to move or not to move...that is the question

So my landlord wants to increase the rent. Argh. We've been here two years; moving in during the GFC when prices were kept low. Plus we're a little out of Central so the rent's not too high, however as the new MTR will reach us soon rents are starting to creep up.

To see what else I could get for my money (rent is $17,500 now, landlady wants to increase to $19,000) first I had a bash at the online real estate websites (fail) and then spoke with two different agents. With their help I'm now aware that nicer (i.e. renovated) apartments identical to mine in the same apartment building are going for $18,500+. Ok, so she's not being totally unreasonable however our flat is not renovated; our bathrooms are pretty hideous, as is the kitchen.

Now initially we thought we should move - why pay $19k for an unrenovated flat when we can pay the same for a renovated one? My apartment complex is pretty old and no-frills (you step out of the lift onto my floor and it looks like you're in some dirty industrial complex - manky white tiles and ugly lighting...weird cooking smells). So I thought for my $$ I should splash out on swanky 'gweilo' digs with the whole gym/pool shenanegans. Boy was I disappointed. The complexes close enough to Central, in my price range, were 'all looks no substance'. Beautiful fittings but such a terrible layout with zero storage. I have a LOT of clutter...storage is pretty high on my list.

As if my frustration wasn't bad enough but its summer here and sweltering. So I'm losing patience fast, treking around in the stinking heat only to be disappointed again and again. And I do what any self respecting person would do...I quit. That's it, white flag, I'm going to stay put. The cost of moving is too expensive (removals + one months rent as fee to the agent + 2 months rent as bond) plus the 2nd agent told me now is just not a good time in the market for tenants to be negotiating.

Fine. We're staying. But, we were able to negotiate a little. We took a quick video of a nicer flat in our building, same layout only renovated, renting for $18,500. After showing the landlady, she agree to reduce our rent to $18,500. That's a saving of $6,000 a year so not to shabby.

And for the fun part. Because our place is still not renovated, My solution - I will spend one month's rent jazzing the place up so it feels like a new home!

Which brings me to announce my new challenge - Jazzing up a HK apartment for $19k. A big challenge on a small budget but let's see how we go.

First item in the 'Jazzercise' - $26 spent at Japan Home to buy a lid organiser for the kitchen. Yes, this is petty but my kitchen is so small its a joke and the lids falling on my head has been driving me nuts forever.

TWFT: Singapore GST

Saving on Singapore GST

Great news for tourists to Singapore - thanks to their Tourist Refund Scheme (TRS) you can receive a refund of the GST you paid while shopping during your stay.

Not all stores in Singapore participate, and you need to spend a minimum of S$100 per day at that store, and the goods can't be consumable within Singapore (i.e. your hotel or a meal) to be eligible, but it's a great scheme regardless.

Here's the details:

~ carry your passport when shopping as the store clerk will need to sight it when you make your purchases

~ once eligible (spent enough) the participating store will give you your TRS receipt in an envelop (it's REALLY long and will be separate to your normal purchase receipt)

~ when you fly out of Singapore you have 2 opportunities to claim at the airport
1. For goods packed in you Check-in luggage, take your TRS receipt + the goods you purchased to the GST Customs table in the departure hall, or
2. Once checked in take your TRS receipt + the purchased goods to the GST Customs table near the departure gates (it's near the Duty Free shops)

I got a little confused at this point so learn from my bumblings...

~ Show the Customs officer your

• passport
• flight ticket
• goods
• purchase receipt 
• TRS receipt

They'll then stamp the TRS

~ Now you have a choice of 2 counters - look at the envelop your TRS receipt came in, it'll have a company logo (i.e Global Refund OR Premier Tax Free) [I didn't notice this and went to the wrong counter...opps]

~ The clerk at the counter will just need to see your stamped TRS receipt and will then give you the option to have your GST reimbursed as Cash or direct to your Credit Card

And you're done! If there's not to big a queue you should be in and out in 15 minutes - with enough time to spend your change at Duty Free before departure :) [I stocked up on some Bombay Gin, tasty]

Fancy feast

When I lived in Australia I didn't think very highly of a Buffet - to me they were a cheap way for restaurants to churn customers with substandard food (Sizzler). Made me think of pigs at a trough asking for selmanela poisoning...nice.

Hong Kong, as always, flips Buffet on its head and takes it to a whole new level. All the top hotels produce an amazing variety of buffet choices, and the quality always amazes me (nothing like Sizzler).

I've stumbled upon this great website, Foodeasy, which lists all the latest buffets and specials - perfect for wowing visitors or when your feeling a little greedy (oink oink).

http://www.foodeasy.com/hongkongrestaurant/hotel-buffet.php

TWFT: Kindle

I have bought a Kindle!

What's a Kindle? A Kindle is an electronic book reader - you download books directly from Amazon.com and then store and read them on the Kindle. Its not an ipad, you can't check your email, it's for people who just really love their books. You can type notes, look up unknown words in a dictionary or wikipedia - lots of fun booky stuff.

So how can spending USD$180 be a money saving tip?! To be honest, this post could really just be my way of justifying my purchase (all the other girls in book group have one. And they love theirs...funnily enough I bought mine right after the last book group hehe). Anyway, here's my rationale.

Each book you purchase on the Kindle is about 30% cheaper than buying the physical book. This is probably because the publisher is saving on paper, printing, transport...all those things.

So let's say you read one book per month and each book is USD$20 - you spend $240 per year on books. If you bought those books on a Kindle you would spend only $168, which means you save $72 per year. OK, given I've just bought the Kindle, if we include the purchase cost it'll take me almost 16 months before I'm ahead, but after that I'll save save save!

The financial downside of a Kindle is - you can't borrow someone else's 'book' (which would be free) and you can't sell a read book.

Plus, as the Kindle is hooked up to your credit card the danger to go 'shopping' at Amazon is always there. I've made myself promise - no new book can be bought until the current one is read. Two weeks in and the promise has been kept (ask me in 6 months...).

Fine, so maybe the Kindle isn't the most awesome money saving tip, but you are saving the planet from producing books each year. This alone has to be a HUGE saving of global resources!

image from www.amazon.com

trust and fear

Today's blog is more of a rant. I don't have any immediate solutions for this huge problem but as an industry, financial services really needs to start working on regaining faith and trust.

For research I read a lot of articles on personal finance. One of the things that has struck me recently is how fearful people are, and how the trust for those in the financial planning/institutions has really been decimated. Any blog post about investing will be commented on numerous times by every-day investors frozen by fear. They not only no longer believe the so-call experts, they don't know who to believe and trust.

What to do?! People want to get ahead, to earn more on their hard-earned savings than a bank account can provide...but the fear of losing it all to dodgy advisers/companies is freezing people into inaction.

The past 2 years have really seen the financial services industry fall into a very sorry state of affairs. Maddoff in the US, Storm Financial in Australia, banks falling over in the UK, the share market dropping by insane double digits, financial firms bankrupting left right and centre.

Who is to blame? Greedy financiers out to squeeze every last penny from consumers? Greedy banks for not stress-testing their policies? Regulators for not protecting consumers from shonky operators? Consumers for either being too greedy for high returns or too ignorant of risks? How can we prevent this from happening again?

Prevent is always better than cure and while I think there's no immediate cure to this ill, we should use education to make sure consumers become more financially savvy to prevent being fooled a second time.

Educating kids in school about spending, savings, debt and investment is a great start. Educating adults about what is a realistic return for a level of risk can help check the greed-led decisions. Empowering consumers with financial literacy knowledge will give them the courage to ask questions of those they put their trust in (and dollars with).

I'm loving the work of the Australian Financial Literacy Foundation and their website Understanding Money. The sooner this sort of information becomes a compulsory subject in schools the better.

Financial Planners and Institutions need to step up to the plate - stop biting the hand that feeds you! The focus needs to be less on immediate revenue from ripping off a few consumers, and more on providing transparent advice in a simple to understand language to build long-term relationships with customers. Financial Planning needs to be seen as a professional equal to that of Accounting and Law - by charging fees in the same way (rather than commissions) and demanding tertiary qualifications of its practitioners. Institutions need to be better regulated and more clearly disclose their fees - get rid of the mountains of gobbly-gook in Disclosure Statements!

Sigh. Rant over.

reduce the rent? or fix the ad?

Our property settled on May 26th so time for a tenant. The agent put it up on the web for rent at $510 per week...and we waited...and waited...and waited.

After one week he told us the bad weather in Sydney was affecting the property market and we needed to drop the price to $490. As you can imagine I was totally unimpressed. But I had to take his word for it - isn't he the professional? I'm over here in HK so what would I know about fair rental values? So the price was lowered.

Two weeks later and still no interest and now he's saying to drop it to $460! I exploded. Countless filthy emails were composed (and deleted) along the lines of how can he call himself a professional and then ask us to drop our price by 10% in less than a month?! The rest of the Sydney market was increasing so why weren't we?! What rubbish methodology did he use to come up with $510 in the first place?!!! (Ok,  b r e a t h e )

After calming down I decided to look at the online ad to see if it held any clues. Real Estate websites are paramount in Australia; they're probably the most important property marketing tool.

Imagine my horror when I saw our advert - OMG it was rubbish! Dreadful! Dull, ugly photos and a short non-descriptive blurb that ignores all the key features. And excuse me but what is a LUG?  No wonder people weren't interested. The properties advertised either side of ours had over 200 views each - mine had only TEN in the same time! And my property was the one with the ocean views and it was closest to the beach.

In a fit I rewrote the ad and forwarded my version to him, demanding he replace it immediately (in the nicest possible way, of course). Then I very cheekily quoted the weather report and told him it would be sunny for the next 2 days so he'd better get out and take new pics :)

To his credit he changed the text immediately and one day later we had 45 hits! Vindication!! 400% increase in views (my boy sarcastically pointed this out to the agent haha).

Three days later with both new pics and new text we were up to 75 hits. Ha! Bad weather my butt. More like lazy real estate agent.

This is the sad reality of property ownership - there's no such thing as set and forget.

Lesson learned - lazy agents try to drop the price as a first (easy) measure. Instead, make sure your property is being promoted properly to show off its best features first! It could earn you $$$ more in income.

change

About 12 months ago I started to feel a growing disquiet within...something just wasn't right and I didn't feel completely satisfied with my role (financial planner). This came about for a number of reasons but one in particular was the role's lack of creativity. Trying to speak to my manager about not liking my job in the midst of a global recession seemed like career suicide so I kept it under my hat for a while. Instead, my focus was trying to work out what it was I really wanted to do and what it would take to get there.

Straight out of high school I'd originally studied journalism, and then dabbled in marketing for about 4 years. This was where I felt my heart was wanting to go. There's definitely scope to combine marketing and financial planning, it was just a matter of convincing the boss. The first few conversations didn't go so well. She couldn't understand why anyone would want to change roles when they were doing well in the one they had. Lucky for me the existing marketing person's interest in her role soon expired and a vacancy was created.

So now I've started my new journey in finance marketing/corporate relations. This role comes with management responsibilities so I'm re-learning all those skills too. In the past my previous staff were all a good 10 years younger than me. This time its a whole different kettle of fish with one being about 15 years older and the other the same age.

Given my expanding interests I'm going to expand the themes in my blog...I guess I'm using this as  a personal scrapbook of-sorts to dump great ideas that I've come across in areas of marketing, HR and finance too. Even if no one besides me ever reads this, at least I can use it as my own reference tool :)

Here's to new challenges and opportunities.

joint bank accounts

I was having a chat with a girlfriend this week about joint v separate bank accounts for couples.

She and her hubby only have the one joint account where both their salaries are paid into. From here they pay all their bills, holidays etc.

While I am strongly in favour of joint accounts, I think you also need a separate account each person - purely for 'ME' stuff.

My friend, let's call her Alice, felt that having separate accounts was a headache - more accounts to remember and possibly get mixed up. But I disagree - only one account can be messier if someone overspends (which happens more often than you think).

I'm going to write a longer post on how the boy and I sort our accounts, but for now here are some interesting links on the subject:

• Should couples have joint bank accounts? / The Times online
• Joint or separate checking accounts? / About.com
• The joint bank account / NZgirl
• The 6 financial mistakes couples make / SmartMoney

Market update

Wow, the volatility in global markets continues...




In summary:

~ AVOID long-term government bonds
~ Now's a good time to buy in to quality assets when their price is down BUT short the Euro (meaning = expect the Euro currency to continue to fall)

Money tool for Americans

I've stumbled across this great website which tracks your ACTUAL spending by getting direct data from your bank accounts.

Looks like it's only relevant for American residents though, which is a shame.

Definitely worth a look if you want to see what you really spend, rather than what you think you spend. Plus they lots of interesting articles and links on personal finance.

http://www.mint.com/

TWFT: Argh! Lost Wallet!!

Hmmm this week's finance tip is a very practical one, with lessons learnt first-hand.

My boyfriend staggered home at 3am this morning after celebrating his new promotion, only to arrive by taxi at our building and discover he'd lost his wallet.

I awoke to his distraught phone call from the taxi, threw on a robe and trotted downstairs to pay the worried taxi driver.

The next 30 minutes were spent on the phone helping him cancel his credit cards and Octopus card (HK travel card - like the UK Oyster). Let's just say he wasn't very sober and needed help pressing the phone buttons...which explains how he lost his wallet!

What did I learn from this? Keep a list of your important finance details on hand for emergencies.

Something that has:
~ Account numbers
~ Emergency phone numbers (i.e. for lost cards)
~ Your ID numbers (i.e. passport, HK ID card)

Just the basics, nothing extensive.

And another tip - don't keep ALL of your credit cards in your wallet. If you don't use all of them all the time, keep one home for emergencies like this!

Hope you had a better week than this.

Protection and Prevention for redundancies

As an expat, there are simply so many things to spend money on. It's only too easy to live hand-to-mouth from month to month. As the wages come in, they quickly go out on holidays, outings, experiences, shopping.

But one thing you might have noticed during the GFC is how vulnerable the expat employee market is to an economic downturn. When things started getting nasty in the  financial markets, companies needed to cut costs in order to stay afloat. And not just small belt tightening, I'm talking about limb-removing cuts here. Entire departments losing 20% of staff, all foreign travel suspended...no free fruit in the kitchen.

As expats, we can be a little more expensive than a local hire in many cases. We can demand housing allowances, children's education allowances, drivers, helpers (maid), blackberries, corporate credit card. The list of perks can go on...together with the incentive to sack expensive expats first during a crunch.

So what can we, as an expat, do to protect ourselves from this situation. Other than working hard, being innovative etc (which are covered off in a million other blogs), we should consider:

1. Emergency expense reserve
Set aside 3 - 6 months of expenses in cash or liquid assets (i.e. money market) for easy access should your source of income dry up. The cash reserve will allow you to pay your bills, while looking for a new job, and save you from having to liquidate your investments in order to eat.

2. Stand alone insurance policy
Your employer will, in many cases, provide you with some level of insurance cover. And in many cases, this insurance will cease when your last day at the company ticks over. This will leave you without insurance cover, and could be very stressful. Look into the costs of having a basic stand-alone insurance policy, so that you have emergency cover should you lose your job.

3. Stress test
Having a monthly budget is great while you have a job to keep track of expenses etc and exactly what you are spending. Now take this budget...and zero out your income. What impact does this have on your cashflow and long term financial goals? Use this opportunity to work out where you can make some savings in your budget to see you through. And use this to work out how long your savings will last in a worst-case scenario. Scared? Think you won't make it? Great - use that knowledge and fear to give you the kick you needed to start saving more!

TWFT: CGT issues for expat's buying Hong Kong property

Each week (or thereabouts) I'm going to post the most interesting piece of financial advice I've come across for expats during the past 7 days.

To kick it off, my inaugural expat finance tip is regarding Hong Kong property and capital gains tax.

It's true that one of the many expat-friendly tax rules in Hong Kong is that there's no CGT on the sale of property. And given its not uncommon for HK property to rise 30% in one year, that's a massive tax saving and a bulging purse!

But one thing to note as expat - when you return home, if you still own the HK property and decide to sell...uh oh...you could be stung with CGT! So for those Aussies and Brits who land back in Sydney or London, with their Mid-levels property still in the portfolio - sorry, but you'll now be taxed at your marginal rate on any gain made since the day you resumed tax residency.

E.G.

I'm an Aussie expat living in HK. In 2000 I purchase a HK property for HKD$6,500,000. In 2008 I return to Sydney, at which time my property is worth HKD$8,000,000. The value on my day of repatriation is the new Cost Base for Australian tax purposes. 

In 2010 my property is worth HKD$10,000,000 and I decide to sell it; my capital gain is HKD$10m - HKD$8m = HKD$2m. This is converted to AUD and included as taxable income in my Aussie tax return. Ouch!

Some ways I could manage this:

~ Sell the HK property before I return to Australia

~ If I sell the property when back in Australia, 

a. sell in a year I'm not earning anything (or low earnings) so on a lower tax bracket

b. make a concessional super contribution and claim a tax deduction (maximum is either AUD25k or AUD50k depending on my age AND can only make a concessional contribution if self-employed or satisfying the 10% rule)

c. offset the gain with any other losses I've accumulated

~ Don't sell!

It's potentially a tricky situation so think ahead before returning home.

Saving money on makeup

Just to mix it up a little - here's a video from MakeupByTiffanyD. Tips for saving money on makeup/great cheap products.

Using the fine print to your advantage

More about buying a property...

While in the negotiation stage for buying the property, we received a copy of the Contract of Sale. Going through the detail with a fine-tooth comb we stumbled upon:
1. The Vendor and their agent had the same surname (and an unusual one at that)
2. There was a caveat on the property from a finance company
3. A clause to release our deposit monies immediately to the Vendor for their use

What's so interesting about that?
Well, the same surname indicated the Vendor and their agent might be related - giving the agent either extra motivation to get a high price OR extra motivation to get rid of the property quickly. And the caveat indicated the Vendor had a second mortgage on the property - meaning they were under pressure to sell to repay this second mortgage. The deposit clause indicated the Vendor needed our money asap to repay debt or purchase another property.

As it turned out, we were spot on with 1 and 2 and sort of right with 3. Having a chat with our Buyer's Advocate, they went in to the negotiation offering an even lower amount than we had originally planned to offer (now AUD50k less than the asking price), but being completely flexible with settlement date. We also got clause 3 removed - our solicitor said this was too dangerous to remain as the Vendor can take your money and run.

And surprise surprise - our first offer was accepted. The Vendor was under financial pressure but also needed to purchase a new home to live in. They took the flexible settlement a step further and made it 6 - 14 weeks so they can have simultaneous settlement when they find their replacement property. To be honest, not having a concrete settlement date is really unusual and a little tricky to manage, so our solicitor and mortgage broker are aiming to have everything ready by the 6 week mark (if we have to delay settlement it costs us an extra 7% of the purchase price - yuk).

Now it's a waiting game to see when settlement occurs.

Buying a house in Australia when you live in Hong Kong

 

http://www.freefoto.com/preview/33-06-29?ffid=33-06-29&k=Brick+Texture

After 18 months of Hong Kong's low taxes (15% compared to Oz 45%) the boy and I were able to save enough to purchase our first investment property back home. Buying a property from overseas is a whole different kettle of fish - you can't just do a drive-by inspection on your way home from work or go to the open-home on the weekend. Plus, you're now dealing in at least 2 currencies which can be confusing as well as expensive (exchange rates + bank transfer fees). There's so much to think about. No one really tells you how to do this so it's a little trial-by-error.

We haven't settled yet but I'm going to do a series of posts to cover the different issues we've faced or lessons we've learnt.

~ Firstly, think about how you are going to FIND the property. You've got a couple of options:
a. Spend every spare minute you have on real estate websites (www.realestate.com.au)
b. Get family members back home to check the options for you
c. Fly back to your home country for hunting missions
d. Pay a Buyers Advocate to find one for you

To be honest, we are pretty protective of our spare time and also wanted to buy in a different state to our family, so a and b weren't options. Option c was too expensive so we went with d. Yes, it cost us AUD15,000 to have someone find our property BUT, unlike our house-hunting friends, we didn't spend every weekend for 4 months driving around the countryside looking at properties. Plus, for Australian investment properties you can add these fees to the Cost Base of the property (which helps save a little tax if you eventually sell).

During the 3 months it took our Buyers Agent to find our property, we had 2 friend's weddings, 2 house visitors and a ski holiday - when would we have had the time to look for ourselves? Like everything, its that battle between money and time - which is more important to you. Ultimately, I'm happy we paid a professional to use their knowledge and experience to find our property, I would have got too emotional about it. Back to his fee - given he was able to negotiate almost AUD$50k off the asking price we figure we're still in front after paying him.

The time between when we met the BA and when they contacted us to say they'd found something felt like ages. And then it felt like they were rushing us when they called to say they'd found something and we had to move quickly. A little more follow up in the meantime would have made us feel more comfortable...but they definitely made up for it once we'd committed and they held our hands every step from there. So big tip - if you've made the committment to engage a BA, have EVERYTHING ready so you can go at the drop of a hat. This includes:
~ enough cash in an account for the deposit (preferably in the correct currency)
~ the ability to write a cheque in the purchasing currency

Next post - Use the fine print to your advantage...

Its the big things

How many times do you read savings advice columns that simply say to cut out the Starbucks and takeaway lunches? These two always seem to make it to the top of every list but to me they're getting a bit stale. While I'm not saying these aren't good ideas, that can save around a thousand dollars a year, they do seem to suck the fun out of life a little!

Another idea is to focus on the big ways you can save money instead.

One area is travel. For example, my boyfriend and I attended a wedding in New Zealand over Easter. Given I was a bridesmaid we knew the date months in advance. And given the wedding was over Easter, flights were  no doubt going to be expensive. So I booked our flights in October last year. One week before we flew I double checked to see how much these flights now cost - and they were HKD4,000 more expensive! By booking 6 months in advance I saved over USD500.

Another area is big ticket items for your home. Checking websites like ebay, craigslist and Asia Expat in many cases you'll find exactly what you need for huge discounts - even free. It also doesn't hurt to ask around - if someone is thinking of gettting rid of the exact item you need, they'll usually give you a great price for saving them the time and energy of trying to sell it. When we moved to Hong Kong we purchased all our furniture from one of my boyfriend's colleagues who was moving into a smaller apartment. We saved thousands buying his furniture, not to mention saving hours trawling through the shops and more money again on delivery.

Clothing is another area to save big. The obvious thing to do is of course shop during the sales. But for special occassion dresses, sometimes you can't wait. While already popular in many other cities, new to Hong Kong is the idea of buying second hand gowns online. Designer Gowns HK buys and sells preloved designer dresses, shoes and accessories. And once you've worn your fabulous frock to the ball, you can resell it again so you never have to wear the same thing twice. Or if you'd prefer to see the dress in person, try the Pedder Building in Central HK.

The same goes for designer handbags. Not everyone wants a knock-off Chanel from the markets, sometimes you want the quality of workmanship of the real thing, without the moral dilema of buying fakes. Websites like tradeit.com.hk and shops like Milan Station sell second hand designer bags for 30 to 50% off the original price.

Just these 4 ideas alone will save you thousands each year - and you can probably keep having your Starbucks!

 

image: http://www.freefoto.com/preview/09-16-58?ffid=09-16-58