Money update

My last money update was done on my Chapter 5 blog back in March! Since then, my rolling monthly balance hasn't changed much.

1 May 2005 = $22,930
1 Jun 2005 = $20,140
1 Jul 2005 = $22,128
1 Aug 2005 = $22,136
1 Sep 2005 = $23,711
1 Oct 2005 = $21,655
1 Nov 2005 = $20,455
1 Dec 2005 = $27,344 ($8000 tax return)
1 Jan 2006 = $27,009
1 Feb 2006 = $8,458 ($20,000 new investment)
1 Mar 2006 = $7,856
...
1 Jul 2006 = $9,291 ($2500 new investment)
1 Aug 2006 = $11,231
1 Sep 2006 = $5,075
1 Oct 2006 = $7,565
Today = $13,127

My monthly balance should dip every three months when I pay out my investment syndicates (as can be seen in the September balance) and fluctuates depending on when I receive/pay money, but otherwise it seems to hold fairly constant and at a healthy level.

There is a gap between March and July 2006 because my St George account deleted those records for some reason. I would guess that the June balance was also low following my syndicate payment.

Comparing the July and October results (at the same time in the synidcate cycle) it appears that I have spent more than I have been earning while in Europe -- which is as expected. But the relatively cheap month I spent with my parents and the $1000 I won in a recent essay contest should help (hence my healthy current balance). As I only have one more month in Europe it shouldn't be a problem.

Internet companies

Ouch! My family has lost a bundle of money recently as two internet companies that we were involved in have crashed and burned.

The first was built around a series of applications that seemed to have wide interest in the banking and finance industry. The problem is that the directors had a nasty habit of spending money (on yachts and holidays) before it came in and left the company with a liquidity problem. Some poor guy lost (not us) lost A$1.6 million!

The other opportunity was regarding the idea of a 'Virtual Credit Card' that you could get through the internet with little hassle. Such a card can offer anonymity, greater security (as it offers disposible credit cards so you can always use a new number) and convenience for people who want easy access to a US dollar credit card. This venture has fallen over seeminly due to a personality conflict and the idea is still there. One option is for me to go back to Australia and try to push this venture forward.

But as my dad now says... better we stick to what we know in the future.

Syndicate payment: August

The second regular (3-monthly) payment to my syndicate group happened in early August.

For my main syndicate (sub-division) I have seven investors who put in a combined total of $105k. With a return of 5% a quarter that means I paid $5250.

During this quarter I also took on new money for two additional investment opportunities. The quarterly payments for these investments are 3% (sub-division2) and 4% (Seaborne). Because this money was only active for 1 or 2 months in that quarter, I paid the returns pro-rata.

The next payment is due in early November. Reports from the developers indicate that the sub-division is going better than expected and that the Seaborne development is going slower than expected, but with no reason to fear.

Investment House

Over the past few years I have occasionally toyed with the idea of setting up a diversified investment house, probably offshore.

This is similar to what Club Invest offered, before they made a horrible investment and had to be liquidated. That shows the rist of such a venture. But many other similar institutions remain and if the investment strategy is careful, diversified and with good DD then there is no reason the idea cannot be very successful.

My suggestion innovation on the theme was to offer such a product to relatively low-wealth individuals by having a low (or no) minimum investment.

In brief, the idea was to offer:
(1) no fees for entry, exit or management;
(2) money can be deposited and withdrawn within a few days (not months);
(3) accepts small investors, with as little as $100; and
(4) a fixed return is paid every month.

Regarding the size of the fixed return I had a few ideas. One option was to set up the investment house with a relatively small monthly return (1% per month) but include a sponsorship scheme where you also get 0.1% return for anybody you introduce, and anybody they introduce, down 5 levels. Alternatively, the investment house could simply pay 1.5% per month.

I haven't pursued this idea any further for several reasons. One is that there is a lot of bureaucracy and legal issues to work around and another is that I'm not sure if there is much of a market for high-risk, high-return investments for low-wealth people.

Current investments

"Humphreys Corporation" currently has the following investments:

* SFS forex trading
* Jokarn property development
* Hilbury2 property development
* Kia property development
* Seabourne property development loan
* D&P property sub-division (1&2)

Of these, I have sold "reserves" to other investors for:

* Seabourne property development loan
* D&P property sub-division (1&2)

As an individual I have the following investments:

* Sonshine property development
* Charnwood house (Canberra)
* Birchwood house (Sunshine coast)

Ongoing costs

Some costs of business in recent days include meeting with Trish, Duncan and Freya (among others) in Hobart, meeting Darren, Philip, Adrian MK, DaveM and Michael in Canberra and Luke and DaveL in Sydney.

Before that trip I also had meetings with David Coyle and Tony Hanrahan in Brisbane, and Dazza and Afe in Caloundra.

I also have the cost of company registration (about $500) and fees to the accountant (about $200).

Investment opportunities

At the moment I am coordinating my first syndicate for Humphreys Corporation.

The product is a share of the returns from an investment in a property sub-division in Redbank Plains. I wrote about the opportunity on my personal blog. The product returns 5% a quarter and goes for 12-24 months.

A few other opportunities look promising for next year. There is a unit development in south Brisbane and some build-and-rent deals in Sydney.

It is illegal in Australia for me to take loans, so following the advice of my accountant I am issuing "reserves". While an investor has a reserve they receive a return on the reserve value and at the end of the invetment they get their reserve money back.

Tax Return for 2004/05

Tax return time. How painful.

For tax year 2004/05 I had a gross income of $6081, from my investment with SFS trading. I also had expenses of $6081, which leaves me with no net income and therefore no tax liability. Yay.

My expenses are:

Directors fees -- $3021
Bank fees -- $60
Telephone -- $300
Internet -- $500
Stationary -- $100
Depreciation -- $600
Networking -- $1000
Travel -- $500

Telephone fees come from my Australia number as well as travel phones/SIMS in Indonesia, Singapore, Thailand, China & Korea. I estimate telephone costs of approximately $600. However, half of this is personal.

Internet fees are estimated using an average 5 hours a week @ $2/hr for 50 weeks = $500. Depreciation is 50% of the cost of my PDA-phone. Travel is an estimate for travel costs to Qld to check on my investments.

And no, networking wasn't a rort. I have factored in $200 per meeting with five meetings (1) David Martin & Monette from ASEAN Secreatiat in Jakarta (2) Tony Hanrahan, PWC, in Jakarta (3) Chris Rose and Audrey Chia, economists, Singapore (4) Ashley Davies, economist & investor, Singapore (5) Tingsong Jiang, economist, Hong Kong.

I didn't claim my lost mobile phone, I didn't claim the flights necessary for the above meetings, I didn't claim any vehicle costs, I didn't claim any of the bills associated with the company registered address, and I didn't claim costs associated with other psuedo-meetings with other potential investors. I think I've been reasonable.

Introduction

This blog is for information related to my money matters and how I can continue to finance my life. Speaking of my life -- that is documented over at Chapter 5.

For much of my money matters I use my registered company "Humphreys Corporation" which mostly has investments in property developments in Australia.