Was your risk management sufficient coming into Covid-19 Crisis?

I used to run a very strict budget, and then for the last 7 or 8 years haven't worried about it as we were earning comfortably more than we were spending, and with significant cash reserves. The last 3-4 years we've really been spending far too much, so in the last few weeks have absolutely slashed and burned every expense we have - I estimate we have reduced expenses by approximately 75%. We'll maintain that for the rest of the year and see where things are at.

One of Barefoots great tips is if getting your finances in order, first thing have $2000 in cash for when you need it (unexpected bills) - even more important than paying down credit card debt. Really if you don't have 3 months worth of expenses up your sleeve then you'll get into trouble...

Amazing how many people spend everything they earn and always struggle to pay off their credit card. Wouldn't matter if they got a $10-$20k payrise or even a $50k one they'll just spend it

I do like the Quarterly Net worth idea - what do you do to estimate the value of your properties each quarter?

 

I just use rent divided by yield for the most part. From time to time, a comparable is sold nearby so I see how close my valuation is the the sold price.

 

kierank has seen my spreadsheet - it's a cracker. I track our net worth each month. (It's about time i found a way to positively compare myself to him)

Well except the last two months since I saw how much our shares and Super dipped in March. I'm not going there for a few more months but you get the picture.

*And no, I still haven't created a section for Depreciation. I like the surprises at tax time.

 

I've seen it too.
I'm the opposite though... I don't like to monitor it.

I just look at the total amount I owe CBA and monitor that, and look at my super balance most days.

 

Yeah but you are the chic who was reminding us how your net wealth was increasing by $1000 a day a few years ago in Sydney while the rest of the country just went Ahem.

 

Love the (Sydney) booms

 

I need to sit down with you and have a firm chat (over coffee) about just monitoring debt.

For most of my working life, our debt mainly went up.

IMHO, monitoring debt is not really that useful.

Even after being in retirement for nearly 10 years, our debt is higher now than any time when I was working. A lot higher.

Monitoring Net Worth is what I believe is the name of the game.

 

Over the last couple of years, all the Sydney properties have gone up in value. Got equity sitting in them. So I sleep well.

 

Time to take on more debt .

 

Being conservative. Just share purchasing.

 

Here, give her some of mine. Time to share the love.

*For those who dont know her in person, Gockie is extremely generous.

 

@kierank! Here's an idea, you can take on some of @Angel's debt, I'm sure you can handle it

As to extremely generous... that would be a complete exaggeration.
But if I have extra stuff I don't need, I think it's better to give it away, see that it goes to a home that might use it.

So, I've given away things like a 3 year old TV, bed frames, bedding, sheets, towels, blankets, household goods, fridges etc. Coincidentally just yesterday I donated a mattress protector and quilt cover set for the homeless!

Oh, an idea @Angel. If there's anything of mine still at your place, if you want to do something with it (give it away or sell it) please go for it.

I saw a kid (turns out he was in year 9) trying to work on his volleyball skills in the park behind my parent's place on Saturday. His ball was really hard. So I gave him my number, said to him to text me for volleyballs, I have extras and can give him some. Anyway, when we got back to my parents place, I found a good (as in, soft) beach volleyball just in the room. I went back to the park and gave it to him. (My brother in law is also a player, i'm sure it was his ball, he played a couple of seasons in the AVL (Australian Volleyball League), and has been named in the All Stars team of the Sydney Volleyball League's highest division. Only problem is you don't get paid to play here on this country.)
Anyway, my family can cope with one less ball around.
I've also given unicycles to neighbours... Spread the joy. So, if I have things to give that I don't need and could be appreciated by other people, then why not?

I like to donate time with helping the local theatre too. They get a person to help with set building, and I gain friendships and skills. Win-win. Just nothing's going on there right now

And when the borders open, please do make your trip to Sydney!

 

When I borrowed/refinanced $1M last year, it took the bank four months to approve it. Lending that sort of money to an old pensioner like me must have been scary for them.

Six loans all Interest Only also probably didn't make it easy for them (but I am persistent - I never take No for an answer if I really want/deserve something). So, I guess I am probably maxed out.

So, why I would love to help @Angel out, I believe I would be pushing "cow manure up hill", especially in the current environment.

Is that invite for me or for @Angel ?

 

I've tweaked my retirement strategy to ensure I have an even larger cash float offsetting my loans (7 figures minimum). That's what this pandemic has taught me.

 

Both! But maybe not at the same time

 

My old man is a Dentist of 40 years. So I can appreciate this. Never underestimate the power of a good set of chompers.

 

It took me a while to work out which one was the male

 

What was the topic again?