# Tips on saving money



## Tyler Durden (1 May 2012)

I thought it'd be a neat idea to create a thread where people post ways of saving money.

Call me frugal, but when I'm at the petrol station, I always try to get the amount to 1 or 2 cents so it rounds down. Also, if I'm at Coles or Woolies and the cost of what I'm purchasing ends in 1 or 2 cents, I'll use cash instead of eftpos to round down again.

When I buy computer related products, I always go to this shop I know which sells things at a discount to the prices you'd find at JB, Dick Smith etc (happy to name the shop, but not sure if I'm allowed).


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## So_Cynical (1 May 2012)

Tyler Durden said:


> When I buy computer related products, I always go to this shop I know which sells things at a discount to the prices you'd find at JB, Dick Smith etc (happy to name the shop, but not sure if I'm allowed).




If its not MSY then your kidding yourself.

------------

As for saving money...buy stuff cheap or don't buy it at all.


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## Tyler Durden (1 May 2012)

So_Cynical said:


> If its not MSY then your kidding yourself.
> 
> ------------
> 
> As for saving money...buy stuff cheap or don't buy it at all.




It _is_ MSY! Wow, didn't think anyone here would know it. I just bought a 2TB external HD for $133; at JB it was going for $159.


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## McLovin (1 May 2012)

Tyler Durden said:


> It _is_ MSY! Wow, didn't think anyone here would know it. I just bought a 2TB external HD for $133; at JB it was going for $159.




I was down there today buying a router.


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## Tyler Durden (1 May 2012)

Another tip I have is I actually keep all my coins. I don't tip when I buy takeaway, and I don't donate my coins to people on the street.

I put them in a piggy bank and when it gets full, I take it to the coin machine at the bank which counts them and then I deposit it. It normally adds up to about $80-$100.


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## Eager (1 May 2012)

Tyler Durden said:


> Call me frugal, but when I'm at the petrol station, I always try to get the amount to 1 or 2 cents so it rounds down.



The other thing you can do is if you put in a set amount e.g. $20, once the pump stops, keep squeezing the trigger and lift the loop in the hose up to drain the petrol from it. 

Tried and tested money saving methods such as bringing your lunch from home really do work. If you don't want a cut lunch, have a cook-up on the weekend to put ready-made lunch meals in the freezer for the week.


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## skc (1 May 2012)

The most important first step to saving money is to know where you are spending them. Do you know what is the top 10 items / expenses for you last year off the top of your head?

Know the data first, then look for saving there. Follow the the 80/20 pareto principle.

Getting 2c at the supermarket per week is worth $1 each year. Shaving 10bps off your home loan is probably worth a bit more. Know what the big buckets are and start from there. 

As to my penny saving tip - drive with accelerator control and minimise braking. Keep an eye on the fuel consumption gauge, and try to beat the rated figure. I managed to achieve 7.1L/100km over the weekend (my car that is rated 8.6L/100km)


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## CanOz (1 May 2012)

Define a 'need', what you need to live. The rest is what you want.

Buy what you *need* to live, save for what you *want*.

You'll find once you get savings built up you'll want to keep contributing.

CanOz


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## StumpyPhantom (2 May 2012)

skc said:


> The most important first step to saving money is to know where you are spending them. Do you know what is the top 10 items / expenses for you last year off the top of your head?
> 
> Know the data first, then look for saving there. Follow the the 80/20 pareto principle.
> 
> ...




I agree it's the big ticket items that is the place to start.  We've all grown up with the expectation that we would own our own set of wheels, but what a money-sink.  There's plenty of car share schemes now for the occasional driver.

It's unavoidable if you're using the car for work, which brings me to my next tip.  Understand your tax return to the nth degree, especially what deductions you can legitimately claim.  When you get that bigger lump sum, save it (goes without saying)

Also hate to make this tax-related point, but the 'black economy' is thriving, so plenty of cash jobs out there if you're a tradie (I'm not).


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## skc (2 May 2012)

StumpyPhantom said:


> I agree it's the big ticket items that is the place to start.  We've all grown up with the expectation that we would own our own set of wheels, but what a money-sink.  There's plenty of car share schemes now for the occasional driver.
> 
> It's unavoidable if you're using the car for work, which brings me to my next tip.  Understand your tax return to the nth degree, especially what deductions you can legitimately claim.  When you get that bigger lump sum, save it (goes without saying)
> 
> Also hate to make this tax-related point, but the 'black economy' is thriving, so plenty of cash jobs out there if you're a tradie (I'm not).




So true. Tax and interest are by far the 2 biggests household expenses for most.


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## Bill M (2 May 2012)

Tyler Durden said:


> I thought it'd be a neat idea to create a thread where people post ways of saving money.
> 
> Call me frugal,




My wife and I are both frugal but we do not go without.

We always use fuel vouchers and always go on the cheapest day and that can us $5 to $10 a tank.

I buy my beer on special only. I just wait and then I will buy 2 or 3 cases at prices up to 20% off sometimes. I also buy all my wine online, spending about $3 to $4 a bottle delivered.

I wait for internet offers for Dominos pizzas, can buy for 50% off.

Get rid of your home phone fixed line if you don't need it, saves $30 a Month. Now my wife and I have a mobile each and it costs about $5 a Month with Amaysim.

Shopping, my wife waits until something is half price then buys 3 or 4 boxes of the item.

I go to Pauls Warehouse and buy top brand joggers when they have a 2 for 1 special.

I never pay for haircuts, bought Wahl clippers from the USA and my wife cuts my hair, saves $21 each 4 weeks. She does a better job too.

I buy all my clothes overseas, I mean everything except undies and socks, Far far cheaper than OZ.

I buy all my cruises and overseas holidays at huge discounts, sometimes at 50% off because we can go whenever we like and never go during peak times. (This is where we do a lot of our spending.)

Get a good credit card. Mine earns unlimited frequent flyer points, costs me zero per year as I am a NAB shareholder. I have had 2 free overseas flights so far and a third is coming up.

When I worked, I always took my lunch and own coffee to work. I drank the free purified water from the water cooler as well. Why spend so much money on expensive junk food and sodas?

Tyres for the car, know what you want then ring all the suppliers in the area and get the cheapest quote for the same item.

I have been known to find a high ticket item advertised in a local rag for a very low price, I cut it out and take it to DJ's or MYERS and they will match it. Saves me going to the other side of Sydney.

We collect free rain water from the roof of our house and water the garden with it.

Insulate your house, rarely need to use heater or air con these days.

Never buy a brand new car, you lose thousands of $$$$$ the moment you take possession of it. A week or 2 later you are back there with these new car faults and they don't really want to know you, join the queue, book it in Danno.

There are so many ways to save a buck, these are just some of mine. As I said, my wife and I do not go without, whatever we want we get but we won't pay full retail for it ever.


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## Bill M (2 May 2012)

skc said:


> So true. Tax and interest are by far the 2 biggests household expenses for most.




For all them retirees out there that aren't doing it, look into income splitting with your spouse. With the low income tax offset you and your spouse can earn about 17k per annum, each and tax free. Together that's about 34k. I don't mind picking up nearly $700 p/w tax free, something to think about.


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## sinner (2 May 2012)

I am with skc, it's all about cashflow.  Assuming you are cashflow positive, the number one tip for saving money is to increase your cashflow efficiency around the big numbers.

Shelter, Food, Clothing, Medicine, Transport.

Almost everything I have learned about this topic has been seemingly obvious in hindsight. It's all about time. You can invest time instead of money in a lot of cases, lots of people don't so they have to pay.

* Don't live in an expensive area for no reason. Pay your rent/mortgage in an area that is commensurate with what you can afford. I see so many uni students for example, who live in the inner city when they could live 20 mins out of the city with all the same amenities for 10-20% less rent...probably equivalent to their whole food budget.
* Bringing food from home for lunch: 30-60 mins cook time of $3 worth food prior day or $7-10 to buy lunch.
* Grow your own food wherever possible: 10h/week vs however much you spend on produce.
* Buy your food from the markets and cook it instead of going to Woolworths/Coles: 1-2h/week vs an approximate double of food costs (my own numbers).
* Keep a healthy natural sleep cycle (11pm-7am) and turn off all possible appliances at night: 5 mins/day of turning stuff off/on in return for large energy savings to avoid the darkest and coldest parts of a 24h period.
* Public transport: increases travel time by 50% in return for massive savings vs using a car.

You get the idea.

My best tip on saving money is to manage your time well. If you have no time to cook dinner, dry your clothes in the sun, or get to work via public transport, then you *will pay* for it.

Lastly, on intoxicants. Whatever your poison, invest the time to learn how to do it yourself. Drink grog? Brew/distill yourself. Unless it's a special occasion, don't pay $15 for a crap beer at a fancy nightclub. If you are a smoker, let nature cover the costs instead of the all night convenience store. Coffee drinkers should invest time in learning to use and then using good beans, a grinder and a good espresso machine. At the minimum when it comes to intoxicants, buy quality at wholesale. Never buy single units at retail, the only exception is special occasions.


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## CanOz (2 May 2012)

Well done Bill, my wife is Chinese(thrifty)-Australian and she'd be impressed with your money minding!

CanOz


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## Judd (2 May 2012)

Where possible replace halogen downlight globes with LEDs.  Saves energy and you won't have to change a globe for many a year.

Goes without saying but I'll still say it: make sure the unit is suitable and use an electrician if necessary.  Ain't worth getting yourself fried or turning the house into a bonfire just to save a few bucks.


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## bellenuit (2 May 2012)

If you are using Wollies fuel vouchers, and it probably applies to Coles too, always round your purchase to an even litre. I usually find that if it auto stops anywhere above a fraction of 4/10ths of a litre, you can usually get it up to the next even litre without overflowing by just gently squeezing the handle.

Wollies does not proportion the discount to the fractional amount of litres bought. So if you have a 10 cents voucher and buy 50.9 liters, you only get the 10 cents off on the 50 liters and nothing on the 0.9 liters. Bring it up to 51 liters and your saving will be $5.10 instead of just $5.00

Also, enrol in Wollies Everyday Rewards and use the card. Instead of the standard 4 cents, they often offer petrol discounts of up to 12 cents if you purchase above a certain amount of groceries or liquor in a week (usually $70 or $90). Easy to do if you purchase a carton of beer and some wine in the same week.


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## sammy84 (2 May 2012)

Learn how to make more money. Worrying about the small stuff will stop you from looking at the bigger picture.

You should always value your time. When I was living in Melbourne I spent more on my mortgage to live next to work. That got me home earlier and enabled me to spend more time on trading. Spending extra can also earn extra.

I wouldn't bother driving further to save a few dollars on petrol, prefer to be home sooner and using my time more effectively.


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## Smurf1976 (2 May 2012)

Judd said:


> Where possible replace halogen downlight globes with LEDs.  Saves energy and you won't have to change a globe for many a year.



Halogen downlights. One of the most unnecessary energy uses around, and damn inconvenient to be forever changing globes.

50 watts per globe, plus transformer losses so make that 60 W, and nobody has just one or two in a room. It's much more efficient, and less maintenance, to use literally any other type of electric lighting.

And believe it or not, there's something known as the "sun". Just let it shine in during the day, especially during winter, thus heating and lighting the house completely free of charge.

The other big, obvious energy waste is windows. There's a lot of effort put into limiting the amount of air movement in modern buildings although most are still excessive. Then someone comes along and opens the windows during the afternoon, necessitating use of heating in the evening. That's just silly but it's not uncommon.


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## awg (3 May 2012)

special for families, especially with small kids. Rechargeable Batteries

You would be surprised how much the savings add up over the years.

When kids are small, it is quite common for them to leave appliances, toys etc switched on, (even adults do this)...so new batteries dead

Unbelievably, I still have some of the original old purple ones that last incredibly well (over 20 years)

The newer NiCads etc, dont take as many charges.

I encourage my Uni going son to be an urban scrounger, but he turned his nose up at the idea, until they found out the local Dan Murphys sometimes throw cartons of beer into the skip


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## demiser (3 May 2012)

Smurf1976 said:


> And believe it or not, there's something known as the "sun". Just let it shine in during the day, especially during winter, thus heating and lighting the house completely free of charge.




We've done all the right things, and use either CFL's or LED's, however we've also just put 5 skylights in.  Even in the long run, it would probably have been cheaper to just turn lights on during the day, however the 'natural' light really does make a difference.

We also have a lot of fruit trees and all that jazz, but we're fortunate enough to have the land to do it.

At the end of the day, it's the wife who keep's our savings in check, because if it's not a monthly payment, i'm more than likely to spend it elsewhere


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## demiser (3 May 2012)

One of the major savings for us was energy use, and what we use when.

We had solar installed, already had a gas kitchen, and use separate solar for garden / driveway lights etc.  We also had a micro hydro system for a while, at least until DERM informed us that it wasn't quite legal . . .

Unfortunately as others have said previously, you need to spend money to make money, especially due to the long payback period for these sorts of projects.


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## VSntchr (3 May 2012)

skc said:


> As to my penny saving tip - drive with accelerator control and minimise braking. Keep an eye on the fuel consumption gauge, and try to beat the rated figure. I managed to achieve 7.1L/100km over the weekend (my car that is rated 8.6L/100km)




Agree here! My favourite gear is neutral!!!


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## McLovin (3 May 2012)

skc said:


> As to my penny saving tip - drive with accelerator control and minimise braking. Keep an eye on the fuel consumption gauge, and try to beat the rated figure. I managed to achieve 7.1L/100km over the weekend (my car that is rated 8.6L/100km)




Maybe I'm a leadfoot but I never get under what my car is rated at. I average about 12-13L/100km when I should be doing it in about 9.

I ride my bike most of the time, saves time and keeps me fit!


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## VSntchr (3 May 2012)

Smurf1976 said:


> The other big, obvious energy waste is windows. There's a lot of effort put into limiting the amount of air movement in modern buildings although most are still excessive. Then someone comes along and opens the windows during the afternoon, necessitating use of heating in the evening. That's just silly but it's not uncommon.




Stale air is very unhealthy....


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## skc (3 May 2012)

VSntchr said:


> Agree here! My favourite gear is neutral!!!




Here's another tip... don't tell your wife how to drive. She will get annoyed and go shopping 



McLovin said:


> Maybe I'm a leadfoot but I never get under what my car is rated at. I average about 12-13L/100km when I should be doing it in about 9.
> 
> I ride my bike most of the time, saves time and keeps me fit!




The key to me is look further ahead. So often I see people braking at the bottom of the valley instead of building up speed to roll up the hill because they simply didn't look/plan ahead. Or that they accelerate right up to the red light than hit the brakes upon realising the car in front is braking.


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## awg (3 May 2012)

skc said:


> Here's another tip... don't tell your wife how to drive. She will get annoyed and go shopping
> 
> 
> 
> The key to me is look further ahead. So often I see people braking at the bottom of the valley instead of building up speed to roll up the hill because they simply didn't look/plan ahead. Or that they accelerate right up to the red light than hit the brakes upon realising the car in front is braking.




Brake riders will pay!...just spent $450 get my wifes front brakes new pads, discs machined...never have i had to have this done on any car I drive...I use the gearbox to slow my car on downhill...my brake pads last insane times.

Drafting a semi-trailer (or other vehicle) on long trips at highway speed will save you a lot of fuel, + you wont be smashed by an oncoming driver, or booked for speeding


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## McLovin (3 May 2012)

skc said:
			
		

> The key to me is look further ahead. So often I see people braking at the bottom of the valley instead of building up speed to roll up the hill because they simply didn't look/plan ahead. Or that they accelerate right up to the red light than hit the brakes upon realising the car in front is braking.




I do look ahead (cycling with your feet clipped to the pedals tends to make you try and anticipate what's coming up ), and I use 98 RON. I guess it just must be inner-city driving. There's so many idiots on the roads, I'd love just one day at the RTA to conduct the license tests.  



awg said:


> Brake riders will pay!...just spent $450 get my wifes front brakes new pads, discs machined...never have i had to have this done on any car I drive...I use the gearbox to slow my car on downhill...my brake pads last insane times.




Last time I checked, a gearbox cost a lot more to replace than brake pads or discs.  It's also illegal to use your gearbox without brakes these days. I still do it on certain roads.


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## awg (3 May 2012)

McLovin said:


> Last time I checked, a gearbox cost a lot more to replace than brake pads or discs.  It's also illegal to use your gearbox without brakes these days. I still do it on certain roads.




Dude, I never said I didnt USE brakes

I merely retard the speed of the vehicle by matching the RPM to safe speed.
(like a truck driver MUST)

Been thru this before, you will NOT wear out your gearbox doing this properly, as most natural wear occurs in high or low gear, not intermediates, and the stress on bearings and thrust washers is the opposite of usual.

Admitedly there is some additional clutch wear, either manual or auto


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## Eager (3 May 2012)

demiser said:


> One of the major savings for us was energy use, and what we use when.
> 
> We had solar installed, already had a gas kitchen, and use separate solar for garden / driveway lights etc.  We also had a micro hydro system for a while, at least until DERM informed us that it wasn't quite legal . . .
> 
> Unfortunately as others have said previously, you need to spend money to make money, especially due to the long payback period for these sorts of projects.



Once the money is spent, everything that a passive energy generating system, errrr, generates, is FREE! It make sense to look at ROI, but to me, installing a solar PV system in conjunction with the solar hot water system that was built with the house, is a no-brainer.

Even putting a spare sum of money in Ubank at 6.01% will not come anywhere near the return gained from spending (investing) money in a solar PV system.

To think that there are some people around that still don't have insulation in their ceilings!!!


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## Smurf1976 (3 May 2012)

VSntchr said:


> Stale air is very unhealthy....



Indeed it is and you need to avoid that.

But the vast majority of Australian residential buildings have excessive ventilation (ie heat loss) rates even with all the doors and windows shut. All the small gaps, cracks etc are sufficient that, in total, a huge volume of air moves through them.

In a typical house, the total size of all these gaps is literally big enough for an average person to climb through. So you don't need the windows open and the heater running.


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## Smurf1976 (3 May 2012)

demiser said:


> We also had a micro hydro system for a while



Now THAT is my kind of way to save (or make) money...  

The control panel in my avatar is for a somewhat larger system however...


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## Eager (5 May 2012)

Smurf1976 said:


> The control panel in my avatar is for a somewhat larger system however...



No DCS?


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## Tyler Durden (3 June 2012)

For those in Sydney:

Avocados today
Woolies - 2 for $3.50
Coles - 2 for $2.50
Paddy's market - 4 for $1


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## McLovin (3 June 2012)

awg said:


> Dude, I never said I didnt USE brakes
> 
> I merely retard the speed of the vehicle by matching the RPM to safe speed.
> (like a truck driver MUST)




Oh, I getcha. I thought you were meaning you use the gearbox solely to hold a speed on descents. I also use that somewhat lost art (outside of racing) of heel and toeing. Nothing nicer than perfectly matching your downchange to the engine speed.


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## ROE (3 June 2012)

Most people I meet pay their bill at the last minutes this is a counter saving measure.

what you should do is as soon as you get your bill pay it even it's 2-3 weeks away, that way you have less money to spend and so you don't spend and your bill is paid...

leaving to the last minute, you spend all your money then still have the bill to pay at the last minute
My water and electric city came Friday $900 all up got till 19 June to pay ..paid ..have $900 less to spend so dont spend much this month


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## VeryGreen (3 June 2012)

My girlfriend and I have put on a bit of weight over the last few years (living the good life).

We decided to try that company that makes 'light' meals which are 'easy' to prepare... I am sure you know the one. You place your order online and they deliver your food for you. It was not done as a money saver but you know, Its saving me a bit of money and more importantly time... which equals money anyway.

I didn't realize how much food I was WASTING!

I use to freeze meals. Any left overs would go into containers and into the fridge or the freezer. I've realized now that I was only fooling myself. All you're doing is prolonging the inevitable. Throw it out now, or freeze it and throw it out in 6 months.

Being a week on/ week off worker, in my week off I would spend my days thinking about what to prep for dinner.. Quite often I would watch master chef or surf the net finding recipie ideas. I would then make a trip to the local shops and spend about $50 on ingredients and incidentals before using my electricity and half of my day preparing something to eat.

So how much does it cost me to have a balanced 1800Cal diet? $23.58 a day Breakfast/Lunch/Dinner.

And omg I have so much more time to myself now!


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## bellenuit (3 June 2012)

ROE said:


> Most people I meet pay their bill at the last minutes this is a counter saving measure.
> 
> what you should do is as soon as you get your bill pay it even it's 2-3 weeks away, that way you have less money to spend and so you don't spend and your bill is paid...
> 
> ...




A better thing to do would be to have a high interest account from which you can pay bills using BPAY.  Then when you get a bill, deposit the amount in this account and create a BPAY transaction to pay the bill from that account on the due date.  That way you have the money set aside so you don't spend it on other things, but are earning interest up until the bill is due and the payment made.


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## Judd (3 June 2012)

Tips on saving money.  Simple.  Just don't spend it - unless you have to.  Or want to.  Or you just bloody well feel like it.


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## sptrawler (3 June 2012)

Write two lists,
Must have: essential 
Would like to have:If I had money to waste


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## The Barbarian Investor (23 September 2012)

Where do you purchase your clothes from Bill?


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## burglar (23 September 2012)

If I don't need it I don't buy it ... until recently!!

I went on a spree of window shopping with a friend!
To my own amazement I enjoy retail therapy 
and bought some stuff I really don't need.

Am I trying to justify it?

:


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## Mr Wilson (23 September 2012)

I'll keep my opinion fairly simple,

Create a expenses chart to find out what you are spending your money on,
Review your expenses and ask your self " Am I happy with my spending habits?" 

Create a budget with this new information and stick to it !

Always pay your self first- (anything that contributes to you'r asset column) 

-Pressure to pay outstanding bills and to keep people off your back will give you the drive to find new ways to make more money-

Save regularly- Work on putting away a percentage of your pay every week, Increase this percentage over time,

(Money likes to be were it's loved most, and can be used most effectively) 


I think that might relate more to making money then saving money
but they both build from the same principles and foundation.

Hope this helps


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## young-gun (23 September 2012)

> Mr Wilson
> Re: Tips on saving money
> 
> I'll keep my opinion fairly simple,
> ...




Did you put down rich dad poor dad to write this post??

regardless of whether you did or not you're absolutely right. Saving money to let it sit there and accumulate is for suckers. Money should be put to work asap. I'm not referring to someone who has 6 mill in the bank and lives off the interest.(although there is a hell of alot more money to be made off 6 mill than a term deposit, but some people prefer the safety).

I save money for only a few reasons.
- a holiday
-to accumulate enough to invest a sizeable amount into something rather than putting a few hundred dollars in drips and drabs into something. eg a deposit for an investment property(simply an example, not saying I would atm).
another example is you need to buy a minimum of $500 worth of shares through comsec.
-as a SMALL buffer for thigns like car troubles services maintenance and rainy days.

anything else should be put to work imo.


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## Julia (23 September 2012)

young-gun said:


> Did you put down rich dad poor dad to write this post??
> 
> regardless of whether you did or not you're absolutely right. Saving money to let it sit there and accumulate is for suckers. Money should be put to work asap. I'm not referring to someone who has 6 mill in the bank and lives off the interest.(although there is a hell of alot more money to be made off 6 mill than a term deposit, but some people prefer the safety).
> 
> ...



Could you share with us all those ways you consider money is "being put to work".
eg if I have $100,000 sitting in the bank, what should I do with it and why?


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## MrBurns (23 September 2012)

Julia said:


> Could you share with us all those ways you consider money is "being put to work".
> eg if I have $100,000 sitting in the bank, what should I do with it and why?




Anything other than in the bank is a gamble, especially in these times.

Telstra shares perhaps but even then, a gamble.


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## Mr Wilson (23 September 2012)

Julia said:


> Could you share with us all those ways you consider money is "being put to work".
> eg if I have $100,000 sitting in the bank, what should I do with it and why?




I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you, 

From online selling of domain names ,advertising, direct shipping, Ect. 
Or could purchase Items then rent them out, Buy antique's Ect.

The best thing to do is find the thing you love and invest in that, 
That way you will never work another day in your life,


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## MrBurns (23 September 2012)

Mr Wilson said:


> I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you,
> 
> From online selling of domain names ,advertising, direct shipping, Ect.
> Or could purchase Items then rent them out, Buy antique's Ect.
> ...




If you sell domain names I have 40 I'll be selling soon.


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## gav (23 September 2012)

I recently read "Millionaire Next Door" and discovered that for many households, the number one expense is tax.  I thought to myself "yeah, maybe for upper-middle class income earners and above. Out of curiosity, I did the math and discovered that my partner and I pay more in tax than on our mortgage!  I couldn't believe I hadn't disovered this earlier.  

If you haven't read "Millionaire Next Door", then I suggest you do.  My partner and I are quite frugal, but seeing the stats on the spending habits of those studied in the book was quite fascinating.


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## Mr Wilson (23 September 2012)

gav said:


> If you haven't read "Millionaire Next Door", then I suggest you do.




Thank's Gav I'll give it a read,


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## Ageo (24 September 2012)

Problem I have with the saving concept is that it's capped, no matter how hard you try there's always a limit unlike earning which is unlimited.... I tend to focus on the making more than I do on saving


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## Julia (24 September 2012)

Mr Wilson said:


> I'm sure if you look hard enough you could find 1million and 1 ways to make it work harder for you,
> 
> From online selling of domain names ,advertising, direct shipping, Ect.
> Or could purchase Items then rent them out, Buy antique's Ect.



What I was looking for is some proof that such activities are actually going to make money.
Perhaps you could give some examples of exactly how $100K can make X% over X years by which method.



> The best thing to do is find the thing you love and invest in that,
> That way you will never work another day in your life,



OK, right.  So you're saying it's axiomatic that as long as we are loving what we're doing it's going to make us rich.  Tell that to all the struggling writers, composers, wannabe anythings!
It's a lovely, romantic thought but less than correct in most cases.  The sort of cliche which sounds wonderful but has little practical basis.


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## Mr Wilson (24 September 2012)

Julia said:


> What I was looking for is some proof that such activities are actually going to make money.
> Perhaps you could give some examples of exactly how $100K can make X% over X years by which method.




Correct me if I'm wrong because I some times am, but It sound's to me like you are asking for a Strategy to invest your $100k?



> OK, right. So you're saying it's axiomatic that as long as we are loving what we're doing it's going to make us rich.



No but when you are doing what you love wont mind working 60-80 Hrs a week perfecting it and making it work so it will become profitable,  *Dreams Don't Work Unless You Do* 


"The biggest reason for failure is because people give up to early and have not yet decided to become successful" 

I hope this helps you see things from my view point,


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## Julia (24 September 2012)

Mr Wilson said:


> Correct me if I'm wrong because I some times am, but It sound's to me like you are asking for a Strategy to invest your $100k?



No, I'm not personally looking for any financial strategies.  I have enough.
I would just like it if people - instead  of putting up vague motherhood statements about how to make money work - would give some actual practical examples of what is achievable.
I don't mean to be singling you out here, especially as you're so polite, but in today's world airy fairy stuff just doesn't cut it imo.



> I hope this helps you see things from my view point,



I understand your viewpoint.  I simply question its practicality.
Thank you for responding to my post.


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## Mr Wilson (24 September 2012)

Julia said:


> No, I'm not personally looking for any financial strategies.  I have enough.
> I would just like it if people - instead  of putting up vague motherhood statements about how to make money work - would give some actual practical examples of what is achievable.
> I don't mean to be singling you out here, especially as you're so polite, but in today's world airy fairy stuff just doesn't cut it imo.




*I think the problem might lie in the complexity of the question,* 

You could by 4 cars at 25K each, Hire them out at $35 a day, It would take Just under Two years if you were booked out every day to make your money back.

You would have to factor in running cost's wages insurance, ECT
Lets add another year for good measure to cover all other costs.

After the first initial 3 years you would be creating  $51100 a year profit plus the assets.
I'm not sure what the ratio would be, But does this cover for an example? 

More to the point am I off the Hook?


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## sptrawler (24 September 2012)

Investment returns are usually proportional to risk.
Risk is usually proportional to the ability to replace lost capital.
Therefore rational investment return, is a function of the investors ability to replace lost capital and their risk averseness.
For example many will put their money in the bank for a return of 6%, yet won't buy shares in the bank for a return of 6% with an added franking credit.
This is magnified in a super fund paying a pension, $100,000 gives $6000 on the example term deposit. Yet gives $10000 in dividends, however the share price could drop and would no doubt result in lower dividends.
However the franking credit means the dividend has to drop 30% to equal the term deposit. 
On the other hand the $100,000 on deposit has little chance of capital gain, but will depreciate by inflation.
This is just general chat and not meant to be any sort of guide etc.


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## Julia (24 September 2012)

Mr Wilson said:


> *I think the problem might lie in the complexity of the question,*
> 
> You could by 4 cars at 25K each, Hire them out at $35 a day, It would take Just under Two years if you were booked out every day to make your money back.
> 
> ...



  Yep.  I have no idea whether - when you offset depreciation, rego, etc - it would be profitable, and you're assuming having the cars rented out all the time, but you've come up with a real example and made me laugh so good on you.


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## young-gun (26 September 2012)

Julia said:


> Could you share with us all those ways you consider money is "being put to work".
> eg if I have $100,000 sitting in the bank, what should I do with it and why?




I jumped the gun a bit there. It obviously comes back to everyones personal goals and aims. Personally I think every cent you have in the bank as a form of 'investment' then it is a complete waste of time. With inflation well above the quoted 2-3% you would barely be staying ahead of the game.

I personally am very aggressive and enjoy risk taking(while remaining as educated and informed as possible about my decisions), and currently invest in gold and silver and highly speculative stocks, with little money in the bank. Yeah ok you can argue that money in the bank is far safer and a guaranteed return, but that sort of thinking isn't going to make you wealthy. Unless you have 5 mill + sitting in the bank, in which case it still wouldn't lead to HUGE amounts of money coming your way. Ultimately building a business and owning property(buying at the right time**) are my personal goals.

To answer your question if I had 100k spare I would look for business investment opportunities(and buy silver). I can't tell you exactly what as I don't know just yet. Gotta be fairly careful at times like this as to what business you enter into etc. We've already started a small(hopefully going to be big) business that required relatively small capital outlay, and requires little work now that its running. This is simply my opinion and what I would do.

Alot of people are cautious and don't feel safe with their money anywhere other than the bank and the measly returns which is fine. However if people are complaining they want/need more money and still leave their money in the bank, then I believe that puts them into the same category of people who don't take notice of their super nor spend the time researching and reading to gain the confidence required to DO SOMETHING, and make money or prepare for retirement, as we have previously discussed.

Main point - interest from a bank account is never going to make anyone rich or wealthy, and tbh it bores me.


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## sptrawler (26 September 2012)

O.K young gun, how about if you were 67 years old and had $1m, put it in the bank at 5.7% or buy silver? 
$57,000 to live on or 1000kg of silver that you can't eat, can't take to the shop to buy food and hope it doesn't tank.

Would you be as cavalier, even if you were 35 years old and had $1m but had just been made redundant.
Would you jump in and buy silver or would you put the $1m in the bank at 5.7% and look for another job.

Life's great when you don't have to rely on your decissions to live on.


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## Julia (26 September 2012)

sptrawler said:


> O.K young gun, how about if you were 67 years old and had $1m, put it in the bank at 5.7% or buy silver?
> $57,000 to live on or 1000kg of silver that you can't eat, can't take to the shop to buy food and hope it doesn't tank.
> 
> Would you be as cavalier, even if you were 35 years old and had $1m but had just been made redundant.
> ...



Exactly.  And when you don't need to rely on your capital to generate a living.


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## sptrawler (26 September 2012)

sptrawler said:


> Investment returns are usually proportional to risk.
> Risk is usually proportional to the ability to replace lost capital.
> Therefore rational investment return, is a function of the investors ability to replace lost capital and their risk averseness.
> For example many will put their money in the bank for a return of 6%, yet won't buy shares in the bank for a return of 6% with an added franking credit.
> ...




Exactly Julia, people who have limited ability to replace capital are risk averse.
Re reading the post, it wasn't very clear.
Buying shares in the bank for dividend, tends to give a better outcome than a term deposit, in the same bank.  sorry


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## McLovin (26 September 2012)

young-gun said:


> I jumped the gun a bit there. It obviously comes back to everyones personal goals and aims. Personally I think every cent you have in the bank as a form of 'investment' then it is a complete waste of time. With inflation well above the quoted 2-3% you would barely be staying ahead of the game.




One of the best investments I ever made was going almost all to cash in late 2006 (I held onto some CSL that I'd had since about 1996). I had plenty of people telling me I was an idiot for getting out. I was working in finance at the time too and much smarter heads were telling me this. Didn't lose a cent through the GFC. And then in early 2009 I was cashed up and made a killing, enough that I can now concentrate on my investments full time. Doing it full time, I have found that my knowledge and understanding has expanded exponentially.

Sometimes cash is the best investment.


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## young-gun (27 September 2012)

sptrawler said:


> O.K young gun, how about if you were 67 years old and had $1m, put it in the bank at 5.7% or buy silver?
> $57,000 to live on or 1000kg of silver that you can't eat, can't take to the shop to buy food and hope it doesn't tank.
> 
> Would you be as cavalier, even if you were 35 years old and had $1m but had just been made redundant.
> ...




I don't know why you even bothered posting this. Obviously everyone's opinion and approach is going to differ from person to person depending on situation. It goes without saying. My situation allows me to do whatever I want. If someone is  67 and happy living off 57k a year then great, but I don't plan on being in that situation. In that case it's not really an investment anyway, it's a necessity to put food on the table. Obviously taking a risk to the point where you can't put food on the table or petrol or a roof over your head is idiotic.


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## sptrawler (27 September 2012)

young-gun said:


> I don't know why you even bothered posting this. Obviously everyone's opinion and approach is going to differ from person to person depending on situation. It goes without saying. My situation allows me to do whatever I want. If someone is  67 and happy living off 57k a year then great, but I don't plan on being in that situation. In that case it's not really an investment anyway, it's a necessity to put food on the table. Obviously taking a risk to the point where you can't put food on the table or petrol or a roof over your head is idiotic.




I was just responding to your statement, the same as McLovin above. It apeared to infer, that to have cash in the bank was akin to having a screw lose in your head.
As an aside, if inflation rises, so does interest rates. There was a time in the not too distant past that you could get 21% interest. If that was the case now, would you have your $1m in the bank earning $210k p.a or in speclative shares, gold and silver? It would still be boring but you would double your money garuanteed in 3.5 years.
As McLovin points out it is easy to halve your money with another G.F.C and as far as gold goes' I have seen it at $1800oz and $245oz in the last 10 or so years.


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## young-gun (27 September 2012)

sptrawler said:


> I was just responding to your statement, the same as McLovin above. It apeared to infer, that to have cash in the bank was akin to having a screw lose in your head.
> As an aside, if inflation rises, so does interest rates. There was a time in the not too distant past that you could get 21% interest. If that was the case now, would you have your $1m in the bank earning $210k p.a or in speclative shares, gold and silver? It would still be boring but you would double your money garuanteed in 3.5 years.
> As McLovin points out it is easy to halve your money with another G.F.C and as far as gold goes' I have seen it at $1800oz and $245oz in the last 10 or so years.




Ok seems I am on a different page here. What I am trying to say is that in no way do I see putting 'small' amount of money into a term deposit as a form of 'investment'. If someone is putting money into the bank thinking it's a fantastic investment then I don't believe this to be the case. A bank account has its place for saving money, but once you have saved x amount if you want to make money then that money needs to be invested. The other time to use the bank is to protect yourself as you poitned out that Mclovin said. Mclovin I'm sure didn't invest in the bank thinking he was going to make huge returns, it was simply a safe haven until the storm blew over. My original post lacked clarity.

I'm not saying don't ever keep money in the bank, I am simply saying that if you are putting it there to make money (again unless you have millions of dollars of cash) then it isn't the smartest choice, and is quite lazy really. If you ahve no desire to turn a million dollars into 2 million or whatever your goal may be, then the bank is probably exactly what you need. They obviously have their place.

In relation to your example, if interest were at 21% then inflation must have been out of control, which would mean your purchasing power would be evaporating quickly, likely diminishing the majority of the 21% return. In your exampe I would take gold/silver any time, as its a great inflation hedge. Gold was at 240 at one point, and is now just under 1800. there is every chance they will crash absolutely, in fact I hope they do as it will present a great buying opportunity. However with central banks witht heir finger on the button, a major crash will be unlikely, or very short lived as they print their way to prosperity in the short term, sending gold and silver ever higher. JMO not advice


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## sptrawler (27 September 2012)

young-gun said:


> Ok seems I am on a different page here. What I am trying to say is that in no way do I see putting 'small' amount of money into a term deposit as a form of 'investment'. If someone is putting money into the bank thinking it's a fantastic investment then I don't believe this to be the case. A bank account has its place for saving money, but once you have saved x amount if you want to make money then that money needs to be invested. The other time to use the bank is to protect yourself as you poitned out that Mclovin said. Mclovin I'm sure didn't invest in the bank thinking he was going to make huge returns, it was simply a safe haven until the storm blew over. My original post lacked clarity.
> 
> I'm not saying don't ever keep money in the bank, I am simply saying that if you are putting it there to make money (again unless you have millions of dollars of cash) then it isn't the smartest choice, and is quite lazy really. If you ahve no desire to turn a million dollars into 2 million or whatever your goal may be, then the bank is probably exactly what you need. They obviously have their place.
> 
> In relation to your example, if interest were at 21% then inflation must have been out of control, which would mean your purchasing power would be evaporating quickly, likely diminishing the majority of the 21% return. In your exampe I would take gold/silver any time, as its a great inflation hedge. Gold was at 240 at one point, and is now just under 1800. there is every chance they will crash absolutely, in fact I hope they do as it will present a great buying opportunity. However with central banks witht heir finger on the button, a major crash will be unlikely, or very short lived as they print their way to prosperity in the short term, sending gold and silver ever higher. JMO not advice




Great post young gun, accurate to the point and good thoughts. 
I reckon you will do well.


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## Julia (27 September 2012)

young-gun said:


> Ok seems I am on a different page here. What I am trying to say is that in no way do I see putting 'small' amount of money into a term deposit as a form of 'investment'. If someone is putting money into the bank thinking it's a fantastic investment then I don't believe this to be the case. A bank account has its place for saving money, but once you have saved x amount if you want to make money then that money needs to be invested. The other time to use the bank is to protect yourself as you poitned out that Mclovin said. Mclovin I'm sure didn't invest in the bank thinking he was going to make huge returns, it was simply a safe haven until the storm blew over. My original post lacked clarity.



Good to have you clarify what you meant.
One important factor you seem to have overlooked is risk/reward.  Most investments with the potential for high reward also carry a similar risk for loss.
An example is the late Storm Financial where the double gearing was hugely risky but hugely profitable as long as the market trended upward.  But it left the participants with nothing or almost nothing when the market turned, essentially because there was no proper risk management.


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## sptrawler (27 September 2012)

Julia said:


> Good to have you clarify what you meant.
> One important factor you seem to have overlooked is risk/reward.  Most investments with the potential for high reward also carry a similar risk for loss.
> An example is the late Storm Financial where the double gearing was hugely risky but hugely profitable as long as the market trended upward.  But it left the participants with nothing or almost nothing when the market turned, essentially because there was no proper risk management.




Julia if someone said to you, "take a loan against the equity in your house to buy shares".
Then when that process is complete. Julia "Now use those shares to take a margin loan, to buy more shares"

At this point someone would have to be saying "look in my eyes, look in my eyes". 
One would have to think that if these people were prepared to take on that risk, it was only a matter of time before scammers caught up with them.


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## young-gun (28 September 2012)

Julia said:


> Good to have you clarify what you meant.
> One important factor you seem to have overlooked is risk/reward.  Most investments with the potential for high reward also carry a similar risk for loss.
> An example is the late Storm Financial where the double gearing was hugely risky but hugely profitable as long as the market trended upward.  But it left the participants with nothing or almost nothing when the market turned, essentially because there was no proper risk management.




Naturally risk is always the first thing to be thought of. for example I am well aware that my species could halve in a day, therefore I don't place 20k on a trade. As you say with great risk comes great reward. After researching certain companies and what they are doing and where thye are headed you can reduce the amount of risk exposure(although still high).

Although the stock market can generate huge fortunes for some, for me personally it is my least favourite form of investing(not that I am an accomplished investor in all fields, just an opinion.) It has far too many variables attached to it, and can vary from catastrophic to great. you don't have that sort of volatility in business and property. You have days to act in some instances in a stock market. you have weeks or months to adapt in business and property. the potentially extreme volatility just isn't there.

At the end of the day, no one gets rich off investing in term deposits.



sptrawler said:


> Julia if someone said to you, "take a loan against the equity in your house to buy shares".
> Then when that process is complete. Julia "Now use those shares to take a margin loan, to buy more shares"
> 
> At this point someone would have to be saying "look in my eyes, look in my eyes".
> One would have to think that if these people were prepared to take on that risk, it was only a matter of time before scammers caught up with them.




+1. I am not too familiar with the whole storm financial gig, but as far as I am aware everyone was double leveraged and maxed out. This si great when you get exposure to a huge bull market, but very risky, and in my opinion very stupid. Not to cast judgement on those involved, whether they were misled or tricked into doing something that didn't want to. however they are still largely at fault by not knowing exactly what they were getting into if this were the case.

Huge returns usually means huge risks, and if you aren't familiar with them then you're in trouble, and shouldn't be ivnesting in anything.


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## Happy (28 September 2012)

Prepare as much food and drinks as you can yourself.

Earn more than you spend, or spend less than you have and you'll be OK.

I know trivial comment but true.


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## sptrawler (28 September 2012)

Happy said:


> Prepare as much food and drinks as you can yourself.
> 
> Earn more than you spend, or spend less than you have and you'll be OK.
> 
> I know trivial comment but true.




It might be trivial, but as you say, very true.

How many times have you gone out to dinner, spent heaps and walked out thinking, that wasn't worth it?

I've done it twice in the last week and I'm over it.
$100 night out, that doesn't taste anywhere near as good as a home cooked meal. Maybe it is because I live in Perth? But I'm sure there is a lot of short order cooks passing themselves off as a chef. 
The other thing I would like to know is, what sort of apprenticeship does a Thai, Vietnamese or Chinnese cook undertake? There seems to be no consitency in the quality of the offerings.IMO


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## The Barbarian Investor (10 October 2012)

sptrawler said:


> Exactly Julia, people who have limited ability to replace capital are risk averse.
> Re reading the post, it wasn't very clear.
> Buying shares in the bank for dividend, tends to give a better outcome than a term deposit, in the same bank.  sorry




On a side-note, Is a certificate of deposit better than a term deposit for those people?


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## sptrawler (10 October 2012)

The Barbarian Investor said:


> On a side-note, Is a certificate of deposit better than a term deposit for those people?




Never heard of that, what is it?


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## TMC93 (12 October 2012)

sptrawler said:


> Never heard of that, what is it?




Sounds like the old IBD's the oldies used to go in and finger at the banks


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## johenmo (12 October 2012)

Learn to cook properly & do your own filet mignon - lots cheaper than out.
Expand that to dinner part with 3 groups - each prepare a course and eat at one house with BYO wine.  Dinner for 6 for a lot less.
Become a Freegan.
Wait at least 24 hours before buying (no impulse buying).
Get at least 3 prices before purchasing.
Have a one-car household.


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## awg (17 October 2012)

Urinate near your roses...you will save money on water, both in watering the plant, and the absence of flush.

Reduced fertiliser too, and they bloom great. You will also be able to observe bugs or other pestilence upon the plant

If you dont have any roses, then lawn, fruit trees, compost heap, most plants in fact benefit from urea.

I draw the line at leafy veg :


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## awg (21 October 2012)

Talking fertiliser, forgot to mention that I recently spread approx 600kg of horse manure on my garden.

There are stables that I drive right past, and it has free manure...in 50kg bags

not easy to lift them into the 4wd, and a bit stinky too

but still at the Nursery that would be hundreds of $

this will be great for the soil over time

its amazing how much you can add..I could easily add several tonnes per year...I try and prefer organic fertilisers, as inorganic chemicals can damage the soil biology

got to get your manure early in the week...that free **** goes quick :


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## prawn_86 (21 October 2012)

Like others i am a lot more focused on earning rather than saving, although obviously i stick to a budget. I know they probably all been mentioned before but my top 3 tips are:

1. Take lunches to work. Most peope in my office would easily spend $50 - $100 a week just on lunches. I bring mine from home saving both time and money
2. Use public transport. Admittedly owning a car has fairly high fixed costs, but by using public transport as much as possible you save $ on fuel and maintenance. We average maybe 100kms per week in our car and that includes weekends away/drives to the country once a month
3. Stop smoking and/or drink less or drink at home with friends. 

I think implementing the above (if it was possible to do all 3) the 'average' Aussie battler could save at least $100pw


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## Smurf1976 (21 October 2012)

Simply stop buying stuff you don't need. 

There are exceptions of course (installing solar panels or buying groceries in bulk are obvious examples), but in general terms spending money is not the way to save it. Sure, you got 2 for the price of 1 on whatever it was but that's still a waste if you didn't need either of them. It's amazing how many seem to not grasp this concept...


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## Miss Hale (21 October 2012)

Smurf1976 said:


> Simply stop buying stuff you don't need.
> 
> There are exceptions of course (installing solar panels or buying groceries in bulk are obvious examples), but in general terms spending money is not the way to save it. Sure, you got 2 for the price of 1 on whatever it was but that's still a waste if you didn't need either of them. It's amazing how many seem to not grasp this concept...




Agree with this. My Nanna had a a saying, "It's not a bargain if you don't need it".


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## Doris (22 October 2012)

Smurf1976 said:


> Simply stop buying stuff you don't need.
> 
> There are exceptions of course (installing solar panels or buying groceries in bulk are obvious examples), but in general terms spending money is not the way to save it. Sure, you got 2 for the price of 1 on whatever it was but that's still a waste if you didn't need either of them. It's amazing how many seem to not grasp this concept...




This time last year Coles had a super-special on 18 pack Sorbent toilet paper... 32 cents a roll. I bought up ten packs then Woolies had the same deal. I bought up another 10 packs.  A relative, last Xmas, was amazed coming down from the loft above my garages,  amazed that I'd bought the company out.   
I haven't seen them less than 50c a roll since. Time for another super-special! Too many visitors 

However... there is no use-by date on them.  
Oh how I've discarded things I've bought that were half priced specials and didn't get to use them in time.
I have a full pantry so I can cook whatever I want.  Better to plan meals a week ahead and buy weekly.


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## Doris (22 October 2012)

QSuper has been a great scheme for me since I retired at Easter two years ago.
I draw down on earnings and keep the capital intact. Well... almost intact. 

It works as long as my Balanced and Moderate options remain. No shares nor bonds!


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