Thursday, June 18, 2009

Shows in your eyes and purple dragons.

I try not to be one of those mothers who go on about how wonderful their kids are, but today they've been pretty cool and it's fun to sit back and enjoy that. Besides, it's my blog!

Widget comes into bed with us in the mornings, and sometimes she's a pain and sometimes she falls asleep. Today was a sleep day, and when Midget and I rolled over this little voice chirped

"Good morning Mummy!"
"Good morning, sweetheart, have you been asleep?"
"Yes, I've been watching a show on my eyes."

Seriously, is that not the best description of a dream you've ever heard?

"Did someone tell you that?"
"No Mummy, it's a dream. Shut your eyes ... See! there are

It's her daycare day, and she badly wants Midget to go too, so she's been prattling on about how she will look after her and

"if the meanie boys go near her I'll say Stop! That's
my sister! Leave her alone!"

She's not convinced, but Midget and I are really enjoying our days together.

We have a little purple rubber dragon toy that Midget is not sure about, I don't know if it is the rubbery feel or if it looks scary to a one year old. I was hanging out washing when she started calling. I went over to see her pointing at the dragon, which was lying on its side. I picked it up, so she started talking and pointing more. I patted it on the head and that really set her off. She spent a good five minutes getting closer and closer but not being able to bring herself to actually touch this thing, all the while talking away at the top of her voice. Then, she went and got another toy, and sat there poking the dragon with the toy and jumping back! She tried another one and managed to knock it over, which led to actual tears so I had to pick the poor dragon up and show her it was alright. A bit after this she got up the courage to touch it with her own finger, looking over at me every time to check that I could see what a big, brave girl she was.

Kids - they're the real show that never ends.

Sunday, June 14, 2009

Passive income

Second post on the money theme, bearing in mind this is all based on my use of Kiyosaki and I can't take any credit for it, except in the translation. Any errors or misunderstandings are mine. I am not an accountant, just someone who has been managing my money for a few years.

In the first I talked about wealth, and concluded that it is about not having to work because you can live off your passive income. So wealth is really simple - accumulate things that give you passive income. No need to read any more! Well maybe. What is useful here is a redefinition of assets and liabilities. These are not the definitions an accountant or bank or the ATO uses, these are definitions that make it easy to think about your own finances.

Asset: Something that earns passive income. e.g. a rental
property, a book you've written, shares that pay dividends.

Liability: Something that costs you. e.g. a negatively geared
property, a boat, your home.

See? Very different to your bank, which will almost certainly count your house as an asset. But your house will not help you pay your monthly expenses. Anything negatively geared will not help you pay your expenses either, because it is making a loss.

In fact DH and I don't talk about negative or positive gearing at all - we classify our investments as in the black or in the red, assets or liabilities. If it's a liability and we can see that it's going to remain a liability, we ask ourselves exactly why we are keeping it. Most people's answer to this is that they are after the capital gain. In other words, they're gambling. They are betting that the market for whatever it is will go up. Depending on many things, that may be a good bet or a bad bet, but it is still a bet, be very clear on that. Isn't it better to have cash in hand?

But what about taxes, you say? Negative gearing decreases your tax.

True. Let's use some simple numbers to look at that.

Say I make a $100 loss on my negatively geared rental property. That means that I can reduce my taxable income by $100. Assuming I'm in a 30% tax bracket, that means my tax is reduced by $30. Woohoo! I made a loss of $70!

Say I make a $100 profit on my positively geared rental property. That means I have to increase my taxable income by $100. Assuming the same 30% tax bracket, that means my tax is increased by $30. Woohoo! I made a profit of $70!

Obviously this is much simplified, there are a lot more complicated situations where your options will be different. But this week's lesson is:

Look for things that will make you passive income right now, today. If there isn't money in your pocket at the end of the month, why are you holding on to it?

Tuesday, June 9, 2009


Widget has a new word. Kyive. It's heard a lot, usually in sentences like

"Kyive a drink?" or
"Kyive one of those?"

It is better than her other common word, gemmia, which goes down like a lead balloon. But there are beginning to be sentences where I don't recognise a single word in English, so I think it's time to slow down a bit.

Monday, June 8, 2009

Money, Money, Money - Wealth

A bit of a different one for me, I can feel a series coming on plus a shameless plug.

"Rich Dad, Poor Dad" by Robert Kiyosaki and Sharon Lechter. Buy it, read it, get Cashflow the game and play it.

This is not because I've just read it and think it's great. This is not because I know anything at all about economics. This is because I read it many years ago and I've been following it ever since. I gave a copy to DH, who never ever reads, and he now has the whole series. He has bought them as presents for lots of friends, and especially his sons. And just say that DH and I are in a far better financial position than your average teachers, including allowing me to be a SAHM with an extremely expensive hobby (nappy businesses don't make money!).

So bearing in mind that all of this is just my paraphrasing and the things I've taken from his message, I'm going to start talking about the bits that have had an impact on me.
  1. The definition of wealth

Apparently this is from Buckminster Fuller, who is fascinating in his own right. It's extremely simple and precise and makes a lot of sense. Basically, think of all your expenses. Wealth is when you can cover all your expenses from passive income. In other words, if you lost your job tomorrow, how long would it be before your expenses eat you alive? How long until you would run out of money? If the answer is never, then you are wealthy.

The philosophical reason I love this definition is because it discounts work. As I've said in previous blogs I think we put far too much emphasis on work, to the detriment of our health, happiness and families. This definition states upfront that the aim of the game is to do away with work. Or at least the need for work. If you have something you love and want to keep doing, fantastic. But I think we would all love to have the option of stopping for a while and the freedom to set our own direction.

The practical reason I love this definition is because it then becomes so simple to see what you have to do to achieve wealth. You either need to decrease your expenses, and/or increase your passive income. Decreasing expenses only works so far - we all need to eat. And there's not much point in not needing to work if you have to sit at home all day. So ideally there will be a bit of both.

What's passive income? Obviously, given I'm talking about not working, it's income you don't have to work for. So royalties, rent, dividends, interest payments, income from a business and things like that. It's the things that will still be there, paying your expenses, when you get back from your 3 month world tour. I'm discounting welfare, because that is income you have no control over. I don't think we can call it wealth if it depends on the whim of the government.

So how long could you live? (And no, we're not there yet, darn it.)

Tuesday, June 2, 2009

Here's a clue

I was just going through all the clothes drawers getting ready for winter, including DH's sock drawer.

Here's a clue, darling, the tiny little pink socks aren't yours. No wonder I can't make pairs for Widget!

ETA - turns out it wasn't his fault, there was a conversation this afternoon:

DH "I don't have any socks."
Me "Did you look in your drawer?"
DH "I looked this morning, there were no socks."
Me "Did you look in the third drawer?"
DH "I have a third drawer?"

Turns out this is what happens when Widget helps put the clothes away.

Monday, June 1, 2009

We went for a nature walk and found ...

a potato and an onion!

Someone obviously dropped their shopping on the way home :) Incidentally, it's our first really cold day, and my girls decide they want to go for a walk, what's with that? We only went around the corner and across a vacant lot, but Midget actually walked herself and Widget took her tricycle with a little basket on the back. They were so cute all rugged up, we're generally a nappy and t-shirt type of family, when we can get Widget to wear anything at all.

I've decided that the best way to cope with Widget and come up with different things to do is to have a theme every week. Yesterday she said she wanted to go for a walk, so I thought we'd make insects our theme. It's working really well so far, she cut out and decorated a butterfly yesterday and today we glued patty pans together to make a caterpillar. Next craft activity will be a cocoon, I might use toilet rolls for her to make one, then we can talk about the lifecycle of butterflies :)

Then today we did our nature walk, and read some books on butterflies. And this morning she discovered an earwig outside, so we spent time watching it and putting rocks in front of it or socks over it to see what it would do. We collected a whole heap of things on our walk, and I'm going to use them for something later on.

It's just making it easier to think of different activities, instead of generic 'drawing' or 'outside.' I feel like I'm teaching again!

Wednesday, May 27, 2009

Exquisite Timing

I love my daughter, I really do. Even when I want to strangle her.

It's been a tough week (and it's only Wednesday!), DH is away and she hasn't been well. There has been no sleep between the two of them, Widget took over 2 hours to get settled in the middle of the night, then she has been coming into bed with us and generally a good time has been had by all. In retrospect buying the caffiene free diet coke was probably a mistake.

So last night I decided enough was enough, she had to sleep in her own bed.

Now to set the scene, she'd been revolting all evening. It started with tears because she didn't want to leave daycare, yelling at her sister, taking things off her, yelling at me when I didn't do what she wanted, yelling at me when I did do what she wanted. All the hallmarks of an extremely over-tired little girl. We'd finally had a good time reading books on my bed, then started getting ready. Daddy phoned, which was good, but there was another fight over her jammies, and Midget hit her head while I was trying to get Widget dressed.

Well then I have both of them in tears, but finally manage to calm them down. We go through the toilet, drink and get Widget into bed. I say goodnight and promise faithfully that I will come back as soon as Midget is asleep, when Widget bursts into tears again. I'm pretty annoyed by this stage, but then realise what she's saying through all the sobbing.

"But Mummy, I love you so so so much."

Now how can you be angry about that? So I put Midget down, climbed into bed with her and gave her a big cuddle, ignoring Midget's yelling. When she calmed down I got Midget to sleep, and of course when I went and checked Widget was sound asleep. She slept through the whole night in her own bed, and we've had a wonderful day today.

I knew babies have a wonderful sense of self-preservation, obviously it continues for a few years.