By Amanda Morrall (email)
1) The $200K mistake
It's been awhile since I checked in on Mr.Money Moustache. Love his blogs. Although I got a laugh out of his latest talking about how he made his own air-con on a long, hot road trip by spritzing cold water in front of the air vents, I found myself more engaged by an older post that I came across detailing his most expensive financial lesson. It relates to a home building business he undertook with a friend as a way to get ahead and how it all went to custard because he ignored early warning signs of a bum partnership. A bit long winded but poignant, philosophical, and funny too.
2) Compounding interest
Earlyretirementextreme.com - is similarly themed around "simple living, anti-consumerism, DIY ethics, self reliance and applied capitalism." The latest guest blog profiles a few different spending archetypes and their starkly different financial outcomes illustrated by an awesome spreadsheet. It drives home the powerful effect of compound interest. Thanks Neil for drawing my attention to it.
3) Women in finance - a retrospective
I just about choked on my coffee after reading about Melissa Fisher's retrospective on women in finance, fragments of which were published in the Guardian by reporter Joris Luyendijk who writes a banking blog for the U.K. paper. The piece, which looks at the trajectory of women in banking from the '50s, opens with a bleak portrait:
This was life on Wall Street only 50 years ago: "The secretaries all had to wear hats and gloves. In the bathrooms, they had light bulbs with the partner's [boss's] name. The partner would ring you up. If you were in the bathroom, you had to run out immediately."
One question on an entrance exam paper for a trainee programme at Merrill Lynch in 1972 read: "When you meet a woman, what interests you most about her?" The correct answer was beauty. Low scores were given for those who answered intelligence. There was, of course, no question about what to be interested in when meeting a man.
4) Too poor for our houses
Another affirmation that our housing market is over the top. The Economist, in its latest housing report, ranks New Zealand the sixth least affordable as measured by income to house price ratio. The New Zealand Herald carries the details. Get a load of the house pictured at the top of the story, a two-bedroom weatherboard dollhouse that sold in Sandringham for $1.1 million at auction. Ridiculous.
5) Puritanical economists?
Roving economist Marina Adshade, in her latest Dollars and Sex blog, reports on the redistribution of wealth set to take place in Tampa Bay as part of the upcoming Republican National Convention. The sex industry there is ramping up its numbers in anticipation, the New York Times has reported. Adshade takes a closer look at the economic ups, and downs, and whose driving it. Apparently not economists. Too funny.
To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall
11 Comments
That sale in Watea Road makes no sense.
I haven't been to the auction rooms for a couple of months but really $1.1m for a 2 unit site that far out in Sandringham (almost at Mt Albert Rd) with a tiny 50s house seems unbelievable.
A big very tidy (refurbished) 2 flat villa on a flat quater acre in Arabi St (a much better street close to the Mt Eden border), easily subdividable went for only $1m neat, 2 months ago.
I could tell the market was getting hot a few months back, but this is pushing the boundaries.
A 300m2 slightly faded but quite stately 1920s home on the Remuera ridge with views to Devonport on a full 750m2 section only went for $1.25m 3 months ago. $1.1m is about what you expect to pay for a big renovated villa in a lovely street in Mt Eden on about a 600m2 section (actually I bought a couple of those just 3 months ago both in the 9s).
I thought you were a property investor SK? That's a phenomenal price for out there.
$1.2m in Grey Lynn gets something pretty good which would be a better deal than that thing in Watea Rd.
Houses similar to the Watea already cross leased have been selling around the late $500s early $600s in the last few months, so this values vacant 375m2 sites in the area at around $600k plus!
The Government needs to sell state houses into this market ASAP!
The Merrill Lynch exam question reminded me of a Harry Enfield skit, so I thought I would share the link for others http://www.youtube.com/watch?v=SjxY9rZwNGU you have to laugh!
Make a start with housing affordability by getting rid of foreign landlords, no ifs, no buts, no maybes, out! It is getting our own people affordably housed that matters, not lining their pockets. Secondly, councils need to pull their horns in and be made to put things in place that make putting up really affordable and means under 250k houses do-able, things like rubber stamping simple plans that are used more than once. Just somewhere to start from
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