Sunday, June 30, 2013

Net Worth Update (June 2013)

Current Net Worth
Assets
May-13
June-13
Change
% change
Savings Account 1
$2,429.26
$2,419.38
($9.88)
-0.41
Savings Account 2
$3,133.53
$2,902.53
($231.00)
-7.37
Savings Account 3
$20,080.16
$22,780.16
$2,700.00
13.45
Investment Linked Fund
$9,126.35
$8,601.44
($524.91)
-5.75
Schroders Commodity Fund
$9,463.89
$9,146.00
($317.89)
-3.36
Stock Holdings
$10,135.00
$9,725.00
($410.00)
-4.05
Phillip Money Market Fund
$15,025.34
$15,031.85
$6.51
0.04
Physical cash
$1,000.00
$1,000.00
$0.00
0.00
Market Value Of BTO Flat (to be built in 2016/2017)
$750,000.00
$750,000.00
$0.00

Total Assets
$820,393.53
$821,606.36
$1,212.83
0.15





Liabilities




Home Loan
$617,500
$617,500
$0.00
0.00





Net Worth (including flat to be built in 2016/2017)
$202,893.53
$204,106.36
$1,212.83
0.60
Investible Net Worth
$70,393.53
$71,606.36
$1,212.83
1.72


Highlights

  • Net worth increased by 1.72% (lower than expected) due to the correction in the markets. Decrease in paper gain of portfolio offset the increase of $2,465 in cash/cash equivalents.
  • Cash/Cash Equivalents now constitute 62% of my investible net worth
  • The government GST voucher and Singpost dividends will contribute to my net worth in July 2013 (next month)
  • Plummeting of gold price pulled down the NAV of Schroders Commodity Fund as gold futures are one of the main components of the fund

Thursday, June 27, 2013

No Double Dipper

As sure as eggs are eggs, the Office for National Statistics (ONS) has revised its figures yet again.

This time the revision brings some good news, it appears that Britain never had a double dip recession:
"GDP growth between Q4 2011 and Q1 2012 has been revised from a fall of 0.1% to flat, thereby removing the phenomenon of two consecutive quarters of negative growth."
As I have noted many times before it is extremely unwise to rely on figures provided by the ONS, they are always out of date and invariably wrong.

Wednesday, June 26, 2013

£11.5BN Cuts

The chancellor is to unveil £11.5BN of cuts for 2015/16 to help reduce the deficit.

Local government is expected to be hardest hit.

Watch Osborne's speech live at 12:30 here.

The Dangers Posed By Rising Interest Rates

The Bank of England's Financial Stability reports arises a red flag about the dangers from a rise in interest rates.

The Executive Summary notes:
"In the near term, risks could crystallise if global long-term interest rates were to rise abruptly from current still historically low levels.."
Hidden away in the report itself, the Bank notes that:
"The impact of higher global interest rates on borrowers will depend on the cause of the increase....a significant cohort of UK borrowers could experience financial difficulties if interest rates were to rise during a period of subdued income growth.."
Will interest rates rise?

Sir Mervyn King, thinks not (not at least in the foreseeable future).


Tuesday, June 25, 2013

Cyprus NOT Seeking Renegotiation of Bailout

Q: When is a renegotiation not a renegotiation?

A: When it is a "tweaking".

Farewell Sir Mervyn

Sir Mervyn King is giving evidence to the Commons Treasury committee for the last time as governor of the Bank of England.

During his valedictory appearance he hinted that Jane Austen will appear on future £10 notes, he also welcomed the responsibility for bank supervision being returned to the Bank of England.

He is no fan of austerity for countries with no other means of promoting growth, and noted that it had been a disaster for those countries; in the meantime QE in the UK, in his opinion, will continue to run for the foreseeable future as will the current low levels of interest rates.

Monday, June 24, 2013

A Nice Little Earner For Barclays

Barclays has decided to start selling on data from its customers to other companies.

The Telegraph reports that Barclays has told savers that it intends to package together "information about the transactions on your account" with data on groups of other customers to compile reports on spending trends across Britain. This could then be passed on other companies or Government departments.

In addition to these changes, which will take effect in the autumn, Barclays will also start tracking customers through their mobile phones or other "devices" allegedly to help protect them from fraud. If a payment is made in a certain country, Barclays will "ping" the customer's mobile number to check if the phone is in that country.

Barclays claims that any customer data it sells would never be sold on in such a way that an individual customers was "identifiable".

Everyone happy with this?

If not, aside from closing your account, there's not much you can do about it; as Barclays is only allowing you to opt out of having your mobile tracked.

Friday, June 21, 2013

Greece Stares Into the Abyss Again

The International Monetary Fund (IMF) is preparing to suspend aid payments to Greece by the end of next month unless eurozone leaders plug a €3bn-€4bn shortfall that has opened up in Greece’s €172bn rescue programme, according to a report in the FT.

The shortfall has arisen as a result of a decision by  eurozone central banks not to roll over Greek bonds they hold, and comes amid signs that even the scaled-back privatisation plan Athens agreed to last year is falling behind schedule.

There is still a chance for Greece to receive the next tranche of aid if it manages to reach a deal with the troika before the end of June. However, the coalition government in Greece is on the verge of collapse as a result of its failure to internally agree on how to resolve the crisis caused by the decision to close the state broadcaster.

As ever with bailouts, they are not solutions but merely vehicles for kicking the can down the round and buying time for the incumbent government to resolve the original crisis. In Greece's case there may well soon be no government to hold talks or resolve the crisis.

Sunday, June 16, 2013

100,000 Page Views !!!

$1Million Personal Financial Diary has hit a major milestone : 100,000 total page views. It has taken slightly more than 3 years, but we're finally here, and it's worth a blog post because I owe it all to you readers.

Three years back, I started this blog to detail my process of accumulating wealth and eventually achieve financial freedom. I also shared many of the milestones in my life such as balloting for a HDB flat, achieving my first target of $70,000 before age 25, getting my first job, etc. It has been a fulfilling three years as I have learnt a great deal from reading my blog comments and other financial blogs.

I will continue posting monthly net worth updates promptly and share my investment thoughts and actions. My next net worth target is $200,000 by December 2016 (age 28). Many people have casted doubts on this goal but I personally feel that it is achievable. Continue to follow me on my journey to achieve/exceed the net worth targets I set for myself and I wish you the best in your financial journey.

Cheers!

Wednesday, June 12, 2013

Greek General Strike Call

Greek unions have called for a general strike in Greece tomorrow over the closure of state TV.

Monday, June 10, 2013

Crisis Over? - Hollande's Delusion

According to Francois Hollande, President of France, the Eurozone crisis is over.

His upbeat and, frankly, delusional view is at odds with reality.

Istat, Italy's statistics office, has released data that shows the recession in Italy is in fact worse than previously thought; with revised figures for the first three months of the year showing that Italian GDP shank by 0.6%, not 0.5% as previously thought.

Friday, June 7, 2013

Banks Retry Debits

Banks, as we all know, love to make money out of their customers' financial cock ups. Therefore it should come as no surprise to learn that banks make around £200M per annum from penalty fees on unpaid items.

Step forward, in the manner of a knight on a plodding donkey, the FCA which has done what the FSA should have done years ago; namely force banks to take full account of the money customers pay into their accounts each day, even if it arrives after direct debits and standing orders have been paid out.

The FCA has decided, quite correctly, that because direct debits tend to be taken from accounts first thing in the morning (before receipts are credited) the banks had stacked the rules of the house in their favour.

Simon Gompertz reports that the UK's seven largest banks, including Barclays, HSBC and RBS, have agreed to operate a retry system in the afternoon, probably between 3pm and 4pm, which takes accounts of new credits, salary payments and cheques which have cleared during the day.

Lloyds Banking Group has also signed up, but is being tardy and claims that it is as yet unable to retry all payments in the afternoon. However, any Lloyds customer who incurs a late payment charge because money hasn't been properly credited will be able to claim a refund (if they remember to).

Thursday, June 6, 2013

The Bungled Bailout

The IMF has issued a report that concludes that the bailout of Greece was bungled, because it was an attempt to save the single currency rather than Greece itself.

Very true indeed.

Unsurprisingly the Gnomes of Brussels flatly reject the report.

Well they would, wouldn't they?

That being said, given that the IMF thinks that the bailout was bungled, why did the IMF agree to participate in bailing Greece out twice?

Wednesday, June 5, 2013

EU On Strike

Despite the fact that the rate of Eurozone unemployment is at a record high of 12.2%, and that large swathes of Europe are suffering under years of imposed austerity, EU officials went on strike in Brussels today in a protest against planned EU administrative cuts.

I wonder if anyone living in the real world will notice this strike?

Tuesday, June 4, 2013

Third Bailout For Greece?

Jean-Claude Juncker, former Eurogroup chief and Prime Minister of Luxembourg has given an interview to MNI in which he speculates that a third loan to Greece cannot be excluded. 

No surprises there then!

Monday, June 3, 2013

Retire At 70

Tom McPhail of Hargreaves Lansdown has said that, wealthy footballers and celebs aside, in 10 years’ time 70 will be the normal retirement age.

This should hardly come as a surprise, given that people are living longer and that pensions (both state and private) cannot keep pace with the increase in longevity.

However, the Times quotes a report from Scottish Widows that says that households are prioritising living expenses, paying off debts and mortgage repayments over saving for retirement in the current uncertain economic climate.

At this point I would ask exactly what it is that Scottish Widows expect people to do?

Defaulting on mortgage payments or increasing debts (in order to save for the future) will simply add to the financial burden of people in later years as they grow older.