Happy New Year! We hope to make this your (and our) most successful financial year ever.
Sticking to the theme, we talk about our financial resolutions for 2018. Last year I made the same financial mistake twice. In trying to avoid cost, I incurred unnecessary cost and aggravating effort. This year, I hope to develop mental models so I can stop making the same irritating mistake.
Simon shares his financial goals for 2018, as well as why he doesn’t believe in goal setting. Since 2017 proved me an excellent goal setter, we disagree on this point.
While every question we receive on this podcast pertains to a completely unique financial situation, some themes recur. More often than not, the questions we receive pertain to property investments, tax efficiency and foreign investing.
In this mini podcast, Simon and I discuss the answers we give most often to these questions. If you’re a regular listener, a lot of this might sound familiar to you. Perhaps hearing us talk about them again inspires you to revisit these areas to ensure you’ve got the right mix for your financial situation.
We are so happy that you’re taking a break from your merriment to share a few minutes of your holiday with us. We hope it’s a pleasant day, however you choose to celebrate it.
If you have a pressing question, sleep on it for a few more weeks. We’re back to our inboxes on 15 January 2018.
It’s safe to say that I think about money slightly more than the average person. Once bitten, twice shy and all that. Weirdly, though, my financial hyper-vigilance sometimes results in exactly what I try to avoid. 2017 felt the need to teach me that lesson more than once.
In the second of our mini podcasts, Simon and I talk about the financial mistakes we made this year. Mine cost a little, Simon’s a lot. Even so, I’d like to do better next year.
We are now officially on holiday, which means I won’t get to your questions until January. I hope you enjoy your festive season as fully as I intend to enjoy mine.
Fat Wallet listener Hugo Schuitemaker and his trusty Excel spreadsheet made a startling discovery. An amount invested at the beginning of the year would have to earn a 19.5% return to catch up to a 10% discount on his child’s school fees.
“Sometimes schools offer a discount for paying the full annual amount upfront. In my case its 10% if I pay the full annual amount of school fees by 1 January. So this naturally called for an Excel spreadsheet. Upfront payment vs Monthly payment.
I worked out that the 10% discount is a huge savings for me. If I chose not to make use of the discount and paid the monthly amount, whilst keeping the balance of my capital invested, I would need to make a return of 19.5% over the year, just to equal (break even) with the discount I would receive from the school! It’s a no-brainer for me.
I would even argue that if you can loan money at an interest rate of less than 19.5% (out of you bond for example), with a 10% discount on school fees it would be in your best interest (excuse the pun) to do so…”
In the first of six holiday mini podcasts, Simon and I discuss the merits of taking a lump-sum discount instead of investing it. We also drink some bubbles and eat popcorn. Yay, holidays!
In investments we fall victim to all the consumer habits we’ve developed over a lifetime. We are fooled by bells and whistles, make impulse purchases, get home with things we don’t need only to realise we forgot the thing we went to the store for in the first place.
By the end of an investment year, it can be hard to remember why we own what we own. This is especially true if you haven’t formalised your investment plan yet. With easy-to-use investment technology, it’s fun to experiment. These experiments hopefully help us develop a coherent investment philosophy over time.
Those of us outside of the retail sector have a bit more time for reflecting this time of year. It’s a great opportunity to take a critical look at our portfolios. In this episode, we help a listener make choices about individual shares cluttering her portfolio. We also consider strategies to deal with duplication resulting from ETF holdings.
This was our second-last recording day for the year. We are looking forward to recording six mini-episodes over a bottle (or two) of bubbles next week.