Money....Am I missing something?
Aug 9th 2002, 12:47 am
#16
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
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Re: Money....Am I missing something?
Hi Sophia.
Here's an example of how movements in the currency can cut the value of your money:
1. Move to Australia in 1997 and convert £100,000 to Aussie dollars - exchange rate around A$2.0 to A$2.1 to the GBP => you get (say) A$200,000.
2. Move back to the UK today when the exchange rate is about A$2.8 to the GBP => you get back just under A$71,430 => you have "lost" 28.5% of your capital.
I think the point to bear in mind is that no-one knows where the A$ is going to go against the GBP. Historically the rate is good at the moment for those heading to Australia from the UK, but what if the UK becomes part of the Euro Zone? Who knows what your Aussie $'s would be worth if you wanted to move back to the UK in 5 years from now? The A$-GBP exchange rate is by no means a constant and as you can see from the above you can lose a lot of your money over a 5-year period.
And of course, if you disengage yourself from the UK property market and then want to move back at some point you may well find that the value of UK property has accelerated significantly.
All of which probably explains where Dotty is coming from ... then again, if you are lucky you might find the reverse occurs.
If you know you aren't ever heading back to the UK and are only ever going to holiday in Australia then having your capital and earning in Aussie $'s isn't an issue.
Best regards.
Here's an example of how movements in the currency can cut the value of your money:
1. Move to Australia in 1997 and convert £100,000 to Aussie dollars - exchange rate around A$2.0 to A$2.1 to the GBP => you get (say) A$200,000.
2. Move back to the UK today when the exchange rate is about A$2.8 to the GBP => you get back just under A$71,430 => you have "lost" 28.5% of your capital.
I think the point to bear in mind is that no-one knows where the A$ is going to go against the GBP. Historically the rate is good at the moment for those heading to Australia from the UK, but what if the UK becomes part of the Euro Zone? Who knows what your Aussie $'s would be worth if you wanted to move back to the UK in 5 years from now? The A$-GBP exchange rate is by no means a constant and as you can see from the above you can lose a lot of your money over a 5-year period.
And of course, if you disengage yourself from the UK property market and then want to move back at some point you may well find that the value of UK property has accelerated significantly.
All of which probably explains where Dotty is coming from ... then again, if you are lucky you might find the reverse occurs.
If you know you aren't ever heading back to the UK and are only ever going to holiday in Australia then having your capital and earning in Aussie $'s isn't an issue.
Best regards.
Originally posted by sophia
Hi guys
Not wanting to show myself up as thick here, but I've read a couple of threads complaining about the currency exchange from £ to $'s and vice versa and I'm a bit confused...
Lets suppose I have an exchange rate of $2.5 to the £ (Obviously I'm hoping it'll be MUCH better, but for ease of conversion lets use this) and I've got £100,000 to exchange..this gives me a princely sum of $250,000 right? So if I then buy a house for that amount and then 5 years down the line decide I don't want to stay in Oz, surely when I do the exchange back into sterling I'll get pretty much the original amount back (give or take a bit depending on the exchange rate at the time)....So why then are people complaining about the weak dollar??? If you've got £100,000 in one currency, surely you've still got £100,000 but in a different currency???
hmmm, it sounds right to me, but am I missing something...or are they???
confused sophia xx
Hi guys
Not wanting to show myself up as thick here, but I've read a couple of threads complaining about the currency exchange from £ to $'s and vice versa and I'm a bit confused...
Lets suppose I have an exchange rate of $2.5 to the £ (Obviously I'm hoping it'll be MUCH better, but for ease of conversion lets use this) and I've got £100,000 to exchange..this gives me a princely sum of $250,000 right? So if I then buy a house for that amount and then 5 years down the line decide I don't want to stay in Oz, surely when I do the exchange back into sterling I'll get pretty much the original amount back (give or take a bit depending on the exchange rate at the time)....So why then are people complaining about the weak dollar??? If you've got £100,000 in one currency, surely you've still got £100,000 but in a different currency???
hmmm, it sounds right to me, but am I missing something...or are they???
confused sophia xx
Aug 9th 2002, 4:04 am
#17
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Joined: Mar 2002
Posts: 756
Re: Re: Money....Am I missing something?
Originally posted by Russell Driver
[BIt was only a few years back that the rate was $2 to 1 pound so if you did return
your capital has a chance of diminishing.
Russell [/B]
[BIt was only a few years back that the rate was $2 to 1 pound so if you did return
your capital has a chance of diminishing.
Russell [/B]
Maybe most prudent for migrants who may want to return to UK after some years to keep a reserve cashpile/capital pile in GBP as a hedge - is that legal in Aus? It certainly is in NZ, you just have to declare worldwide income.
All the best
Aug 9th 2002, 4:52 am
#18
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Posts: n/a
nothing wrong with that if you have cash pile! i know some British ex pats here have HSBC aussie dollar and sterling accounts, which I hear you can move funds between on the internet. I have never done this myself as i don't like to speculate on exchange rate movements, but if you are that way inclined it can be done.
Aug 9th 2002, 8:03 am
#19
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Posts: n/a
Re: Money....Am I missing something?
I live in South Africa, and it would be great to have your problem. The SA rand was 2
for a C and 0.6 for a US$ when I started work 20 years ago It is now ZA Rand 18=1 £
and 10.6=1 US$. 10.6=1 US$ This means truck loads of the stuff will buy a few Aus $
"sophia" <[email protected]> wrote in message news:[email protected]...
> Hi guys
> thanks for the responses. Good to know I'm not stupid!!
> Ian, I agree with you, we bought our £50,000 2 bedroom house in Wakefield 5 years
> ago. We had a good income between us and seemed to spend our money on bills,
> mortgage, life insurance etc etc etc...we do not have an extravagant lifestyle...on
> the contrary but we never seemed to have money left over for savings or holidays or
> anything remotely luxiourious. To put it mildly we were fed up with the constant
> work to pay bills cycle and wanted more from life.
> Since we had to deal with my illness and the birth of our son our priorities have
> changed significantly and we do not want our son to grow up thinking that this mad
> frenetic lifestyle we all seem to aspire to in the UK is "normal".
> We can afford to buy a house outright and have some money in the bank in Australia
> which is something we'd never achieve here (well, perhaps when we're old and grey)
> plus our son can grow up with, hopefully a much more balanced approach to life than
> the one we seem to be pushing here in the UK...and the best thing of all is that we
> will be able to afford for ME to bring up our son and not a stranger, which is all
> I ever wanted as a mother.
> It is good to know however, that I'm not missing anything and we do not suddenly
> "lose" a third of our money should we ever decide to come back to the UK!!
> love sophia xx
> --
> Posted via http://britishexpats.com
for a C and 0.6 for a US$ when I started work 20 years ago It is now ZA Rand 18=1 £
and 10.6=1 US$. 10.6=1 US$ This means truck loads of the stuff will buy a few Aus $
"sophia" <[email protected]> wrote in message news:[email protected]...
> Hi guys
> thanks for the responses. Good to know I'm not stupid!!
> Ian, I agree with you, we bought our £50,000 2 bedroom house in Wakefield 5 years
> ago. We had a good income between us and seemed to spend our money on bills,
> mortgage, life insurance etc etc etc...we do not have an extravagant lifestyle...on
> the contrary but we never seemed to have money left over for savings or holidays or
> anything remotely luxiourious. To put it mildly we were fed up with the constant
> work to pay bills cycle and wanted more from life.
> Since we had to deal with my illness and the birth of our son our priorities have
> changed significantly and we do not want our son to grow up thinking that this mad
> frenetic lifestyle we all seem to aspire to in the UK is "normal".
> We can afford to buy a house outright and have some money in the bank in Australia
> which is something we'd never achieve here (well, perhaps when we're old and grey)
> plus our son can grow up with, hopefully a much more balanced approach to life than
> the one we seem to be pushing here in the UK...and the best thing of all is that we
> will be able to afford for ME to bring up our son and not a stranger, which is all
> I ever wanted as a mother.
> It is good to know however, that I'm not missing anything and we do not suddenly
> "lose" a third of our money should we ever decide to come back to the UK!!
> love sophia xx
> --
> Posted via http://britishexpats.com
Aug 10th 2002, 10:33 am
#20
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Thread Starter
Joined: Feb 2002
Location: Rockingham, WA
Posts: 917
Hi Guys
Thanks for the replies....I think I'm sort of getting it now (what Dotty is trying to say), but from a purely personal point of view I know money is important...to a degree, but for us it isn't the be all and end all.
If at the end of the day we ever decide to return to the UK and we lose loads of money in the currency exchange then SO WHAT?? At least we'll have had an amazing time learning about a different culture and way of life that is definitely not possible in the UK and who can put a price on that??
NewstartNZ thanks for your concern...so far so good, have been clear now for 2 years (they sort of start counting from the day they operate) so fingers crossed eh? Just out of interest that magazine article I mentioned a while back is due out next week....tells our story of woe (REAL magazine)...not sure how they will portray it, but hey at least it'll raise awareness in other young women (or so they told me when they bullied me into doing it!!)...
love sophia xx
Thanks for the replies....I think I'm sort of getting it now (what Dotty is trying to say), but from a purely personal point of view I know money is important...to a degree, but for us it isn't the be all and end all.
If at the end of the day we ever decide to return to the UK and we lose loads of money in the currency exchange then SO WHAT?? At least we'll have had an amazing time learning about a different culture and way of life that is definitely not possible in the UK and who can put a price on that??
NewstartNZ thanks for your concern...so far so good, have been clear now for 2 years (they sort of start counting from the day they operate) so fingers crossed eh? Just out of interest that magazine article I mentioned a while back is due out next week....tells our story of woe (REAL magazine)...not sure how they will portray it, but hey at least it'll raise awareness in other young women (or so they told me when they bullied me into doing it!!)...
love sophia xx
Aug 10th 2002, 2:14 pm
#21
Guest
Posts: n/a
Re: Money....Am I missing something?
"dotty" <[email protected]> wrote in message news:[email protected]...
> Work for 10 years in Uk, average income say 23000 pounds, work for same in Oz earn
> average $40,000. Now convert to any currency you fancy which person has a bigger
> net worth?
An irrelevant comparison unless you're both about to retire in some third country
together and add up your differences. The earnings are relative to the cost of
living in each country.
> Add UK property growth 20%, add average aussie property growth 7%.
Where did these figures come from? Are you comparing some outer-suburb backwater to
a high-growth boom suburb? That's what it sounds like, but if you provided a source
I guess you could prove me wrong.
Chris
> Work for 10 years in Uk, average income say 23000 pounds, work for same in Oz earn
> average $40,000. Now convert to any currency you fancy which person has a bigger
> net worth?
An irrelevant comparison unless you're both about to retire in some third country
together and add up your differences. The earnings are relative to the cost of
living in each country.
> Add UK property growth 20%, add average aussie property growth 7%.
Where did these figures come from? Are you comparing some outer-suburb backwater to
a high-growth boom suburb? That's what it sounds like, but if you provided a source
I guess you could prove me wrong.
Chris
Aug 11th 2002, 7:38 am
#22
Guest
Posts: n/a
Re: Money....Am I missing something?
Yes, it is legal for Australians to hold bank accounts in currencies other than AUD -
whether with an Australian or overseas bank - provided that any income is declared.
There may be a capital gains tax implication too if you sell a foreign currency for
more AUD than you've bought it for, but I'll have to defer to Alan on that.
Jeremy
>On 10 Aug 2002 04:46:17 GMT, newstartnz <[email protected]> wrote:
>Originally posted by Russell Driver
>> [BIt was only a few years back that the rate was $2 to 1 pound so if you did
>> return your capital has a chance of diminishing.
>> Russell
>...or increasing! Eg exchange now at GBP1=AUD2.85, Exchange back in 10 years when
>GBP1=AUD2 (or rather, EUR0.5=AUD2?!). Easy money!
>Maybe most prudent for migrants who may want to return to UK after some years to
>keep a reserve cashpile/capital pile in GBP as a hedge - is that legal in Aus? It
>certainly is in NZ, you just have to declare worldwide income.
>All the best
>--
>Posted via http://britishexpats.com
whether with an Australian or overseas bank - provided that any income is declared.
There may be a capital gains tax implication too if you sell a foreign currency for
more AUD than you've bought it for, but I'll have to defer to Alan on that.
Jeremy
>On 10 Aug 2002 04:46:17 GMT, newstartnz <[email protected]> wrote:
>Originally posted by Russell Driver
>> [BIt was only a few years back that the rate was $2 to 1 pound so if you did
>> return your capital has a chance of diminishing.
>> Russell
>...or increasing! Eg exchange now at GBP1=AUD2.85, Exchange back in 10 years when
>GBP1=AUD2 (or rather, EUR0.5=AUD2?!). Easy money!
>Maybe most prudent for migrants who may want to return to UK after some years to
>keep a reserve cashpile/capital pile in GBP as a hedge - is that legal in Aus? It
>certainly is in NZ, you just have to declare worldwide income.
>All the best
>--
>Posted via http://britishexpats.com
Aug 11th 2002, 8:04 am
#23
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Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Re: Money....Am I missing something?
Quite so Jeremy - if you are tax resident in Australia and "make money" by holding (say) GBP's on your arrival and convert these funds into Aussie$'s at a later date when they are worth more this increase is subject to tax in Australia.
Best regards.
Best regards.
Originally posted by Jaj
Yes, it is legal for Australians to hold bank accounts in currencies other than AUD -
whether with an Australian or overseas bank - provided that any income is declared.
There may be a capital gains tax implication too if you sell a foreign currency for
more AUD than you've bought it for, but I'll have to defer to Alan on that.
Jeremy
Yes, it is legal for Australians to hold bank accounts in currencies other than AUD -
whether with an Australian or overseas bank - provided that any income is declared.
There may be a capital gains tax implication too if you sell a foreign currency for
more AUD than you've bought it for, but I'll have to defer to Alan on that.
Jeremy
Aug 11th 2002, 12:53 pm
#24
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Joined: Apr 2002
Location: From Worcestershire to Perth WA
Posts: 1,106
Hi All
Some of us really dont have alot to take , we are not in a fortunate position to be able to go out and buy outright, we couldnt here either , so thats that. We dont have a huge deposit to put down on a house , cant here either. We have had i suppose your typical run of bad luck , never mind , we will get through , we feel we have a very small amount of money and we are happy as a family and we can go out to australia and live better than here , and still be happy.
We work hard and kids dont go without , we sold our house last year , if we had held onto it till now we would have made 40k , but our chidren were unhappy and i was unhappy , they were being threatned , so we sold for the safety of our kids , you see , money isnt everything !!!!!!!
But hey roll on october we are off to start our new lifes with our little bit of money , have a good weekend all.
Joanne, paul , scott and shawnie
Some of us really dont have alot to take , we are not in a fortunate position to be able to go out and buy outright, we couldnt here either , so thats that. We dont have a huge deposit to put down on a house , cant here either. We have had i suppose your typical run of bad luck , never mind , we will get through , we feel we have a very small amount of money and we are happy as a family and we can go out to australia and live better than here , and still be happy.
We work hard and kids dont go without , we sold our house last year , if we had held onto it till now we would have made 40k , but our chidren were unhappy and i was unhappy , they were being threatned , so we sold for the safety of our kids , you see , money isnt everything !!!!!!!
But hey roll on october we are off to start our new lifes with our little bit of money , have a good weekend all.
Joanne, paul , scott and shawnie
Aug 12th 2002, 6:04 pm
#25
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Thread Starter
Joined: Feb 2002
Location: Rockingham, WA
Posts: 917
Hi Joanne
Sorry to hear about your run of bad luck, but you definitely did the right thing...I mean you and your childrens safety is WAY more important than bricks and mortar.
I know that to many people money is very important, and to some degree I would say it is, but at the end of the day your quality of life is far more important and if this move means your life quality improves and your children are happier...who cares if you can't afford a massive house??
We were fortunate (if you can say that) that when I got the cancer our insurance company coughed up which will give us a bit of a head start, but believe me we'd have still done it even if we were struggling to get the airfare together. As I'm forever saying LIFE IS WAY TOO SHORT.
All the best for the future, but I'm sure you'll make a success of it!!
love sophia xx
Sorry to hear about your run of bad luck, but you definitely did the right thing...I mean you and your childrens safety is WAY more important than bricks and mortar.
I know that to many people money is very important, and to some degree I would say it is, but at the end of the day your quality of life is far more important and if this move means your life quality improves and your children are happier...who cares if you can't afford a massive house??
We were fortunate (if you can say that) that when I got the cancer our insurance company coughed up which will give us a bit of a head start, but believe me we'd have still done it even if we were struggling to get the airfare together. As I'm forever saying LIFE IS WAY TOO SHORT.
All the best for the future, but I'm sure you'll make a success of it!!
love sophia xx
