country to beat Murdoch with, which suggests an obsession rather than contemporary media analysis, the idea that we'll never know if the Murdoch papers won it is a fantasy

The Telegraph, who according to Barry, are the worst of the Murdoch press only 'won' 4 seats in NSW, they may yet gain another 3 in unconfirmed results - while they've taken 2 (out of 4) in Tasmania, 3 in Victoria and potentially only one from Queensland (which has the second naughtiest Murdoch paper)

They could've won without NSW, although it would've been pretty strange to not pick up anything in the nation's biggest state - in fact the swing against Labour was below the national average, at a meagre 2.99%

The states where Labor really crashed were Victoria, the only state which had a Fairfax paper actually support it (not that you would know that if you listened to Barry), Tasmania and South Australia, all traditional Labor strongholds

Any simple analysis would show that the impact of Murdoch's papers was limited at best, in fact there seems to have been a negative correlation - with the Labor supporting Age creating the biggest mainland swing, and the single paper state of Queensland barely losing a seat

This is, to be honest, extremely poor from the ABC - while you might be able to attempt to justify Barry's weekly commentary on the bias of a populist daily tabloid as a fair cop, but boring, the suggestion that the Telegraph had a significant impact on the federal result just doesn't stack up with the facts, it's lazy and quite clearly biased

Arguably it's evidence of ABC 'group-think', where they decide that people must surely agree with them and Murdoch and his tabloids are trashing the awesome Labor government - no need to actually review their assertion that the Tele could've won it when three other states had bigger results

They also don't seem to have been able to stop the woeful Western Sydney Liberal candidate Jayme Diaz providing Labor with one of their only swings towards them, odd that...

For the sake of balance Barry also mentioned an anti-Murdoch 'GetUp' ad that went 'huge' on social media (the importance of which is contestable, and another weird ABC obsession) that the commercial broadcasters refused to air

I'm sure they refuse to run all kinds of things, but GetUp say that this is an outrageous breach of their free speech (why?) and Barry again twists the story to suit himself, saying that the non-Murdoch channels don't want to make an enemy, his view, not anyone else's

It couldn't just be that they felt it was in their commercial interests not to run the ad? It couldn't just be that commercial networks aren't a platform for free speech that they can actually use their own networks to act in their own interests? It couldn't be that Fairfax also refused to accept it as a paid ad?

Arguably there is a media story in this case - the commercial networks (and Fairfax) once again not running a far-left political ad*, but it's very convenient that the Media Watch subject matter was Murdoch, after a whole episode..about Murdoch

My thanks to Andrew Bolt for the screen grab of the dummy front page, he has effectively written the same article as me and I probably just should've saved time and read that before making my own post - but as an aside he points out that 6 (of 10, I think) have been focused on News corp - we should start making those graphs that Barry uses every week to judge the Tele

From memory, I think the others have only focused on vested commercial interests in tabloid television and beating up 'shock jocks' - how many have focused on Fairfax or the ABC...or are they just that good?

*The ad was a strange one, featuring a man criticising the Courier Mail's editorial stance against Labor and using it to clean up his dog's mess, saying that we're all entitled to our opinions, you know free speech and all, but then saying it's not on for Murdoch to put one in his papers

It doesn't make a lot of sense - to me, the ad seems to imply you must receive the Courier Mail and it must provide objective 'news' - yet in reality you choose to subscribe to it, does that man think it's some form of state funded newspaper he has to receive?

He's wasting his money on expensive doggy bags, difference is we don't have to with Media Watch...

26 August 2013

Let's just rename it Murdoch Watch and be done with it

Another week, another full episode on News Ltd and the Daily Telegraph - I'm getting boring, but so is Paul Barry

This week it's makeup-gate - the story that a make up artist called Kevin Rudd rude on Facebook and this led to six articles in the Telegraph...cue investigation!

Was the Telegraph the only media outlet to cover the Make-up artist 'story' - absolutely not, but it was a convenient excuse to lay into the Daily Telegraph, rather than say, the Sydney Morning Herald

Fact is, everyone covered it, TV, radio, and all the papers, the story became part of the 'narrative' - that being the one that says Rudd is a vicious, nasty, little man

That is a narrative that has existed for several years - it's built on quotes and stories from his own colleagues, the leaks he was responsible for throughout the Gillard era and his often tetchy public displays

No doubt the right wing are going to hammer this narrative a lot more than Fairfax and the ABC but this is simply how 21st century 24hr sound bite political news works, it's cruel and a lot of the time bloody stupid - but the politicians' play it just as much as the media do, only Labour started whingeing about the 'hate media' when they suddenly lost favour

They also asked for this kind of debate, running negative, personal ads and refusing to engage in any meaningful policy debate (and I'm talking about both sides here) - the press need to fill pages every day, and they knows what sells

Yes, the Telegraph is biased, News Corp is biased - we know this, and you could pick up the Telegraph on any day of the year and find crap...it's a tabloid

But is it really a worthwhile pursuit providing a running commentary on a poorly written, populist newspaper every week?

Despite the howling from the left, it has no mandate to be impartial, unlike the ABC, it is simply a commercial enterprise seeking profit, governed by traditional libel laws and is entitled to preach its opinions to anyone willing to pay for them

When there is so much criticism of left-wing bias at the ABC, which is mandated to be impartial, shouldn't they be more worried about that than pointing out perfectly legal behaviour at commercial enterprises

Or does Paul Barry, who is writing a (possibly negative) book on the Murdoch Empire, just have an unhealthy obsession with Murdoch

The Labour/ABC narrative on the Murdoch conspiracy is just as odious as the beat-ups the Tele does on Rudd...but which is more interesting to the public debate?

And as an aside, what the hell is the failed media regulator from the UK - Labour MP Tom Watson, doing on Q & A?