Sunday, January 14, 2018

One expensive purchase

I apologize for not writing much on the blog in the last few months. A lot of things happened and I'll talk about the biggest one of them all.

We bought a house.

This is by far the most money I've paid in my life. The one before that being the car at almost 1/50th the price of the house. :D

Now, the house we ended up buying was very small - 3-bed-roomer with a single garage - compared to what we originally thought we could afford. The land is a mere 220m3 in area. The Melbourne market is really competitive and house go for unreasonable prices. It is still a bit saner than Sydney market though.

Also, the area we bought was an area we didn't even consider initially. We bought in Mernda, which is about 35km North of Melbourne. 35km is not bad at all, but I work in South Melbourne, which means I have to travel through the city to get to work and back home. The average speed in the city is about 10km/h (i.e. it takes 30 minutes to travel 5km).

We had a decent amount of money saved up, but since I'm the only earner in a family of four, the amount we could borrow from a bank was very limited. We bought through negotiation because we couldn't handle the risks of going to a public auction, although we could have saved some money with the latter since it is transparent. The risk was that at the auction, your offer is unconditional. When buying through negotiation, you can do a conditional offer - subject to finances getting approved being the most common. If the bank doesn't lend you enough money, then you don't have to go ahead with the purchase. You don't have that option when buying at an auction and the broker advised against it because if the valuation doesn't come at the market price and the bank won't lend you what you need, you will have to find some mean to fill the shortfall. If you have the backing of the family (locally, that is), then there is less risk because you can find someone to lend that money easily. But not for us.

By the way, we didn't have to pay stamp duty for the house because we were first home buyers and they didn't have to pay stamp duty if the price of the property was below 600k and ours was well below that cutoff.

I don't want to say how much the house was, but it was between AUD 450,000 and 500,000. The mortgage is for 30 years at 3.69% fixed rate for the first 2 years. We put AUD 110,000 towards the house and the rest came from the mortgage. Our mortgage is not that large because we put a large amount in, and the monthly loan repayments ended up being about $150 more than what we were paying for rent at where we rented before. Not too bad, but it will rise in the future. Hopefully, I will be earning more by then which will cancel it out or put us in a slightly better position. Hopefully....

I'm happy that finally, we have a house. It would have been great if we could go for a double garage house because we would need to buy another car at some point and the Aurion being the beaten up one will have to settle for parking on the driveway.

I will write about things I learned in the house hunt in the coming days. Might come handy for someone or for me again in the future - who get to work and back home. The average speed in the city is about 10km/h (i.e. it takes 30 minutes to travel 5km).

Friday, October 20, 2017

Cutting down on waiting times

I wrote in a previous post that I got a new job in the city. While I love the job and the work I am doing because it is both challenging and I get to learn a new thing almost every day, there is one real inconvenience I have to face every day. That is commuting to work.

I have gotten used to the 1hr commute on the public transport. On a perfect day, it can be 50 minutes, but it can stretch as much as hours and 20 minutes. The actual I am on the move is about 35 minutes: 5 minutes on the bus, 15 minutes on the tram and 15 minutes on the train. The additional time comes from the transfers.

The trams and the buses are the real pain because they can get delayed a lot depending on traffic. That doesn't mean trains are always on time, but they are at least on time more than the other two.

There isn't anything I can do about the buses but today I found out that I can do something about the trams. At South Yarra station, which is where I transfer from the train to the tram to go to work, there is a digital display which shows when the next three trams are going to arrive. But there is no such display at the tram stop where I get aboard the tram to return home.

  • On a good day, I will arrive there just time to catch the tram.
  • On a normal day, I will only have to wait for a couple of minutes before the tram arrives.
  • On a bad day, I will see the tram leaving, while I wait on the other side of the road not being able to cross to catch the tram. I have to wait about 10 minutes to catch the next tram.
  • On a very bad day, I will see two trams pass me while I wait on the other side of the road!
  • On a terrible day... I don't want to talk about it because cannot do anything about it.

If I knew when the tram actually arrives, I would know when to leave work, effectively scraping away the unwanted wait times. And guess what? There is an app for that!! That digital display at the South Yarra stop, right in my hand. So I know exactly when the trams arrive at my stop and I can plan my return a little bit better. Plus, it will also show my service disruptions as well, so that I can take another route.

This app is called tramTracker from PTV.

There are of course negative reviews about it on the Play Store, but that is to be expected. I thought 3.7 rating was pretty high for an app released by a government office. And I will also praise it until it drives me insane on of these days. But I feel that having the information handy is better than having a static timetable which is wrong more often than not when there is traffic involved.

Thursday, October 19, 2017

Why I like credit cards

There are three reasons why I like credit cards. First, I don't have to pay multiple bills (at least, ideally). Seconds, I get to keep money in the bank account for longer thus earning interest. Third, I get rewards points.

When I was in Japan, I had two credit cards - EPOS and Rakuten; both VISA. The Rakuten card was the best because you could pay with Rakuten cards when shopping on Rakuten website and there were deals like 10% points on products sold there. But I had to use my brain a lot because it wasn't always beneficial to buy from Rakuten because Amazon was cheaper even after considering the points. Plus, I was anyway getting 1% points on every purchase I made using the card. I had earned over JPY15,000 in a couple of years I had it. It's a shame that I didn't get it sooner.

I earned some points from the EPOS card too, but the benefits were limited. The only useful thing we used them on was gift vouchers which we gave our friends when visiting them or use them for ourselves.

Now in Australia, I use an Amex Essentials Card. I get 1 point for every $1 I spend (normally), but the actual conversion is like $7.41 for every $1000 spent. And you can use these points to pay for the credit card bill itself, which is great. There are other offers like $xx off if you spend $xxx or more at a certain store. The most recent such spending was at a BP fuel station where they offered $10 back when spent over $40. They also credited me $50 when I spent more than $750 in the first 3 months of getting the card. I use the card as much as possible, but Amex is not widely accepted as VISA or MasterCard, which is a shame. But I have added it to PayPal and sometimes some shops allow PayPal but not Amex directly. Also, there are benefits for people who fly a lot, but that's not for me.

Today I was wondering if I could pay the bills using the card, but it doesn't look economical as they all charge a credit card processing fee. Optus charges 0.385% and ClickEnergy charges 0.6%. Technically they are both less than the points I earn ($7.41 per 1000 points or at 0.741%), but I found out that Amex awards only half the points when used on utility payments. So I would be only earning money at 0.37% which is less than what both Optus and ClickEnergy charges as fees.

Yarra Valley Water, which is the water company, does not even support Amex, but they don't seem to charge a processing fee. I could be wrong though.

The other thing I found weird is that Costco in Australia does not support Amex anymore. When we were in Japan, Costco accepted only Amex (or cash)! It's the other way round here. You can pay with VISA or MasterCard at Costco.

I guess I will just keep using it on grocery.

Oh btw, I forgot to tell that all these credit cards I mentioned in the post do not have an annual fee. And also I don't care what the interest rate is because I always pay the statement balance on the due date, and you should too.

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