30 September 2012

Save Money by Repairing Old Items

The strap on my wristwatch is ruined. The pin that connects into the notches is broken. I went without a watch for a few days, but found that I need a watch. For example, in the shower I completely lost track of how long I was showering for and ended up spending over an hour in there.

I have now fixed the problem by sticky taping my watch. Now that is thrifty!

26 September 2012

Cheapest toothpaste in Melbourne?

Today I went to Coles and purchased 150g worth of toothpaste for only $1.29. It was a Coles branded toothpaste. Let me know if you find cheaper toothpaste in Melbourne.

23 September 2012

Betashares Offers Commodity ETFs for Australians

Link: BetaShares

Most people invest in shares, bonds, and real estate. Shares and real estate tend to perform well during an economic boom. Government bonds are seen as safe investments since they are backed by government, and many people hold government bonds or government bond funds in addition to growth assets such as shares and real estate in order to diversify. But what about commodities?

The word "commodity" is not perfectly clear, but investing in commodities involves investing in such things as gold, oil, soybeans, wheat, and livestock. It is an investment in hard assets that are more often than not necessary for humankind. Investment in commodities are perfect not really for periods of economic booms or economic recessions. Rather, commodities are excellent to hold during times of stagflation, that is, a combination of stagnant economic growth and inflation.

One way of combating massive inflation is to adopt The Alpha Strategy, that is, hoarding essentials such as rice and toilet paper in your home. The less extreme option is to buy a commodity ETF.

For Australians, a firm called Betashares provides a diverse range of ETFs, including an ETF that invests in crude oil futures. I am thinking of using my margin loan to purchase a good chunk of commodity ETFs via Betashares but I am unsure if I should. Perhaps shares in resource companies already provide sufficient commodity exposure. The fact the Australian dollar is a commodity currency also provides some exposure. Then there is the worry about the safety of synthetic ETFs (read Quant Congress USA: Avoid synthetic ETFs, says Avellaneda - Risk.net) with some saying they are fine for short-term trading but not appropriate for long-term investing due to counterparty risk.

If anyone has any deep knowledge on this issue, please comment.

22 September 2012

Good Android Phones with Small Displays

People with iPhones go on about how small screens are great. One of my friends purchased an iPhone 4S outright for close to $1000 and claimed that he didn't mind getting a phone with a small display because it fits well in his hands. He claimed that the 4S's 3.5 inch display is the perfect size and that high-end Android phones all had large screens that don't fit in your pocket. Android phones with small screens were not "high-end" enough for him like the iPhone was.

First of all, not all Android phones have large screens. The Samsung Galaxy Ace has a 3.5 inch screen, just like the iPhone 4S and iPhone 4. Furthermore, who said the iPhone was ever a high-end phone? The iPhone 4 has a 800Mhz single-core processor with 0.5GB RAM, and the Galaxy Ace has those exact hardware specifications but comes at half the price. The iPhone 4S has a dual-core 800Mhz processor with 0.5GB RAM. The Samsung Galaxy Ace 2 also has those same hardware specs (but with slightly more RAM at 0.7GB) yet is around half the price of the Apple.

But then lo-and-behold, the iPhone 5 with 4 inch display comes out and all of a sudden my friend gets one and contradicts himself when he says that now he believes that 4 inch is the perfect size. It seems like he is just buying first and rationalising his purchase later.

Why do women like "Fifty Shades of Grey"?


I have not read the book, but it seems to me that its popularity only confirms to many men many disturbing and traditional ideas they may have, such as women want and need to be dominated.

13 September 2012

iPhone 5 Specs Not Released Yet

The iPhone 5 has been announced. It will have a 4 inch display and be lighter. Although Apple claims it has a A6 chip, there has been no announcement about the specs, such as how many CPU cores the phone will have. We therefore cannot speculate on how the phone compares to other phones, mainly high-end Android phones, the number one phone for now clearly being the Samsung Galaxy Note 2, which has a quad-core CPU with an incredible 2GB of RAM and over 3000mAh battery capacity. It also comes with an in-built stylus and a screen size greater than 5 inches. We will need to see the iPhones specs (including the price) and compare it.

The old iPhone 4S is a big disappointment. Long before the iPhone 5 came out, it sold for about $700 outright, which is about the price of high-end Android phones, yet the iPhone 4S only had a dual-core 1Ghz CPU with a mere 0.5GB RAM. The screen size on a 4S is only 3.5 inches. Screen size is very subjective, but in my opinion the main reason for getting a smartphone is to get internet access and, mainly, to read (and watch videos) online. You just cannot do that on a small screen without squinting hard and potentially destroying your eyes. If you just use for phone for making phone calls and texting, it's okay to have a small screen, but if you only make calls and text, why not spend $50 on a small dumbphone instead of spending $700 on a smartphone? It just doesn't make sense.

The weakness and cheapness of the iPhone 4S's hardware clearly explains why Apple makes massive 73 per cent gross margins on each iPhone it sells and why, even though Samsung is the number one phone company is terms of sales, Apple is the number one phone company in terms of profits. Apple is able to price their phones at the same price as high-end Android phones, yet their phones are weaker and cheaper to produce. Apple today is the world's biggest public company. Customers get less for what they pay.

Hopefully the iPhone 5 is better value for money.

09 September 2012

Buy ETF for Energy Crisis Hedge


I am reading the Wikipedia article above on the energy crisis that ended in 2009. During this time, oil prices skyrocketed.

Thankfully the bubble burst and oil is now around $60, although lately it has gone up to $100 per barrel, which makes me worried about another energy crisis.

On the ASX now there is a firm called Betashares that sells ETF with ticker symbol OOO that tracks the price of oil through futures contracts. I am thinking of buy some to prepare for possible stagflation in the future.

Speculation caused the 2000s energy crisis

I am currently reading the Wikipedia article on the energy crisis of the 2000s. If you remember, energy prices skyrocketed, causing massive stagflation. The cost of a barrel of crude oil, which for so long was around $20 per barrel, shot up to about $180 per barrel or thereabouts.

Why caused the run up in oil prices? Speculation by in investors was blamed, but an American government committee concluded that speculation was not to blame, that the run up in prices was the product of supply and demand.

This is rubbish. If it were supply and demand, how come crude oil prices suddenly crashed at the end of 2009 from almost $200 per barrel to as low as $40 per barrel? If it were supply and demand then that must mean that all of a sudden demand must have collapsed. The more logical explanation is that there was panic selloff by those who hoarded physical oil or futures contracts.


08 September 2012

Love and Sex Stimulate the Economy

In order to prevent mental pollution, I now watch YouTube videos on my television. This means I am in control of what I watch rather than being subject to the whims of whatever is on television. I have been doing this for a while now, and I have noticed that when watching YouTube videos I tend to watch documentaries.

Every now and then I go back to mainstream TV and catch a glimpse of the programs that are on television. I also have a subscription to Quickflix and have about two DVDs sent to me via mail every month. What I have noticed when I watch mainstream TV and films on DVD is that there is a lot of film, TV shows, and advertising that glamorises not just the "immoral" sexual desires but also a lot of media that glamorises "moral" sexual desires, that is, romantic love, e.g. dating, courtship, and marriage.

I am not popular with females. I am 28 now and have only been on short dates with two females. I am currently able to live on about $400 per fortnight, but when I was dating I noticed that my rate of spending doubled to about $800 per fortnight. There is a lot that you must pay for when you are dating. If you take things further, you may end up with a huge mortgage, wedding expenses, and then children.  The bottom line is that romantic love is expensive. Even sinful love, e.g. visiting prostitutes, is expensive and potentially dangerous.

My point is that the desires of love and sex create significant consumer demand in an economy, so much so that it would make sense for all the businesses that benefit from increase in consumer demand for love and sex, e.g. wedding organisers, brothels, flower shops, condom producers, and so forth, to pool their money into an organisation that gives grants to films and TV shows that promote or further glamorise love and sex.

Escaping Full-Time Work

Sick and tired of watching advertisements on TV, I now resort to making good use of the broadband plan that I have with my ISP and watching mainly YouTube videos on my television. There are ads on YouTube, but they don't seem to be as offensive as the ads on mainstream Australian TV (e.g. those annoying X-Factor ads where someone sings wells, there is a standing ovation, people start crying, etc).

One of the people on YouTube I watch is George Hemminger. Here is a video of him talking about how he doesn't work full-time because he is unable to.


I have a full time job now but always wonder whether I can do it for the rest of my life. I am almost 30 now, and most people retire at about 60, so it's another 30 years of full-time work. I've been reflecting on this topic for a while now and I don't think I have the energy to do it. Luckily for me, I don't have wife, children, mortgage, or even a girlfriend. I barely even have any friends. It's not something I deliberately set out to achieve, but just a by-product of being introverted or shy.

I have no plans to get a big mortgage or a wife or children, and I still work full-time, even though I question whether I want to do it. I suppose it's the fear of no longer earning an income that keeps me working.

My hatred of being a full-time employee relates to lack of freedom. When you are an employee, you have to go to work and do what the boss tells you to do, and it's that constant subordination that wears me out. I think one of these days I should start my own business, but I'll need to save up some money first.

Many people think that in order to start your own business you must have a really good idea. Even though I have no experience in running my own business, I doubt this is true. What is wrong with taking an existing tried-and-tested business model, e.g. starting a milk bar, and doing that? Some people will say that if you don't invent anything, you will compete with many others. For example, if you invent a cure of AIDS, you will have exclusive monopoly rights granted by patent law and you can make huge profits, but if you start a milk bar, you will compete with all the other milk bars out there and make almost nothing. While I agree that monopolization can be highly profitable, I don't agree that just because you start a mainstream business (e.g. a cafe or a milk bar) that you cannot make any money. You will just not make as much money. If there is no money to be made from e.g. opening a cafe or a milk bar, why do cafes and milk bars exist? There must be some profit. Furthermore, even if you are an employee, you are not inventing anything. You go to university just like millions of other people out there and when you leave and apply for jobs or apply for promotions within an organisation, you are competing. You are competing on basic things like communication skills, writing skills, stakeholder management skills, and so forth.

05 September 2012

Kindle will not be free


The kindle will not be free. If it were, I will buy a billion, melt the plastic, and sell it to a chemical company for a profit.

02 September 2012

Carbon Tax Compensation Present Opportunity to Salary Sacrifice into Superannuation

To compensate for the impact of Julia Gillard's carbon tax on the cost of living, income tax cuts will compensate anyone who earns less than $80,000. For further details about the tax cuts, see the following: Individual Income Tax Rates (ATO website)

Basically, the tax free threshold will increase from around $6000 to about $18000 and instead of being taxed 15% after that, you will be taxed 19%. For each dollar you earn above $37,000, instead of being taxed 30%, that marginal tax rate will increase to 32.5% and then eventually to 33%.

What this means is that, for those who earn between $37,000 and $80,000, you can cut your income tax by 33% (rather than just 30%) if you salary sacrifice. One option is to salary sacrifice into your superannuation fund. Money that goes into superannuation is taxed, of course, but it is only at 15%.

Be careful when you salary sacrifice into your superannuation fund as there is a limit. For younger people, there is a concessional contribution limit of $25,000 per year. It is best that you speak to a financial advisor if you are concerned about exceeded this limit.

Personally, I have taken this as an opportunity to salary sacrifice more into my superannuation fund. All it involved was sending an email to HR requesting it. I now salary sacrifice $600 per fortnight into my superannuation fund.

My reasons for salary sacrificing into my superannuation fund are not just monetary. There are also some personal reasons why I am doing what I am doing. I find that having too much money around doesn't help and actually makes me worried or anxious, so putting money aside (so that it is out of sight and out of mind) actually calms me considerably. Instead of doing something stupid with the money and losing it, it is now safely stored away in my superannuation fund, and I don't have to worry about it until I'm very old.

Some people argue that putting money into superannuation when you're young is a waste of money. They argue that superannuation funds invest money in the stock market, which underperforms residential real estate. They would prefer to be hit with the higher tax and then put the money into residential real estate (by paying off their mortgages). The problem with this argument is that is assumed two things: the first thing it assumes is that superannuation funds invest only in the stock market and not real estate. This is wrong. Superannuation funds typically offer investors with the choice of a range of investments, but typically industry super funds tend to offer shares, bonds, listed property, and cash. These investments, in my opinion, are fine. But if you are absolutely desperate to invest in residential real estate, you can set up a self-managed super fund (SMSF) and invest in residential real estate. The benefit of salary sacrificing into your superannuation fund is that you can save on tax, but it is wrong to assume that superannuation funds only invest in the stock market. The second assumption is that residential real estate outperforms the stock market. This is not true. Residential real estate is very hard to measure but most studies done on this topic find that a broad Australian stock index is roughly the same in growth as residential real estate over the last few decades. Of course, you can always cherry pick some story about some guy who purchased some home for x amount and then sold a few years later for ten times the amount. Likewise, you can pick and choose select stocks like Westfield and Fortescue Metals and launch the same story in favour of the stock market, but what this teaches you is that past returns mean nothing. Just because something has performed well in the past, it doesn't mean it will perform well in the future, and in the world of finance it tends to be the opposite: i.e. those assets that go up in price rapidly in the recent past tend to be overvalued, and a correction in the form of rapidly decreasing prices usually proceeds.

In other words, there is no solid evidence that residential real estate will outperform the stock market in the long run. The best we can do is to diversify across many types of investments, from the stock market, to cash, to bonds, and even listed property and maybe some residential real estate as well. Ecclesiastes 11:2 states the following: "Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth."

01 September 2012

Viber keeps crashing on my Android

Viber keeps crashing on my HTC Desire HD. It's getting annoying. I am tempted to use whatsapp but don't want to pay the costs. Viber is free but unstable.

Sent from my HTC

About This Blog

Hello, everyone. This blog is nothing more than just a place where I put things that I think might be of interest to others. Please take time to read and, if you feel like it, provide comments to posts. A little about myself: I am a male in my 20s and live in Melbourne, Australia. I am a Christian, so my main interest in in the Bible. However, I am interested in other things, for example, chess, politics, economics, public finance, technology, and reality TV (mainly Survivor).