Are we frugal?

This is a question which I have been asking myself a lot over the last few years without coming up with a definitive or even satisfactory answer.

I know that there are people who manage to account for every dollar that they earn and for every cent that they spend. Unfortunately, I am not one of them. I operate a lazy man's budget (separate post to follow) and do not track expenditure closely. So long as my expenditure is roughly within the budget, I pay relatively little attention to my spending on day to day items. Larger items do get closely scrutinised. Some examples:

1.We shopped around for mortgages to get the best terms available each time we borrowed;
2.We do not own a car, prefering to rely on public transport.

I do save a respectable portion of my income each year - but I do not know off the top of my head exactly how much or what percentage of my income is saved each year. I suspect it would be possible to do better.

I can only give myself a C or, at best, a B grade for frugality. In future posts I will examine my budgeting system and selected items of expenditure to see where improvements can be made.

A tax audit.....

Well, not quite a formal audit but the Inland Revenue Department is querying the tax return for the 2003/4 tax year on an investment property we used to own.

Fortunately, I have supporting documents and the numbers add up to what I put on the tax return so I do not anticipate any problems.

What a difference a week makes.....

Having been away for just over a week, it is quite interesting how much volatility the markets and the value of my investments experienced in a relatively short space of time. The value of the share portfolio, the unit trusts and silver all dropped by amounts that were noticable but, in the overall scheme of things, not significant.

I have asked myself whether this volatility marks the end of the bull market or is merely an overdue correction in a bull market? Commentators seem to be divided (as usual). Given that my investment strategy would not vary considerably whatever the conclusion, I decided that I do not need to worry about short term market timing issues to any great extent.

With at least 10 years to go to retirement (unfortunately), I am a net accumulator of assets (mainly shares and property). My investment strategy mainly involves acquiring assets which offer reasonably yields that have the potential to grow over time to counter the effects of inflation. Although the short term effect of a decline in the value of the private portfolio can be painful, if not discouraging, a more rational approach is to recognise that weaker markets provide opportuities to acquire assets at more favourable prices.