My Thoughts and Insights on the Cost of Living Crisis

I feel like writing today on my thoughts and insights on the current cost of living crisis.

Blueberries. Still expensive. Blackberries. It used to be around 20-25/kg, now it’s about 45/kg. They’re saying it’s due to shortage of supply. Raspberries. It used to be around 17-20/kg, now it’s about 35/kg. They’re saying it’s due to shortage of supply as well. Could be possible, but could also be that the supermarket chain is price gouging. If they weren’t, then the price wouldn’t have nearly doubled since it’s within the spam of a month. Thanks Woolies. I sold and profited from your stock by the way.

Rent. Pre-Covid, I can remember that we used to pay about 525/week. The landlord was also nice enough not to increase our rent during Covid probably cause we were good solid tenants after living there 2 years prior to Covid. During Covid, we decided to purchase our home for 700K. Damn real estate agents then were saying that they the prices were still going up, so it was hard to negotiate the pricing. I knew we could’ve especially it was still during Covid, but we didn’t push as hard as it was the top floor and there weren’t much on sale then. We locked in a 2-year fixed loan term. Post Covid, mortgage interest rates went above 6%+. Mortgage Interest Rate is at 6.79% to-date. We were still within our 2-year grace period, so that’s when we decided to push hard on contributing more into our Offset Account once the variable interest rate kicked in, and my calculations were right. I calculated the amount we needed to contribute into our Offset Account that would be close to our fixed interest rate payments. It was a significant amount, but we utilized our investments, and now we have more control over our interest payables. Now the fun part. While many people are paying about 40K+ rent annually, our focus will be paying off the mortgage. We’ll be utilizing our annual net savings, investments, bonuses, tax and interest savings and focus on fully paying off the mortgage be become debt free within 3-5 years. We already have 250K+ in the offset account, and prepaid mortgage of 107.5K. Our next focus for the next 3 years is to accumulate another 175K in prepaid mortgage, while continue to build up our offset account.

Housing expenses makes up 40%-50% today in most households, so if we tackle and focus on paying off the mortgage to lower the interest payables, we’ll be able to free up a significant amount of cash.

The housing prices are still quite high in Sydney, so if I were to start our property investing research, I’ll most likely be focusing elsewhere. Now the main question becomes, what should I do? Brandon will be Year 7 3 years from now. He can go to/from school by himself by that age, so I would no longer need to stay at home for the school drop offs/pickups. Can I work in corporate? No, and it’s thanks to Australia for being biased. My US and international work experience doesn’t count, and since I didn’t attend school here even though I’ve graduated with US degrees, doesn’t count either. Obviously the Australian system is crap, but I don’t care either way since everything that we do now is outsmarting the Australian system anyway. Immigrants work hard and are smart you know. If the Australian system wants to break, let it break an we’ll just find a way to profit. Whether I decide to focus on property investing or not, I would like to focus on my skillsets. I’m still very savvy with Excel, so I’ve updated our main Dashboard, and other excel templates. I know ChatGPT is still relatively new, and AI is now trending, so I’m thinking of utilizing ChatGPT to enhance our investments and personal finances and see how that can be used to continue to focus on our goals. I’ll update and post on this site on our research and findings. Consulting is optional, but not too keen if it requires licensing and utilizing CB (Cognitive Behavior) is one of the main challenges as a Financial Planner as they would need to deal with their clients behavior when it comes to finances and investing.

Now back to the cost of living crisis. I don’t feel bad for Gen Z who feel like they can’t afford anything. I don’t feel bad for more homeless people in the streets. I don’t feel bad for people who have to find another place to rent cause their rent is increasing again. I don’t accept excuses. I take action. I completely revamped our personal finances and investments and adjusted with the current economic situation.

I’ll be finalizing our year end financials next week and we’ll have a better picture as to how we’ve progressed for the year. Based on my estimates, our NSR should still be within range of 65%+, even during the high cost of living crisis. We didn’t make many changes on our household expenses either. What’s even more interesting is that we’ll be leaving for our Japan trip next week, and we’re targeting to spend about 15K. 7.5K on airfare+hotel for 11 nights, 2.5K on food, transport and events, and 5K on our EKB personal spend. It’s my way of showing my family that having money gives us options as part of becoming FI. If we can save 50% of our net savings, then we should enjoy spending as well.

Of course. I would need to find a substitute for Blackberries though. Grapes is my staple. It’s strange that the boxed one costs 17/kg, and the open bag one costs 8/kg. I can tell that the quality is different, but it doesn’t taste 2x better since it’s 2x the price. Salmon fillet is my fish staple. Vegetarian from Gozleme is my staple. I didn’t see much fluctuation in prices there.

I may also consider shopping in different supermarkets after we return from our Japan trip. See what Aldi and the asian supermarkets are selling. I’ll only buy milk, cereal, and grapes from Woolies and coffee also since coffee sticks are still cheap.

I love you wifey and my buddy! EKB!