We have both secured jobs in Broken Hill and have made the decision to make the move. We are jumping in with both feet, albeit with a lifeline back here in Coffs. We are renting our house out and buying one in Broken Hill. I hope to keep our mortgage below $500k which we should be able to manage with the rental income and our two wages. Down the track I would prefer to only own one house. I don’t trust the Australian housing market. I am pretty sure the rest of the family would disagree.

Looking through the real estate websites for houses has been… interesting. Most search results seem to have about 5+ car parking spaces and a variety of powerful air conditioning systems. The yards’ around the properties are either dusty barren wastes or sealed with tile, concrete or astro-turf. This all says a lot about Broken Hill. No water, hot as Hades and a long drive to the next town. I am really going to miss the beach.

We have a short-list and are flying out there next week to harass the real-estate agents. This time next week, if we are lucky, we’ll have found a house and be desparately trying to hurry approval for finance through.

Fifteen years ago I was following the founder of the Moxie cinema as he tried to work out his business. He shared his plans and budget on his blog and asked for comments. This was one of the things I loved about the internet. Suddenly we could share our thoughts and ask for advice from our community. I posted this around that time:

The Moxie Budget

Wow! I love this. I have been struggling with the idea of running my own business.
Do I pretend to be some kind of wannabee evil corporation so as to look ‘respectable’?! Or do I come across as some sort of half-assed odd jobber. Its tricky. I want to be totally open with my budget but have some sort of deep seated guilt about making money out of people.

That in a nutshell is probably why I am so bad at being self-employed. I have never really got past the moral dichotomy of being a capitalist or a socialist. More recently I have been simultaneously inspired (by the sensible investments) and repulsed (by the unchecked priviledge and tax evasion) at the FIRE movement. Reading the FIRE; Boglehead and Barefooter blogs have inspired me to share the financial devastation that is the result of my life.

Unlike all the the young-guns out there, planning their early retirements, I am too late. The miracle of compound interest is beyond my grasp. As you will see below there is not much hope of me spending my autumn years in unbridled luxury. January is the traditional month for fools making commitments so here goes.

I’m going to post a monthly summary of my underwhelming finances in the hopes of inspiring me to improve.

Earnings

• Gross $6,720 (December) | $32,114 (YTD)
• NETT $3,794 (December) | $23,566 (YTD)

Nowadays I work as a Nurse and my wages are directly proportional to how much work I put in. No fancy KPI bonuses for me. If I put in some hard yards on night shifts, weekends pick up extra shfts I can pull in more. Hard yakka is my main leverage to increase my funds.

Superannuation

• $114,296

This is with the First State Super High Growth units. 2018-2019 returned 8.2% with $998 fees.
I have paid in $2,802 so far this year. I am considering changing to a HostPlus Index fund to reduce fees.

The Australian Tax Office allows a ‘Concessional Contribution’ cap of $25k. This is the first year they are allowing us to Carry-forward to the next year for a five year window. However It would be better for me if I could somehow stack some more money in before June. Here is a table (data from 2015-16) I found which shows the median amount of Super Australians have depending on their age:

in 2016 superannuation assets

Cash in the bank

• $8,000

Owed on Mortgage (Rate: 3.38%)

• $170,282

I share this mortgage with my partner so technically I only owe $85,141. We are about to do some refurbs on our house. Some of the timber holding the roof up is rotten so it’s not going to be cheap. I expect the mortgage will go backwards in the short term. I find this depressing.

Home

• $500,000

I don’t really know what our house is worth but hopefully it’s worth more than our mortgage debt.

ETF Holdings

• $52,031

I am considering liquidating some of these. I can use the cash as a living expense. A larger proportion of my wages can then go into my Superannuation. I’ll be taxed when I sell the ETF’s but I think I’ll save that by reducing tax on my Super Contibutions.

GOLD(15);
IAF(35);
IEM(104);
VAS(211);
VGS(232)

I have left out our living expenses and my partners finances because it’s not up to me to share her business with random denizens of the internet.

A bald monetary snapshot of what I’m worth right now would be 8k cash + $52k equities - $85k mortgage = -$25k

Hello there H, You asked for some money advice. Let’s be clear I am no financial advisor. I am barely financially literate. It’s true however that I put my beloved R to sleep at night regaling her with my financial equivalent of a shortsighted Don Quixote attacking windmills. I do include management of my wages in my life plans and that is probably a step ahead some people. Everyone has different ideas of what to do with their money, their life and their time. All of which are deeply entwined. I would not recommend my crazy brains illogical and downright stupid ideas to anybody else. I guess what I am saying is don’t trust my nutty plans, work out your own crazy plans.

Don Quixote in the original Specsavers ad

Making Plans

What you have been doing is great, assembling all your ingoing money and outgoing money; your assets and liabilities. Just make it a habit, keep doing it. Personally I do something similar. I have a folder on my computer called ‘Tax’ inside that folder I have folders for each tax year e.g. ‘2016-7’, ‘2017-8’, 2018-9’.

A damn interesting picture of my tax folder

In each of these folders I have a few spreadsheets in which I work out my ins and outs and my assets and liabilities. I update them (irregularly) every 3-6 months. I also save any documents/reciepts that I might need come tax time. This all sounds slightly organised but it’s not really. I also have lots of tax related stuff sitting in my email and on websites (my broker, superannuation, nsw health, banks etc). Most of us are doing similar versions of this to lesser or greater degrees, just don’t stop doing it. You will work out your own system for organising all that information, probably better than my rag tag system. You will also begin to see where your own financial strengths and weaknesses are. Then you will be in a position to improve things.

What you Want is not always what you Need!

If you duckduckgo ‘personal balance sheet’ there is a ton of useful information like the ?Saudi Budget 101: How to Create a Personal Balance Sheet or this great thread on reddit and a bazillion others. I think just understanding what in your life are ins and outs and what are your assets and liabilities is a major step. Then when you look at your bank/credit card/mortgage/super statements you can decide what is a ‘need’ and what is a ‘want’.

Nerd wallet
The Difference Between Wants and Needs
Personal Finance: back to basics

Never Stop Learning

Reading stuff like the Barefoot Investor; following discussions on Reddit’s financial forums; and blogs like Mr Money Mustache have made me rethink my decisions. Just look out for the snake oil salespeople and the rich bastards showing off. I’m sure you have a bunch of resources too. Just make time to poke around some of the ideas and strategies people use. Ask questions, email, IM, talk to R or me about your ideas we can nut out stuff together.

Keep Saving

I don’t know about you but I’m crap at saving money. I remedy my crapness with a bunch of automatic transfers I set up on my bank account. Everytime I get paid most of it automatically dissappears the next day into the mortgage and house bills. Sometimes I reduce my savings to pay off debts but on the whole, like our worn out lawn mower, I try and keep it running.

Saving is not just about putting away your wages and not buying that overpriced daily chai latte. It’s about paying off debts. Look at your mortgage(s) can you roll it into a cheaper deal? Have you called your bank barefoot style?. Find a better mortgage with the help of ASICs MoneySmart. Get a variable rate. Credit cards are the gateway drug to modern day slavery, pay them off and fuck them off. Look up the Snowball method.

Own It

H, you’ll notice I did not use any of yours or my actual financial details to answer your questions. This is because nobody is more engaged in your financial status than you. If they are then I suspect their motives. This is one of the reasons I tend to not trust personal financial advisors. I have in the past and regretted it. That’s not to say they are all crooks but they do need to make a living and your money is it. Therefore I think it is important that you and I should engage in our financial situation, we should own it. Having said all that I will tell you what I would do in your situation - feel free to ignore me.

If your bank won’t flex consider a cheaper mortgage provider

1. Rent a room to help pay the mortgage.
2. Consider moving to a cheaper house.

Use the mortgage with the lowest interest rate to pay off all the other debts.

• Be wary of fees
• That means paying off your credit cards and then cancelling the account.
• Cut up the credit cards and burn the pieces.
• Replace your credit card habit with a bank account which you must always keep topped up. When you spend it save until it’s back to where you started.
• Only have one mortgage. Aim to get rid of it.

Think really hard about your regular expenses are they needs or wants?

I am happy to chat to you about stuff and I expect you can offer just as much advice I can. Just like everyone else I have no idea what the future holds. Just remember to wear sunscreen.

Cheers, Ruben

p.s I like obscure words which is where the title of this post came from: Mihamon => Mammon => Money

This piece was originally published on Patreon

For the first time since its inception, socialism is not a dirty word.

And try as they might to compromise its integrity, critics know they are unable to address the concept on its merits, because democratic socialism offers policies most people would actually vote for, epitomised by the success of Ocasio Cortez, Bernie Sanders, Jeremy Corbyn, and the election of Lopez Obrador in Mexico.

So they are forced to resort to the same old play book of character assassination and class warfare and spurious allegations.

Alexandria Ocasio-Cortez on Twitter

@johncardillo Hey John, 1. I didn't go to Brown or the Ivy League. I went to BU. Try Google. 2. It is nice. Growing up, it was a good town for working people. My mom scrubbed toilets so I could live here & I grew up seeing how the zip code one is born in determines much of their opportunity.

But too few of us really understand what democratic socialism is, though at least three generations have lived through one form of it or another. Yet we have come to lazily accept those ‘better days’ as the best capitalism had to offer.

The great irony is that the prosperity that transformed America and its allies into robust first-world nations is owed not to capitalism, but to democratic socialism whose policies, (though not without their flaws), helped shape the better part of the 19th and 20th centuries. But we’ll get to that shortly.

What is socialism?

Socialism is not what occurs when all industry is owned by the state, that’s communism.

True socialism is when workers own the means of production. It is the co-op model for the global economy. It opposes private profits and believes that private ownership constrains economic planning and leads to irrational decision making that concentrates wealth and power in the hands of a small minority.

Put simply, if the work you do results in profits for the company that employs you, you should be entitled to a share of those profits. When all workers hold some kind of equity in their own employment, companies and businesses are structured democratically where all staff are involved in operational decision making and there is greater incentive for productivity and efficiency. Socialism gives workers proverbial skin in the game. Work is no longer just a job that people can punch in and out of, but an investment in their own financial futures.

But democratic socialism doesn’t even go that far, embracing a public / private ownership model to guarantee full employment.

And, as I have written before, it rightly acknowledges the role of government as the private sector’s bank and offers corporate incentives like tax cuts and subsidies if it supports business and employment. (The private sector has been enjoying the benefits of corporate socialism for years. Yet somehow it objects when they are directed towards workers and households).

What is democratic socialism?

Democratic socialism believes that employment, education and health care are a universal human right, along with the right to organise into unions. It recognises there are significant conflicts of interest in the way the global economy is currently structured.

It advocates for full employment and the right to meaningful work that covers the basic costs of living.

It opposes the use of gender and racial discrimination, coercion, brutality and violence to defend the status quo.

It believes in the responsibility of government to plan economies to ensure sustainable employment, and an equitable distribution of resources in a way that ensures a basic quality of life for the greatest number of people. (Besides which, real democratic socialism recognises that the wealthy needn’t pay a cent more in tax to ensure that, to quote Ocasio-Cortez, “nobody should be too poor to live”).

It recognises the existence of an ever fragmenting class system and advocates for policy that address the gross inequality that pervades the current economic order of, to paraphrase journalist Elliot Gabriel, “monopoly-finance and surveillance capitalism, commodifying and intruding into every aspect of existence.”

This is not a new or radical concept. In fact, much of the developed world has benefited greatly from democratic socialism since at least the end of WWII.

Democratic socialism: We already know it works

The thing is, we already know democratic socialism works. Our parents, grand-parents and great-grandparents were all beneficiaries of its policies, before they pulled the proverbial drawbridge up behind them. Social Security. Medicare. The minimum wage. All the result of democratic socialism. The New Deal was a form of democratic socialism, (but in order for it to pass Congress, it was legally structured to exclude African Americans and other minorities, Roosevelt’s unforgivable concession to the South).

Post-War public spending & job guarantees across the US, UK and Australia. Women’s suffrage. The Voting Rights Act. The right to form unions and job programs for the unemployed:

Democratic. Socialism.

These things all helped to create and enrich the middle class, without which we would still be mired in Great Depression style living standards.

Whether they know it or not, white America has long been the beneficiary of democratic socialism, while the rest of the country, and the world, has been forced to live off its table scraps. Perhaps the wave of white supremacist sentiment sweeping the globe can be interpreted as the white middle class being forced to confront for the first time, a significant decline in living standards that most of us have long been accustomed to.

Yet, instead of recognising they have been lumped in with the rest of us, too many conservatives, Trump supporters and out-and-out racists have the audacity to blame immigrants, black people, women, the LGBTIQA and ‘political correctness’ for their economic dispossession instead of recognising that the system was always designed to put workers at a disadvantage, and the remnants of the white middle class are simply its latest victims. Welcome to the real world.

One would hope that, despite our political differences, instead of turning on each other, we should all be aiming our vitriol and discontent at the system itself, and those whose deliberate acts of legislation has led to what anthropologist, professor David Graeber describes as “managerial feudalism”: a system so precarious and with so few rights for workers that it has forced upon us a great compliance.

Graeber argues that the very structure of the job market is a long-standing political project and form of social control that systematically extracts wealth and resources, channeling it to the barons of industry, creating a permanent pool of unemployed that it makes alternative employment so difficult to come by that it keeps workers just insecure enough that they cannot rebel either against government or the conditions of their employment. (And thus, we turn on each other, instead).

The greatest trick late stage capitalism has ever played, is convincing the public it has always been this way. But in reality, over the last 30–40 years we have witnessed the great dismantling of the democratic socialist state, and watched as it was slowly replaced by financialisation and corporatocracy.

We are only just beginning to see the true nature of capitalism as more than half of America’s population now lives below the poverty line, while the underclass in the UK and Australia continue to grow.

Millennials may not remember — or even have been alive for — the last drops of prosperity that trickled through the 80s and 90s. Regardless, it is young people that are now driving the engine of democratic socialism and are responsible for its growing popularity.

Many may not have been alive for the New Deal or post-war job guarantees, but millennials are the first generation to experience less prosperity than their parents, grand-parents, or great-grandparents.

We have lived through the privatisation of schools and publicly owned assets. Older millennials have lived through two major financial crises, and two Gulf Wars. We’ve seen the cost of basic health care become prohibitive to all but the wealthiest of our communities. We know it’s harder now than almost during any other time in history to find a full time job, and even if we’re lucky enough to hold one down, it’s unlikely to cover the cost of living and thus requires us to plunge ourselves into ever more debt just to keep the lights and heat on.

As I mentioned before, democratic socialism is not a new concept. Government once existed to serve the needs of the great majority. Finally, it seems more of us are coming to the conclusion that if it was good enough for our grandparents, and it’s good enough for the private sector, then it’s good enough for the rest of us.

Thank you for reading. I couldn’t afford to continue my research, or write this book, were it not for the support of my generous sponsors. Support independent journalism, sponsor me on Patreon, starting at $3 a month, or throw some money at my PayPal.

Democratic socialism: We already know it works was originally published in Hello Humans on Medium, where people are continuing the conversation by highlighting and responding to this story.