Update No. 300 – 31/07/17

Spring Clean

As I said in this month’s update, the administrative workload from the launch of EGP Concentrated Value Fund doesn’t leave a lot of time for the writing of lengthy, detailed blogs and updates, so we will be brief for the next couple of months until things get back to normal.

I did however think it was worth sharing some of how I spent an hour of my time this past Sunday as an encouragement to the readers of the blog to think about a financial spring clean. Spring fast approaches after all…

I got a letter from my electricity/gas provider recently indicating prices would be rising in FY18. As a warning to anyone supplying a good or service to me, such an event will cause a review of your offering. EVERY. SINGLE. TIME.

It was just such a letter last year from my prior provider that took me to my current provider. And here I am again moving on. When your product is a commodity, you’d damn well best be providing the cheapest service, or you won’t be providing mine. I am the least loyal customer in the world. If you’re not the cheapest for any given product or service, then you’d best be doing something special to differentiate yourself.

An out of cycle rise to a line of credit I keep available caused a change of financial institution not so long ago. It is imperative as customers that we are vigilant in such situations. The financial harms from inertia in such situations can be significant. Someone with a $400k mortgage who could achieve a 0.25% rate reduction is causing themselves a $1,000 annual harm.

So I thought I’d use this month’s blog to remind people of Benjamin Franklin’s sage advice “Beware of little expenses. A small leak will sink a great ship”.

Annual expenses such as insurances should be diligently reviewed as renewals arrive. All other costs, particularly annuity style expenses such as electricity, gas, telephone and broadband services and home loans should be put down for an annual review.

Vigilance on such matters will ensure you have additional ‘disposable income’ that I recommend ‘disposing’ into investments if wealth creation is important to you.

As I pointed out to my Twitter followers Sunday, to someone in the 37% tax bracket, a $1,000 in expenses reduced is the equivalent of getting a $1,587.30 pay rise. And you don’t even have to persuade the boss!

Ben Franklin also said “A penny saved is a penny earned?” My free advice in our high-tax modern society is “A penny saved is probably about 1.59 pennies earned” It doesn’t have quite the same ring as Ben Franklin’s message, but it should prompt action more urgently… – Tony Hansen 31/07/2017

Jun 30th 2017 Current Price Since July 1st 2017 Annualised Since Inception
EGP Fund No. 1 1.9544 1.9676*1 0.67%*1 15.97%*2
Benchmark 55758.56 55752.43 (-0.01%) 7.86%

*1 after a 31 May 2013 dividend of 2.333 cents per share (cps) plus 1.000 cps Franking Credit, a 31 May 2014 Dividend of 7.000 cps plus 3.000 cps Franking Credit, a 31 May 2015 Dividend of 8.6667 cps plus 3.7143 cps Franking Credit, a 31 May 2016 Dividend of 6.0000 cps plus a 2.5714 cps Franking Credit and a 31 May 2017 Dividend of 7.000 cps plus 3.000 cps Franking Credit

*2 calculated based on dividends reinvested


EGP Capital Pty Ltd (ABN 32 145 120 681) (EGP Capital) is the holder of AFSL #499193. Any advice contained in this presentation is general advice only. None of the information provided is, or should be considered to be, personal financial advice. The content has been prepared without taking into account your personal objectives, financial situations or needs. You should seek your own advice before making any financial or investment decisions. The information provided in this presentation is believed to be accurate at the time of writing. None of EGP Capital, Fundhost or their related entities nor their respective officers and agents accepts responsibility for any inaccuracy in, or any actions taken in reliance upon, that information. The managed investment fund product (Fund) discussed in this presentation will be offered via a Product Disclosure Statement (PDS) which contains all the details of the offer. The EGP Concentrated Value Fund PDS is issued by Fundhost Limited as responsible entity for the Fund. Before making any decision to make or hold any investment in a Fund you should consider the PDS in full. The PDS will be made available by contacting EGP Capital (info@egpcapital.com.au). Investment returns are not guaranteed. Past performance is not an indicator of future performance.