Is technical or fundamental analysis a load of bull or bear crap?

One of the blog that I read occasionally recently wrote a post lambasting stock market technical analysis as a "load of bull crap and bear crap".

Just because someone hasn't found a trading technique that's satisfying them in making them thousands or millions of dollars in profit or whatever they're seeking to gain, doesn't mean they should just write something off as crap. Just because a technique hasn't worked for you doesn't mean it's a bunch of crap.

Have you ever heard of the phrase self fulfilling prophecy?

This is an important concept and can be applied to your own personal life and also to your investment life. In Wikipedia, self fulfilling prophecy is defined as,

A self-fulfilling prophecy is a prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior.

If you tell a child that they are smart and will grow up to be successful, there's a greater possibility that the child will grow up into your expectations of them. If however, you tell them every day that they're dumb, stupid, useless and will amount to nothing, then there's a higher chance that they will grow into that type of person (unless their character is defiant enough to prove your wrong).

How does self fulfilling prophecies affect technical or fundamental analysis (known as TA and FA)?

Stock prices aren't insular, as such, technical or fundamental analysis does not work perfectly in pricing a stock. You can churn out all the financial ratios, analyse everything you want, and or apply technical analysis and find out the support and resistance points blah blah blah - then you draw a fully informed conclusion that the stock that you want to trade or invest in is worth $X but the market doesn't price the stock at $X just because technically the stock should be valued at $X.

Instead, the stock could spike beyond $X, exceeding your expectations or they can drop below $X, disappointing you. Why? Because the market moves as a result of several thousands or millions of investors out there with different expectations at what $X should be. Also, when a group of bearish investors outnumber a group of bullish investors, the the market will generally swing towards the bearish end. Investors and traders expectations change from day to day. This is why there's stock market volatility.

FA is good for determining what the value of the stock should be. TA is commonly used by traders to predict roughly how the stock is trending, whether up, down or sideways.

If you perform your FA due diligence and then trade using TA, why does the stock that you're analysing differ from your expectations that it should be $X?

Because that stock isn't insulated from the market. If FA and TA points to the stock being priced at $X but then tomorrow, President Barack Obama makes a sudden announcement that the US has been incorrectly accounting for the deficit. That instead of a $11 trillion dollar national deficit, the national deficit is actually $20 trillion, then expectations of the whole market in the US and everywhere around the world will turn bearish. Because of negative expectations, people behave negatively, they cut their spending, then businesses cut staff hours, then the government collects less tax revenue and cuts back on infrastructure and budgetary spending, which sees government employees made redundant and so on and so on. The stockmarket crashes and the negative expectation becomes a self fulfilling prophecy. It works conversely as well.

For example, if I decided to trade in CCL shares at $11.82 cents each and the stock market had a bearish month, causing CCL to drop to $10, does that mean that fundamental analysis is a load of crap? No. does that mean technical analysis is a load of crap? No.

Both FA and TA have evolved over the decades as a measure of valuing the price of a stock. TA evolved as a method in predicting price movements, particular for support or resistance. If enough people believe in those methods, then those methods will be influential on the stock market. If there are a lot of stock market traders who use TA thinks that CCL will find support at $10, they'll submit buy orders at $10 and then the moment that CCL drops to $10, traders activate their buy orders creating a floor. Large buy orders will indicate demand and CCL's price doesn't drop below $10. Again - a self fulfilling prophecy.

All stock prices are affected by several factors. With FA, you can identify a good stock that can survive recessions and any difficulties so that once the economy picks up again, they'll be back into a growing, profitable business again. TA is good as a general guildline to trade with but does not help in identifying which stock to buy and hold for the long term.

TA is superficial. If there's enough traders around using TA, then the stock price will behave roughly in line with expectations.

Basic technical analysis in action:

Technical analysis is also known as charting. Why? Because you use a bunch of charts and statistics to draw conclusions and trend directions for stock price.

Chartists use such measures as: Simple/exponential/weighted moving averages, Bollinger bands, volume analysis, stochastics, MACD, prices from open/high/low/close, line charts, candle charts, percentage change etc

You can have a perfect TA trading technique that makes you money regularly but if suddenly September 911 happened again and the stock market crashes - does that mean TA is rubbish? No.

TA is a rough guide, no matter what chartists' insist. Remember, share prices are not insular. They react to the entire market and if you just pay attention to your charts in performing TA without paying attention to the stockmarket (nationally and internationally) as a whole along with the general mood/behaviour of the population then you'll never know what hit you when your technical analysis fails.

Following on with the CCL example:

I've got a screenshot of CCL and drew in some rough support and resistance lines. This has some classic TA evident on the graph. This graph here demonstrates that chartists are around. CCL was $10.67 at its lowest point in June. In December, as the CCL stock price dropped, there would have been a bunch of buyers with buy orders to be excuted when CCL price reaches $10.67 or thereabouts. This creates a floor for CCL, meaning that in future, provided CCL doesn't get banned from sellling their drinks in China or India or where ever, then if CCL drops down again due to general market bearish behaviour, it's likely that once again, there will be a bunch of buyers waiting to buy around $10.67 again.

I've drawn in four resistance lines. They're all suppose to be green but I was too lazy to fix it up. For technical traders, they get twitchy when the stock price approaches any price resistance levels so they set their "sell" order at or just before those price resistance levels.

The current price is $11.80 If you bought today, provided there aren't any dramatic worldwide events or CCL didn't get banned from selling Coke in China, you would be looking at the following scenarios based on TA:

i) Buy at $11.80
ii) Market is bearish, potential loss is $11.80- $10.67 (floor price) per unit
iii) Market is bullish, potential sell order can be placed anywhere near any of the top three green resistance lines. Although the middle two green resistance lines have been reached a lot more frequently so as a TA, you would likely place a sell order close to those prices.
iv)CCL shares however has been generally trending sideways over the past 12 months. They're a blue chip stock though and if you're expecting capital gains like the ones investors got from Apple, VM Ware and Google then you're better off looking for a chart with good FA and an upward trajectory.

Along with those simplistic TA conclusions, TA will also look at volume and various other charts to analyse market demand. I personally prefer to start off all investments or trades with FA and then use TA, particularly the candlestick charts with the high/low/open/close prices on them or the simple line chart above. I also like to look at the 365 day price list with open/high/low/close prices. For intraday trades, buy and sell volumes are really useful. Although the biggest determinant of stock price movement is the general enconomy and the population's expectations.

The stock market reacts to future positive or negative expectations. All the FA and TA in the world won't predict the stock prices accurately which is why all the large investment banks, trading firms and hedge funds have economists to try and predict the general behaviour of the country. Or else they have contacts inside government organisations so that they know whether the Federal Reserves' Ben Bernanke or the RBA's Glen Steven will be raising or decreasing interest rates. Changing interest rates change consumer behaviours and as a result, that changes consumers' discretionary spending and this is what ultimately affects companies' bottom line, which affects their profits/expenses and ratios in the future and thus, their share price.



A question from one of the comments on that blog:

There is no one in the world who can perfectly predict how the stockmarket will react unless they're Barack Obama or Ben Bernanke for example (only because they control monetary policy which wields a lot of power and influence). Anyway, this is what someone wrote:

I have spoke (sic:spoken) to many people that claim they are millionaires from the stock market without disclosing how they did it. If you have made millions from the stock market please share your tactics here. What stocks would you recommend, what investment company (e-trade)? Do not answer if you haven't made millions in the stock market!

*The traders or investors who made millions from trading the stockmarket probably had just as much capital to start off with.
*Typically the millionaires from trading are the hedge funds and traders working for the investment banks, not the small investors who started off with $20,000 or whatever
*To amass capital gains of a few millions from just a few thousand dollars would mean trading frequently and as such, impossible to simply just "share" without including pages and pages of buy/sell history
*Why would millionaire traders "disclose" their entire strategy to you for free? What would they gain from you?
*They could recommend a great stock for you to buy today but that will be valid for today and today's environment. If you bought that 'great' stock today and then next week, Obama states that unemployment in the US has gone up to 15% and the sharemarket crash - who will you blame for the advice?? Will you tell them that it was poor advice?

In the long run, I've worked out that a simple buy and hold strategy works just as well as trading, if not better! Because of the 50% CGT tax deductions from holding a stock beyond 12 months and also holding the stock through interim and annual dividend periods means that I also get franking credits (although these are only applicable in Australia - I mention this because there are a several readers from America on this blog and I don't want to mislead you).

Related posts to stockmarket investing:
* Calculating break even for stock investing or trading
* Stock investing fundamentals and a slice of my portfolio
* Quiz to determine your risk profile
* Breakdown of my retirement asset
* Picking low hanging fruits first

Relationship & Money Agony Aunt: Bossy Kate de Brito

Relationship + money agony aunt: Bossy aka Kate de Brito

Bossy, an Aussie blogger, cross sections several sensitive personal finance topics that people can't really discuss with their family and friends and yet they need advice. She's like Australia's agony aunt on relationship + money. Not only that, the comments that she receives are funny, interesting or illuminating. Readers write in with their tortured scenarios and hope that Bossy and her illustrious readers will help them find a solution.

Read a few here of the personal finance orientated posts here:

• We have two young kids but he wants a prenup >219 comments
• Why do I have to pay just because I'm a man >119 comments
• My husband makes me feel like a bludger when I ask him for more money >365 comments
• Should I dump my boyfriend to help my ex? >114 comments
• I gave her Louis Vuitton and now I find her with another man >179 comments
• My boss kissed me. What do I do? >117 comments
• I'm renting from a relative. Why won't they help me more? >233 comments

Or you can read the quirkier blog posts on relationships, etiquette and social issues here:

• My wife has piled on the kilos, how can I tell her to lose weight > 236 comments
• Is it ok for my boyfriend to spit? > 103 comments
• I said no to a date with my fat friend, now they all think I'm shallow > 162 comments
• My boyfriend lives in squalor. What can I do? > 124 comments
• I've known them 25 years but they dumped me after the divorce > 68 comments

There's almost five years worth of archived material there if you enjoyed reading any of those posts.

Forget about peak oil and the future, high fuel prices is here today.

Oil prices have spiked again due to the recent turmoils and uprising in Egypt and Libya. When I filled up my tank on the weekend, it took $71.76 before my thirsty car was satiated !! The shock and the horror o_O This will eventually mean I'll have to switch back to public transport again with the trains. 

I wouldn't be surprised if it will take $100 and more to fill up my tank before 20011 is out. I'm hoping it won't, but with the current turmoil close to Saudi Arabia...

Are countries around the world experiencing fuel price rises?

Or is it just Australia? It's difficult to say whether Woolworths and Coles have increased fuel prices because their supply cost has increased or because they need to maintain their margin due to their discount fuel vouchers that they offer to shoppers when a certain amount is spent at their supermarkets. 

Have you decided what you'll do if fuel prices becomes unaffordable?

For the fortunate few who live near public transport facilities (trains/buses/ferries), they can always substitute driving their cars and use public transport but for the unfortunate ones who do not have any nearby facilities, they'll need to make plans for what they plan to do if fuel becomes increasingly unaffordable. Fuel prices are up. Fresh food prices are up. Processed food prices are up. Electricity prices and gas prices have gone up beyond the CPI rate. 

What can the Reserve Bank of Australia do? 

Pretty much, nothing. They can try and increase interest rates but that will just cripple mortgage holders, cripple investment loans, cripple small businesses who have borrowed funds to run their businesses. The problem is that the RBA and their monetary policy is mainly used to control consumer spending and reduce discretionary spending. No matter how high they increase the interest rates, they can't control electricity, gas, food or fuel prices because they're necessities and as such, demand won't reduce simply because the RBA has raised interest rates.

What can you do to help yourself (and incidentally help the environment)?

There are a few things that you can do if you find yourself in a similar boat in terms of rising living costs:

* Plan your travels using public transport
* Don't waste food, plan your meals, check your pantry and don't overstock nor overbuy. Australians buy too much food and waste a lot of it unnecessarily
* Unplug anything that isn't being used because they draw power 
* Insulate your home, install blinds and or curtains to keep heat out during summer, and retain heat in winter
* Install solar panels and solar hot water systems

What is break even analysis? How you can use the concept in analysing share trades

What does "break even" mean?

For a company -> When total revenue or sales equals total expenses

In general -> When you haven't made a profit and you haven't made a loss

If you haven't got any overheads, fixed costs or transactional costs then break even is very simple - if you sell the item at whatever it cost you to buy that item in the first place then that's considered as breaking even. If you sell the item at a price more than what it cost you then that's a profit.

Once you have overheads, fixed or transactional costs, then it gets a bit more complex to calculate the price that you need to sell your items or goods at to break even and not incur losses.

Examples to illustrate

1) If you buy an iphone for $800 and then sell it to someone else for $900, then you've made a profit of $100. To break even, you need to sell the iphone for at least $800

2) What if you rented a market stall for $30, bought the iphone for $800? Then you need to sell the iphone for at least $830 to breakeven

3) What if you rented a market stall for $30, bought 45 iphones at $800 each then what is your break even? You would need to sell the iphones for at least $800.67 each to break even. The maths: [(45* $800)+30]/45 = $800.67 per unit to break even. If you can sell the iphones at a price greater than $800.67 then you'll be making a profit.

It's so simple, not widely understood but yet so relevant in all applications - whether you run a business, whether you invest or trade in stocks or anything that involves buying and selling to earn a profit.

How do I apply the concept of break even in share trading as a practical scenario?

To buy or sell my stocks, it costs me $19.95 each time. So if I were trading in stocks, it would cost me $39.90 (the maths: $19.95*2=$39.90) to buy and sell. $39.90 is what I consider my fixed costs and what I use to calculate for my break even analysis.

Break even formula for trading stocks:

Break even price to sell each stock at = (quantity bought * buy price per unit) + total buy and sell costs

                                                                 quantity bought

Example 1:

i) I buy 2000 units of Coca Cola Amatil Ltd (ASX:CCL) at $11.83/unit = $23,660

ii) My transactional costs to buy and sell is $19.95 each way, therefore a total of $39.90

iii) Calculating my break even costs:

($23,660+$39.90)/2000 = $11.85/unit

iv) Therefore I MUST sell my CCL stocks for at least $11.85/unit to break even.

If I sell for anything greater than $11.85/unit then I've made a profit, which is known as capital gains.

Although if you're going to engage in trading stocks, then you also need to work out the opportunity costs and weigh whether trading gains will exceed the other uses of your funds - this concept however will not be explored in this post because it deserves a post of its own.

Before I invest or trade in any stocks, I ALWAYS use the above calculation to see what potential profits or returns are there. With fixed transaction costs, such as $39.90 used in the example above, then the more stocks you buy, the lower your break even costs. Let me illustrate using the above example to compare. This next example will see me buying 1000 CCL stocks instead of 2000 CCL stocks.

Example 2:

i) I buy 1000 units of Coca Cola Amatil Ltd (ASX:CCL) at $11.83/unit = $11,830

ii) My transactional costs to buy and sell is $19.95 each way, therefore a total of $39.90

iii) Calculating my break even costs: ($11,830+$39.90)/1000 = $11.87/unit

iv) Therefore I MUST sell my CCL stocks for at least $11.87/unit to break even.

Comparing the above two examples with the only variable being the quantity of stock purchased:

i) Assuming buy and sell costs are the same at $19.95 each way, and $39.90 in total

ii) In example 1, if I  bought 2000 stocks @ $11.83/unit, break even would require me to sell my stocks at $11.85/unit

iii) In example 2, if I bought 1000 stocks @ $11.83/unit, break even would require me to sell my stocks at $11.87/unit

In example 1, it only requires an upward price movement of 2 cents/unit to break even whereas if I bought less as illustrated in example 2, then I would need an upward price movement of 4 cents/unit to breakeven.

You would need larger price volatility if your transaction costs is flat but you buy a smaller quantity of stock for trading. Larger price volatility always implies larger risks.

For those keen on the maths behind the typical break even analysis (screenshot from Wikipedia):

Using the official BE formula:

X =  TFC

     (P - V)

Where X= unit sales, TFC= total fixed costs, P=unit sale price, V=unit variable costs

Using the numbers from my example 2, from above: X=1000 units, TFC=$39.90 to buy and sell, P=unknown unit sell price, V=$11.83/unit of CCL stocks

Because our CCL (Coca Cola share price) break even sell price (P) is unknown the formula becomes:

i) 1000=   $39.90

             (P-$11.83)

ii) 1000(P-$11.83) = $39.90

iii) (P-$11.83) = $39.90

                          1000

iv) P = $39.90  + $11.83

            1000

v) P = 0.399 + $11.83

vi) P = $11.87 to break even

The break even analysis applied in a business context:

The break even formula or concept is commonly applied in a business context, although it can be used in any situation that requires you to work out the point at which you incur no loss. Let's apply this break even formula to the iphone example from above, where P is the break even price that you need to sell each iphone at:

i) X =  TFC

         (P - V)

ii) 45 iphones = $30 market stall rental

                       (P - $800 cost per unit)

iii) P =       $30         + $800

            45 iphones

iv) Break even selling price per iphone would have to be $800.67 minimum

Thefore you must sell each iphone @ $800.67 each minimum if you want to break even, and more than that price if you want to make a profit.

Anyway, you can also apply that same concept to any of your investment calculations.

Wedding, weeding, gardening and zucchini plants

It takes a lot of effort and dedication to maintain a blog

What a crazy busy weekend. I didn't have time to blog. I was aiming for roughly three posts or articles each week but it does take a lot of effort to post regularly like that. That's probably why the bloggers with huge number of followers eventually quit their jobs to maintain their site (eg: Corporette - my favourite female blogger who blogs about fashion, lifestyle and working in New York's legal profession).

The weekend was flat out with swimming, an all day wedding to attend, gardening and the usual bunch of household chores that occupies the weekend.

Since I haven't had time to write about personal finance, I thought I'd post up some photos from the hectic weekend. I only had my Canon point and shoot camera with me so the images are rather blurry and not as sharp as they should be.

The wedding

A friend of mine got married on Saturday. It was warm but a beautiful day to get married. They were married at St Phillip's Anglican Church in Sydney - this is Australia's oldest parish and was originally built at the location in 1793. The current structure replaced the older structure in 1856. This is a snapshot of the church's interior:


Afterwards, the wedding reception was held at the QVB The Tea Room in Sydney:


The weeding and gardening

My parent's garden needed some weeding done big time so I helped with their garden. This is what hard, sweaty and back breaking work looks like, the before and after shots are below:



Even a spotty black and white butterfly couldn't resist the lure of the flowering mint plants:



The zucchini plants that my parents planted are flourishing:



Hope you enjoyed the photos. Our Autumn season has just started so no doubt there won't be anymore gorgeous blooms and summer fruit and vegetables any longer. Although rhubarb season will be coming around and there's nothing better than rhubarb and apple crumble. Or a rhubarb butter cake :)

Advice for Credit Card Debt Reduction

There are many credit card holders who have found success in finding their way out of loans. Some can find their way out by themselves and some use the help and advice from debt reduction companies, otherwise known as debt settlement firms. If you have borrowed a huge amount in the form of loans then you can find the following debt reduction advice helpful.

If you have outstanding credit card debt and are trying to find solutions on how to pay off your credit card debts, there are a few popular method and strategies to it. Sometimes it may be difficult when you're facing agressive creditors and collection agencies.

1) Snowball Method - List your debts from the lowest balance to the highest balance, pay the minimum on all your debt and divert all extra payments towards the lowest debt balance. This method is a moral booster although not the best, dollar wise. Keep repeating the strategy until your debts are paid off.

2)Avalanche Method - List your debts from the highest rate to the highest rate, pay the minimum on all your debt and divert all extra payments towards the debt that has the highest interest. Keep repeating the strategy until your debts are paid off. This is the best method that will ensure that you pay the least amount of interest over time. Although not as morale boosting as the Snowball Method.

3) Debt settlement programs - their target client are people who have debts over $10,000. An option if you're struggling with agressive creditors and lenders and just can't find your way out. They have experience negotiating with creditors for cheaper interest rates or to reduce the balance of your loan. Although there will be fees that probably apply.

4) Debt consolidation loans - Involves taking out a personal loan or organising a line of credit loan against your mortgage and using it to pay off your various creditors and lenders in one go. This enables you to refinance all the various loans into one, simple loan and usually at a lower interest rate.

5) Rolling the various loans into your mortgage via refinancing - This is always the best, however not always feasible for everyone. It's not feasible for you if you have no equity in your mortgage, if you don't have a mortgage or if your house is underwater (your mortgage balance is more than what your house is worth). If you have equity in your property, you can refinance your various loans into the mortgage and this will be amongst the cheapest form of financing. You have to ensure that if you utilise this option, you need to maintain your current payment so that you don't stretch out your debt for 25-30years. If you don't, then you'll discover that in 30 years time, you will still be paying for the dinner that you charged onto your credit card!

Negotiate with your creditors and lenders

Sort out all your bills and debts before you try any of the steps above. Call each of the creditors and see if you can arrange a payment option with them. If it's a small bill, see if you can get your creditor to reduce the bill with the condition that you can settle the bill immediately if they can assist by reducing the amount.

How you can erode your debts faster? Make extra repayments using the Snowball or the Avalanche Methods and always negotiate with your creditors. Keep them in the loop.

Charity has hit a minor road block - of the piggy bank kind

This little piggy is fussy about the coins that she will accept!

A piggy bank is just a piggy bank, right?! Not if you're a little piggy bank that's made in China...

When I wandered down to the local discount store, commonly referred to as the $2 shop, although this is a misleading misnomer because almost everything in the store costs more than $2 these days... I found this cute female piggy bank and bought one to hold money deposited for my charity fundraising. I didn't even realise piggy banks could be separated into genders of female and male until I realised that female piggy banks have eyelashes, and the male ones don't.

Each drink that I sell to raise money for charity is sold at $1/can, so it wasn't a problem if someone deposited a $1 coin or any other coin for that matter EXCEPT for the 50 cent coin. Maybe the coins in China aren't any larger than our 20 cent coin and this little, yellow piggy would have been fine if it was used to hold Chinese currencies. However in Australia, it wasn't serving its function properly lol

As you can see, the 50 cent coin is stuck. It won't go down!!!

I heart Japanese food, snacks, culture and their manga + anime

While being another random blog post, I thought I'd mention that there's an awesome Japanese grocery store in Artarmon(Eastern side of the station, the side with the least high rise apartments) that I found that beats the Maruyu Japanese grocery store (283-285 Clarence Street, Sydney NSW 2000) hands down. There aren't that many Japanese grocery stores in Sydney so finding a new one is rewarding.
The Artarmon one is awesome. Not only does it stock a very wide range of Japanese ingredients but it felt like I was back in Japan at one of their Seiko Marts or Lawson style grocery stores. It was quaint and full of imported stuff from Japan (bad for our economy but good for the taste buds). I bought a pile of random delicious goodness:

Lucky Mart Japanese Grocery Store, Artarmon

Anegawa Japanese Grocery Store, Artarmon

Working multiple side jobs for extra income

It's been a long time now since I worked two jobs simultaneously, or three jobs if I count assisting my parents with their work.

I never had a problem with working two or three jobs, working six or seven days a week. If it had to be done, it had to be done. Afterall, my parents had worked seven days a week for over two decades with their business and never once complained about it. BUT... unlike a lot of personal finance bloggers, I never had any sort of crippling consumer debt to pay off. The extra income allowed me to buy stocks, go on extravagant holidays, buy investment assets and indulge in my various hobbies and interests.

Why are some people working multiple side jobs?

So do you think your life is tough?

On the weekend, while busy shopping, I chatted with a friend's hubby who updated me with the news that he's been working three jobs. A full time Monday to Friday office accounting role, Tuesday and Wednesday night doing restaurant and grocery store work and Sunday doing grocery store work. He's been trying to erode the mortgage and save some extra money for travelling. He's not the only one at that store doing three jobs. There was another guy that told me that he was a banker Monday to Friday, grocery night filler for 5 nights a week and during weekend daylight hours, worked in Dick Smith Electronics retails section.

If I thought they both worked hard, but then there was another guy that told me that he worked 7am to 4pm at a science lab and worked 5pm-10pm at the delicatessen every Monday to Friday and a full 8 hour shift on Sundays.

All three are working on average 70-90 hours a week holding down two or three jobs each. All driven by different factors - trying to pay the mortgage off early, trying to support parents who live overseas or trying to support the wife and two kids. Some people choose to whinge about not having enough income to buy the things they want and do the things they want, while some choose to work hard to earn that little bit extra so that they have the freedom and choice for their future.

A few years ago, when I raised the issue of multiple jobs and working 70-90 hour weeks, a friend of mine replied, "Why work harder? They should all be working smarter." True true, however, working multiple jobs can allow you to build your wealth or erode your debts much faster. If the idea of cutting back on current expenditure or luxuries in life is painful to you, then you could experiment with the option of working a second or third job while maintaining your current lifestyle. As long as you divert that extra income into saving/investing or paying off debt, then you shouldn't have to live so frugally nor feel guilty about it.

Ideas on how you can supplement your income with side jobs:

• Do contracting work on the side within your area of specialty, knowledge, experience or strengths. Examples: a programmer can write websites on the side, I.T consultants can do I.T contracting work on the side, web designers can do design work for weddings, parties, events on the side.
• Have a 'side hustle'. Examples: teaching music/guitar/piano/dancing, dog walking, baby sitting, gardening, mowing lawns, cleaning, blogging, selling items on Ebay/Etsy/Artfire, catering for birthdays, functions and parties if you have culinary skills, house sitting, coaching a sport team, tutoring a variety of subjects. There are plenty of pf blogs out there exploring the many ways in which you can create income on the side.
• Invest in assets to build passive income streams to replace your multiple jobs. This is my favourite option. If you're lazy then this should be your preferred option too. I label this as a side job because it's just as time consuming as a job. It requires a lot of hard work, effort and number crunching to find assets such as positive cash flow properties and good dividend paying stocks. Also to be diligent in ensuring that your funds are earning the highest market interest rates.
• Working in a part time side job. Examples: Retailing with clothes or food, waitressing, at stadiums or sport events. This one doesn't take advantage of your existing skills, knowledge or experience so will probably pay a lot less than contracting in a side job that uses your existing skills. Although it can add variety and allow you to meet other people from different walks of life.

LA Times and their money makeover disaster stories

You can read about the money makeovers at http://www.latimes.com/business/la-fi-money-makeover-furry-20110220,0,849848,full.story

A lot of the money makeover people featured could really do with second or third jobs to catch up and solve their financial problems. Although anyone with a lots of debts need good defense (cut spending) and good offense (increase income). Ever since Boston Gal started featuring these money makeover couples, I've been reading the makeovers.

Money makeovers involves cutting back on lavish expenditure, looking for how to increase income, how to budget, facing up to reality and how the disaster started to gain momentum and how to reverse that disastrous financial slide.

Would I ever consider working multiple jobs again?

Having time off to spend on personal interests and hobbies is a great way to balance life but if reality required me to hold down several jobs simultaneously, I wouldn't complain. The good thing about saving and investing to create passive income is to actually create choices and flexibility in life. At this point in time, if I lost my job, I could survive indefinitely without working.

It may not be surviving in luxury, but the basics would be covered by the passive income stream. That's what my ultimate goal is. To create choices for my future self and create options for pursuing further dreams, whether that be doing my own thing, or going down the philanthropic, volunteering route.

If you're stuck in this apex of life, holding down multiple jobs and wondering if it will ever end, you need to set some time aside to actually analyse your situation, form a budget and start finding out how you can force yourself to save. With those savings, you can learn to invest and build your investment portfolio whether that be from stocks, properties, bonds, CDs, deposits, interest or whatever. Your future self will thank your current self.

As a side note, thanks to those who have subscribed to my blog and those who have returned to read my new posts :) It's always nice to know that there are readers out there who return to read my new posts and that I'm not just writing for myself and for the sake of writing.

Peform monthly or fortnightly financial health checks for optimum results

Everyone should perform a financial health check at least once a month, if not fortnightly.

The benefits are vast:

1) You can see what bills need to be paid, what you've paid, tally up any expenses if you track them and update accounting or financial management software if you use them
2) If you have a budget then you can see how your actual income and expenditure measures up against your budgeted ones
3) If you've got savings in high interest accounts, in term deposits or whatever, then you can have a quick hunt around to see if there are better rates on offer, negotiate for them with your existent bank or set up new accounts and transfer your funds into them
4) You can check to see if you've been meeting your liabilities and have been making payments against outstanding debts
5) If you've got funds in transactional accounts not earning any interest, then move them into a high interest account
6) If you've got debts or bills to pay, you can figure out how you're going to allocate your income to pay them, instead of waiting until the due date comes around and then panicking about how to pay them

Recently I just performed mine. It involves doing the following:

1) Checking the interest rates on my online saving accounts and ensuring that I'm receiving a competitive rate on my savings
2) Pay my bills, check for future bills that may be forthcoming, check my expenditure for the month, compare with previous month and if I can be bothered, compare with last years
3) Recurring bills such as insurances, checking to see other offers out there and requesting or changing to something more competitive if I can't get a better deal
3) Finding out the balance of my superannuation retirement funds, the balance of my HECS student debt, checking the market value of my portfolio of stocks (although the iphone Bloomberg app is fantastic for this - it will automatically update the prices whenever I'm on the WiFi)
4) Check the social events that are coming up and the gifts that I have to buy (birthdays, baby showers, special events) or give (most wedding gifts require money to be given as gift since most couples are already living together)

The results of my recent financial health check:

1) (good) Savings account were good, all up for 2011
2) (good) Interest and dividend incomes were good, also all up for 2011
3) (good) Stock portfolio was good (capital gains), up for 2011
4) (good) Superannuation retirement fund was good, also up for 2011
5) (good) Expenses for Jan/Feb 2011 was down from Jan/Feb 2010, which is good
6) (good) Investment loan liability balance for Feb 2011 is down from Feb 2010, which is good
7) (stable) My HECS student debt is pretty flat, have been contemplating making another lump sum payment in April. I had the plan to make an additional lump sum payment in April off my HECS / HELP debt to drop the balance to 30% (ie have 70% paid off)
8) (good) Net wealth balance is up comparing Feb 2010 versus Feb 2011, which is good

No Euro trip for 2011, bummer:

Unfortunately the Euro trip will have to be for 2012 instead. It turns out, I barely have any annual leave days left after burning through so many days in 2010. So as a result, the 2011 savings/funds will be utilised in four possible ways:

1) Lending some to my friend to buy the replacement car since it was my fault that we were in that region when the guy wrote off the car and the insurance payout is insufficient for buying a replacement
2) Spending some on a snow trip somewhere, either Australia or New Zealand
3) Buying the investment property or
4) Doing nothing and buying some(all) toys on my wish list

Note on Jan/Feb 2010 vs Jan/Feb 2011 - I had a lot of one off expenditures in Jan/Feb 2010 which I didn't fortunately have to incur for Jan/Feb 2011. Expenditures such as passport renewal, prepaying for tickets etc for our trip to Japan and Hong Kong, medical expenses. I got really gouged by medical expenses last year to the tune of $3,314 and wrote two post on medical bills:
* Navigating our health insurance
* Poor health can send you broke

Say no to Luddenham, Greendale and Bringelly Cemeteries and Crematoriums

There's been an update at the http://noluddenhamcemetery.blogspot.com/ site. All objectors are encouraged to contact anyone of the members for information and to join the protest against the cemetery and crematorium applications in the areas of Luddenham, Greendale and Bringelly. Email Duncan at nogreendalecemetery@hotmail.com or send an email to sascha_vuk@hotmail.com

If you would like to oppose the Luddenham Memorial Park (cemetery and crematorium) proposal, then refer to my other post which you can read by clicking here: Luddenham Memorial Unwanted

Will the children of tomorrow look back upon our generation today and say that we've made a bad decision in land use policy? Agricultural land in Australia is a finite resource and it really is time that the Government and local councils take a good look at Australia and its food production future. Particularly since NSW is the last bastion of viable agricultural land that isn't affected by extreme drought, flooding and cyclones.

1) The urban sprawl from coast to inland has seen development built upon the best and most fertile land already in Australia. Inner city and coastal regions receive regular rainfall, the soil is fertile and perfect for farming, however, housing and apartments have taken over the farms and orchards and pushed farmers further inland

2) Now it's a case of agricultural farmlands going up against competing land uses such as: cemeteries and crematoriums, gas fields, mining, viticulture, breeding and urban development.

3) Mining is something that will provide revenue for a period of time and after that, nothing. It will pretty much rip the land into pieces, pollute the area and then any attempts at land rehabilitation will take decades to repair. Cemeteries as a land use option, is just as bad as mining. It affects watercourses and groundwater, the drainage and water runoffs are heavily loaded in nutrients which will ultimately pollute local creeks, watercourses and dams. They both have a single use policy. Use once for a period of time and then the land is useless afterwards.

Will the Australian public finally wake up and realise that their food is in danger of being raised and grown in areas surrounded by cemeteries and crematoriums? I was raised in an agricultural background and I find it so sad that farmers are now having to fight against developers from building crematoriums and cemeteries adjacent to their land. It's also sad that they have to protest against miners from mining the land.

The quality of our groundwater and aquifers are currently one of the best in the world but at the rate that we are spiralling downwards, the future may be looking extremely bleak for food production. Why are councils even considering these type of development across the remaining bits of fertile land?

Australia's population is small at 22 million. Instead, there should be intensive development clustering around CBDs (Sydney, Parramatta, Hornsby, Liverpool) and close to train lines to encourage our population off the road and onto environmentally friendly options. Why was the Epping to Chatswood line built? It was to connect the city with the North Ryde Macquarie Park business park.

The North Ryde Macquarie Business Park is one of the biggest waste of public transport infrastructure. The new train stations are surrounded by low rise office buildings. These should have been developed as high rise office towers so that more businesses can rent out a suite near the station and again, reduce the urban sprawl and reduce the amount of cars on the road. It's the biggest failure of new train lines - there are so few office workers getting off at the Macquarie Park/North Ryde trains stations that it really was a piece of infrastructure that should have been built elsewhere - particularly out in the wild wild west.

When will local council realise that developments without infrastructure is unfeasible? When will they build the infrastructure first and then bring in the developments?