Money Smart Skills

Been seeing and hearing a lot lately about investing.
Got me thinking about what it means to different people.

I know a girl who is 31 year old professional and successful. She works for a big name mining company and earns a pot load. Has a half million dollar mortgage and her own car and some employee shares.
What does investing mean to her? She salary sacrifices some of her money to a broker who everyone in her office uses because he tells her, not everyone lost in the financial crisis.
She has NO idea where money is, how much she has left or even how shares and companies work.
My mother is similar, She gives a planner $6000.00 a year and he invests it for her. Its only when she lost $6000.00 principle she had me look at it and her agent had her paying premium fees on volatile market investments. Risking her money for POTENIALLY high gains, telling her 25% a year return guaranteed.

Been visiting a lot of websites that talk about the ‘basics’ of personal finance.
Some list home ownership as a base skill.
Others talk about ‘good’ debt.
There seems to be no set or agreed basics people should aim for.
For me Investing is something you do with a percentage of your savings when you have NOTHING else owing. A fool puts all his eggs in one basket.
I see people at my work place discussing how they bought shares in a super market in China because the company is posting a good quarterlies and their sales projections look good.
Do you work in a super market?
Do you work in china?
Do you work in a supermarket in china?
Then why would you trust your money to them?

I’m a mechanical fitter.
I work with tools in the heavy mining and engineering fields.
Turning the spanners keeps the money rolling in for me.
What would I invest in?
Rio Tinto mining groups company Pilbara iron because I worked there for four years, I saw the company from the ore pit, to the crushers, the rail network transporting the product to port. The stockpiling and ship loading facilities, the high employee benefits, all the nuts and bolts. This is how you should see the companies you invest in.
I would buy shares in Snap on tools because I use their quality products and enjoy there superior return policy.
Komatsu or CAT companies because I fix their products.
I see the product. I see the companies, I can see the people supporting the whole thing. I can tell you the general industries feelings towards these products.
“Snap on quality”
“CAT engine reliability”
“Komatsu land planes on outback highways to deliver parts”

A soldier would invest in weapon manufactures or military vehicle manufacturers.
A nurse in a pharmaceutical company, a marketing executive a communications or media company.
Having access to unlimited companies is a marketing advantage of brokerage companies to expand sales and companies to secure maximum capital in floats.
It should never affect what you invest in just because the choice is there. Financial reports are massaged by companies who want your money.
You cant trust advice on a product from the sales man trying to sell it. No, you find reviews from people who already own it, experience is the wisest teacher.
I think people forget what investing means. When you have a little something you do NOT need you can lend it out for an agreed rental.
You wouldn’t invest in a vineyard if you don’t drink wine. Why, because the numbers or a broker says so, why would you invest in a supermarket in china?

Seeing is believing. Trust only what you know. Not what your told.

Onto the basics of personal Finance.
Number one, there is no good debt/bad debt.
Just debt. IF a debt is offset by an income this is good income, not good debt.
If you did not have the debt, the income would be even better. That is a debt reducing an income. That’s what debt does.

1. Income and expenditures.
Have an income.
Know your expenditures. Expenditures should never exceed income.
Rid yourself of ALL debt.
Have savings.
In this order.
No if, buts or maybe’s. If you can’t manage this then what makes you think you can manage being rich. Get a rich person and a poor person and have them receive the same income and expenditures and the rich person will always finish ahead of the poor because he understands these basics of finance.

After you have mastered living with in your income and budget, emergency funds, insurance, transport, communications, health care and savings can you even think about investing.

You don’t build the building without a proper foundation. This is true for investing. What good is
$10 000.00 in high yield account if you have to withdraw it to pay for a emergency dental appointment. No, your emergency money should cover this. If it does not then your foundation is not strong enough to support your wealth building.

2. Investing
What do you invest in?
Personally I look for safe return and liquidity. What good is money if you can’t have it when you need it?
I like high interest accounts, stocks in companies you know and trust the products and businesses well versed in their craft.

Don’t invest your entire savings in your higher risk investments. Don’t blindly follow one company or product.
Trust what you see, not what your told.

These are THE two basics of finance.


Master Lewis

It's a confusing question.
How much wealth do you own?
Some people say "I own my house, I own my car."
That's a not the answer. These things are not wealth.
How much wealth do you own? How much of your paycheck do you give away for living costs?
After that, how much do you save?
AFTER all that how much wealth DO YOU OWN. . . . . . . after savings.
Right now how much money do you OWN?
Do you have income from a source other than your wage?
Savings is wealth many would say.

Savings are meant to be spent.
You save for a rainy day, shopping, holidays or retirement. To have wealth you must have portion of money that is never destined to be spent. Only grown in value.
Money never spent is a challenging concept. But if you never spend money what does it do?
It transforms into assets.

Definition of a Slave :

1. One bound in servitude with no reward
2. One who is abjectly subservient to a specified person or influence
3. One who works extremely hard.
4. A machine or component controlled by another machine or component.


Slaves is what most of the high consumer types fall into. They recieve their paychecks.
Then after they pay for rent/morgage, they then buy their food and after this they pay bills. Then comes auto and personal loans and, if they're really bad, soon comes store credit cards. Most are all or a combination of these things.

At the end, they have little if anything of spare coin left over. They trade 40 - 60 hours of their lives a week to pay for the banks mortgage profit, the grocers profit and the electronic stores interest. Bound to servitude with no reward.

Even if they save anything that too will one day be spent.

Owning wealth isn't owning a home with a mortgage. Sure a home can gain equity which becomes an asset but in these days and times it can lose value or the morgage can be called in.

Gambling for an asset is no better then gambling on cards.
Your asset of a home is offset by the debt of a mortgage. Effectively cancelled out on your balance sheet
and neutral. This is differant school of thinking to the norm and is not well recieved.
However its a widely agreed fact by those who have attained financial freedom.

Motor vehicles and boats have so many extra costs with insurance,maintenance and license fees that they could very rarely be called an asset.
Savings is an asset while it's in the form of savings. But as soon as it becomes the mortgage or holiday it ceases to be an asset.
Owning wealth is putting some of your money away forever.
You use this money to create income or purchase an asset that creates income.
Having an income seperate from your main is the very basis for true wealth.

At the turn of last century it was considered good learning if a person put away 10% of his income for this purpose.
More recent surveys of Americas wealthy show a trend of investing 15%.

Whatever you do put away be it a little or alot, some is always better then none.
The idea of saving for your whole life sounds absurd to the average person until you realzse such a small amount over so many years can add up to so much. The interest earns interest.
At the end you dont really miss the dollars anyway.

It's important to start off small with what you can afford. Then grow it as you grow.
As your wealth grows you will see wealth where before you missed it. Financial wisdom is a magical thing. Once you understand money and the two important rules of getting and keeping it, it seems to flow to you in increasing quantities.

A person who is wise with their money is powerful and in control. They know where they have come from and where they are going.

Every great tree has grown from a tiny seed. Put those few dollars away in your tiny wealth seed and begin your massive wealth tree.

"No matter a persons proffesion,
they are both honoured and respected if they understand the laws of acquiring and keeping wealth."



It does not matter if you're a garbage collecter or a kitchen hand. If you are well educated in your personal finances and handle your money with foresight and skill, you can walk the same line as the wealthy because you're on the same road, heading to the same place: Financial Freedom

Master Lewis

Not much has happened in the last month of note.

Moved out into our own place.
Feels good to not feel we are being slowly worn down by a cult.

Work is the same.
Still saving away.
Tax office froze my refund until we 'work out' A few errors.

My tax agent is a saint.
She even filled in my business activity statements on her own time.
She's clearly a bit of a cougar and Im more then happy to play bleating cub as long as she helps me out with the tax department.

She got them to waive over $4000.00 in fines so far and she feels confident she can get the rest done. :P

Also I have relised the motto "buying quality never costs" is very true as a few cheap mobile phones have failed me of late.

Still wrestling with Australian immergration. The are the immovable force that doesnt reconise human as a condition on application.

Will up date infrequantly lol.

Till then

Master Lewis

Time for a rant. It's gonna be a long one.
This is almost 1 year and 9 months in the making.

Where to begin. Lets see.
Chris and Tim.
My two best friends of 10 years. Went through high school, beginning work years, apprenticeships, loves, losses and everything else friendship takes you on.
How ever, events of the last few months and new information has had me re-evaluating my criteria of friends.

Let's start with Chris.
Mr chris:
Finished school and did nothing for 6 years. I'm not talking worked miniumum wage - I mean LITERALLY sat at home every day for 6 years and played video games.

His parents eventually kicked him out and he moved to the big city.

We both got jobs in the same places and earned the same coin. This was in my days of terrible money habits and I had some equally bad debts.

It was about 1 year after we began our work in the city when I decided to get my financial education.
Both Tim and Chris were along for the ride.
We read all the same 40+ books as each other. We talked about the same behavioural corrections we needed and helped each other.

Chris and I even ran a business together that made some great profit.
But as time wore on, it was clear having the knowledge and using it were two differant things.
As I worked my way from the darkness of debt and into the light others did not.
Chris began working part time and struggling month after month.
For a period of 3 months I even bought him his weekly groceries.

Eventually he got a great job getting $2800.00 per week AFTER tax.
He moved into a nice home and after the first week was completely debt free.

Before leaving Australia to go marry my wife, I stayed with him and his partner for about 4 days.
At this point, he had a reliable vehicle, no debts, $3000.00 in the bank and guaranteed high income for 5 months.

I left and came back 5 months and three weeks later to find:

Chris is broke, $5000.00 in debt, not one house hold appliance extra, a terrible car and a worse attitude.

Now when I left for overseas certain deals were made.

One: My stuff would be stored in his shed.

Two: He would purchase my prized road bike for a pitiful sum of $2500.00. He would ride and maintain it and upon my return I would then repurchase it for $3000.00. The market value for it is at least $8000.00 and I had owned it for 5 years.

Three: Final deal was we could reside with him until we had secured ourselves enough to stand on our own.

How did that turn out?
Well, after blowing all his money, he sold my bike for $1800.00. It totally broke my heart.
When this money ran out he then sold some of my personal items.
And after staying with him for only a week and a half, we were asked to leave because his partner disliked my wife.

And we arrived back on a sunday, the next day he recieved a tax check for $5500.00 and by thursday he was broke.

We have not spoken since but he has joined the army, left his partner and is trying to get back in my life.
I do not have room or time for fair weather friends.

Tim, however, is a great friend. Now while he educated himself finacially, he is still terrible and cannot save. However, my problem is not with him - but his parents.

We have moved into his home and since this time got to know them on a whole new level.

Where do I begin?
Religion: Now I am NOT religious. However I do not hold bias or judgement for those who are.
But, since being here, all my boundaries have been pushed.
I'm talking extremist Crusade Christains.
The mother actually believes she is a prophet.
Yes, you read right. Like Jesus and Mohammed.
She was actually asked to leave several churches because she was trying to tell them God wanted them to invest in some real estate plan of hers.
She is very controlling.
My wife is of Lebanese descent and looks very middle eastern.
They constantly preach about the "evil Muslims" (she is not religious).

They even went as far to say because my wife's father is muslim (he is not, this is a presumption because he is middle eastern) then he has the curse of evil on him,so my wife cannot have a relationship with our son because the curse will be passed down through generations.
You couldn't make this stuff up!
They have even said if a jew murders an arab, they will stand by the Jew because as Christians, that's their place.

They do weekly exorcisms and faith healings.
It's ridiculous.
They are the very extremists they try warn the world about.
Financially, the mother is the worst human alive.
When she met her husband, he was 50, and owned two homes (no easy feat in Australia). She was 35.
She borrowed against his homes to start a business.
The business failed.
They lost everything including their retirement savings.

Fast forward.
After getting out of the 7 year bankruptcy only 4 years ago, she is a monster.
During the bankruptcy, my friend Tim began his apprenticeship and recieved a $13 000.00 loan for his first car.
However, because he was only 17, the money went into his mothers account.
She spent it all. And NOT on the bankrupcy. Today he is still paying off this loan.
With their now ruined credit rating, they get a self managed super fund that the fathers, Tim's and another family friends (Kieth) super money went into.
Sadly, even though she contributed nothing, she still held a 25% stake in its shares.
They then used the trust to get a mortgage on some land. They planned to subdivide the title and sell one.
It took three years but it sold. they used the money to pay off the mortgage on the remaining land and all taxes.
Said and done they ended up with a cool $231 000.00
This was to build their dream home on the remaining property.
First order of business?
Blow out $25 000.00 holiday for 4 weeks to America. But to a church. Morning star.

When they return they have bought the sole rights to some company selling religious grape seeds.
I swear, I'm not making this up.
The company was one of those typical pyramid schemes.
Didn't matter what you were selling, it was about getting 5 friends signed up, then they get 5 friends each signed up and you retire a millionaire never having to work again. An army of people peddeling Religous grape seeds for you.

As predicted on, thier previous business acumen failed miserably. She made 0.40 cents.
She was even ripping off the fourth memeber of their trust until he caught her and confronted her. He has since withdrawn from the super fund.

Now the coupe de grace;
the event that has sent me over the edge of my silent endurance.

Tim is a marine engineer. He works away for months at a time and gets great money.

The mother has bad teeth. She priced the dental work here:
$10 000.00
So she shops around and finds that in Thailand she can have the same work done for $3000.00 great savings.
However, she booked 18 days even though it's a one day proceedure, gets a friend and books hotels and tour packages and the trip totals out at $13 000.00.
How about stay and save $3000.00
But her husband wont let her have this money.
So she logs into Tim's accounts and takes the money from him. He returned from sea just a few days ago and he hasn't even $100.00 for his time away.
AND SHE CANT EVEN GET THE PROCEEDURE DONE.
But does she come home early ?
Nope.
Facebook update: "Having cocktails and massages by the pool"
THANK EVERYTHING GOOD IN THIS world she has no control over me or my wife.

She micromanages everything.
AND she has ministries with people who look to her for advice because they truly believe she is a prophet.
She even convinced one girl to quit university because that's what God was telling her.
God instead wants her to work for a knock down hourly rate at the Cafe the church they go to owns.

Financially, this is total INSANITY!
I've been here 9 months and I feel I'm losing it. I feel "are we the only people who think exorcising in tongues over dinner is weird?"

Ontop of all this I stated earlier Tim was a great guy. Until I found out that when I was with my ex partner he and her had their own thing on the side.

Sigh. Are we really who we surround ourselves with?

On a positive note, we move out next weekend into our own place.
Saving away like usual,
excitedly awaiting to start studying.



Master Lewis

Well, I did it.

Finally, after four years, I have gotten my Tax in order.
It was almost as painful as I thought it would be but the tax department let slide a few things I was sure I would be pulled through the wringer for.

One must declare ALL income when running their own business.

So ending result was all interests were waived on fines that were paid in full and I would have been happy to break even but I still manage to pocket a cool $3500.00.

The best thing is my wife and I have just found a school and the course we would like to complete and the price was great for full cash payment. But, alas, this would take 16 weeks to save for.

However, now its only a matter of two weeks before the coin hits the account and we can begin.

Going back to school and changing careers has been one of my biggest dreams for the last year.

I work in the heavy engineering side of things and we are always out in the yards in the 40 degree heat or 5 degree cold.

I know many make the pilgrimage from the office to the hands on industry but I do not want to be swinging spanners in two years time.

I want to be in a nice office.
Weather will not dictate the enjoyment of my day.
My skin will not be punished for some evil chemical I must be submerged in.

Although, between this dream and I lies one year of study and a few thousand dollars.

A small obstacle for a motivated man, I assure you.

I guess my goals for 2010 will be to get a solid foundation down.

First will be to get a good $10 000.00 saved and then get the first course I need out of the way.

These two things would be my biggest goals for the year.

Master Lewis

My first entry.
I guess to know where I'm going it helps to know where I have been.

Up until 5 years ago, I was on the usual path of people who haven't a clue about money. Example:
A load of loans and credit card debts, powerful sports cars, run down home and no tangible assets of any kind.

I remember sitting at the table with bills and bills and bills piled up and thinking I know exactly how much money I have, and then knowing that it was no way near enough.

So where did I begin? I remember I picked up a copy of "Rich Dad, Poor Dad."
One year later it all ended when I found a copy of the "Richest Man in Babylon." Since then, I find that every bit of knowledge or advice concerning money can be found in this book.

For almost two years I have tracked every cent I have spent, saved or lost.
I met the girl of my dreams and chased her across Canada and the Middle East.

All the adventures resulted in us married and standing in an Australian airport with $4.05 in our pocket and a suit case each to call our own.
That was March 22nd, 2009.
It is now the 13th of January 2010 and we are expecting our first son within days; we have gone through the expensive and time costly wringer that is Australian Immigration.
We have a place of our own.
We own a reliable nissan patrol 4x4.
We have over 3 months of food in our cupboards.
We have not even $1.00 of debt.
We own completely everything we eat, drive and wear.
Despite having a pitiful income due to the economy, my wife and I still manage to save $204.00 a week.

I will update regularly as we try to reach our goals for 2010.

- Master Lewis