Waiting for things to improve
#16
Re: Waiting for things to improve
Well of course it is impossible to answer until afterwards but here's some rough figures.
If I start with £10,000 convert now to AUD at 1.75 and place on deposit at 6.5% for one year then I end up with $18,637
i.e. 10,000 x 1.75 x 1.065
If I start with £10,000 keep in sterling at 0.5% interest for one year I end up with £10,050.
For me to be better off keeping my money in GBP for the year and then converting, the rate would have to rise to 1.854478 by the end of it.
i.e. 18,637 / 10050.
So if you think the rate will go above 1.854478 in a years time then you are better off keeping it in GBP. If you think it won't then might as well convert now.
It is crystal ball time I am afraid.
Also this is a bit over simplified because if the GBP is strengthening then it might indicate that the interst rate is rising too as the two are linked.
If I start with £10,000 convert now to AUD at 1.75 and place on deposit at 6.5% for one year then I end up with $18,637
i.e. 10,000 x 1.75 x 1.065
If I start with £10,000 keep in sterling at 0.5% interest for one year I end up with £10,050.
For me to be better off keeping my money in GBP for the year and then converting, the rate would have to rise to 1.854478 by the end of it.
i.e. 18,637 / 10050.
So if you think the rate will go above 1.854478 in a years time then you are better off keeping it in GBP. If you think it won't then might as well convert now.
It is crystal ball time I am afraid.
Also this is a bit over simplified because if the GBP is strengthening then it might indicate that the interst rate is rising too as the two are linked.
In simple terms the problem is that the UK has got itself into major debt and needs interest rates to stay low in order to be able to afford the repayments. This (and the fact that the economy is in a terrible state and getting worse, ignore the headlines & watch the unemployment figures) makes the pound more likely to fall than to rise. On the other hand look at Australia, relatively low debts and raising interest rates to keep its economy cool, this means the GBP/AUD is only going one way in the near term, and does not point to a strengthening pound.
The debt is the reason why the Govt is cutting expendature (services) while increasing tax, its to convince the people we owe that we can make the repayments, and this is before an election when they're trying to also stay popular with the public. I fear things in the UK are going to be very painful afterwards, regardless of who wins.
In summary I know my savings are going to buy less in Australia when we get there, but salaries there now look really attractive (quite a bit more than the UK when converted to pounds), and I'm really gratefull I won't be here when the public gets landed with the bill for saving the irresponsible bankers/govt who have in effect taken out huge loans in our name to cover the losses incurred by their greed/stupidity respectively.
I know people think the Australian Govt has made mistakes in handling the crisis but Australia is in a far better economic position than the UK, not least due to the fact that they actually produce real things (mostly raw materials).
#17
Just Joined
Joined: Mar 2009
Posts: 15
Re: Waiting for things to improve
We are just about to put our house up for sale after the Olympics (we are in the vancouver GVRD) so for us it is a matter of just getting all our ducks in a row. Even if it sells for less then what it could have in the scheme of things it doesnt matter. (they actually figure it will go up after the Olympics)
The goal is to move to Australia not sit in Canada waiting for the market to get better.
Warm weather and sunshine as oppossed to dark dreary nasty wet or frozen weather .
we allready did our initial entry to validate so we have some time but in all honesty we never want to see another canadian winter again.
The goal is to move to Australia not sit in Canada waiting for the market to get better.
Warm weather and sunshine as oppossed to dark dreary nasty wet or frozen weather .
we allready did our initial entry to validate so we have some time but in all honesty we never want to see another canadian winter again.
#19
Just Joined
Joined: Mar 2009
Posts: 15
Re: Waiting for things to improve
you have to ask yourself if that that 35,000 is the decideing factor?
And can you afford to hang on ? Does your visa expire? can and will you make it up fairly quickly wage wise once you are in Au
will that extra 35,00 that you get a year from now mean as much if aus real estate goes up the equal or greater amount?
And can you afford to hang on ? Does your visa expire? can and will you make it up fairly quickly wage wise once you are in Au
will that extra 35,00 that you get a year from now mean as much if aus real estate goes up the equal or greater amount?
#20
Re: Waiting for things to improve
We need a bit of cash to fund the move otherwise if we sell for £35k less we won't have enough money to bring out to start living. That will pay the estate agent, solicitor and mortgage. That's about it.
Part of me thinks we should just sell to cut our losses and run so to speak. I would feel more comfortable being in Australia and not having financial ties to the UK. We've got a little while to go yet so we'll chance our luck for a bit longer and then it will be crunch time!
We will be renting intially for a while to get the area sussed and schools etc before we buy. So I'm not immediately worried about the house prices. We'll buy when we can afford to buy if ever.
Oh and our visa doesn't expire until 2014. We'd have to validate this year at the very least so time is on our side in that respect.
The waiting game!
Part of me thinks we should just sell to cut our losses and run so to speak. I would feel more comfortable being in Australia and not having financial ties to the UK. We've got a little while to go yet so we'll chance our luck for a bit longer and then it will be crunch time!
We will be renting intially for a while to get the area sussed and schools etc before we buy. So I'm not immediately worried about the house prices. We'll buy when we can afford to buy if ever.
Oh and our visa doesn't expire until 2014. We'd have to validate this year at the very least so time is on our side in that respect.
The waiting game!
#21
Just Joined
Joined: Mar 2009
Posts: 15
Re: Waiting for things to improve
make sure you validate even if it is a quick trip for a few days that way you have your options open. Dont look at it as a holiday look at it as part of completing your migration application.