Australians check in?

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bluepearl
Posts: 80
Joined: Sat Sep 10, 2011 6:54 pm

Post by bluepearl »

@stark @lonermatt
Thanks for the info on australian banks. I plan to diversify into AUD soon. Not now, as right now it feels like a repeat of 2008 so USD will strengthen for months... (both AUD and CAD lost their parity this month, for example).
But once AUD goes down some more, I will move to AUD as a proxy hedge to CAD (I work in the states now, so drawing USD income but I have CAD expenses and I plan to retire in Canada). What frustrated me in the last few years was the super low CAD interest rate (I am so jealous about 6-7% interest rates you guys are getting). The Bank of Canada keeps interest rate low on purpose as the geog proximity means that Canadian economy is very much influenced by the US.
On other currencies to diversify to, I actually think USD is a good short term move (flight to safety in a repeat 2008 scenario), and then gold is a good long term move. All currencies are managed and it looks like everyone wants to devaluate. Personally I wouldn't touch explicitly managed currencies meaning CNY and CHF (sadly).
On gold, in a repeat 2008 scenario it could drop by 30%, but since we don't know if it would drop this much or perhaps it would drop more, an average down approach is what I would suggest. Also remember, in a repeat 2008 scenario USD would go up, meaning there are two force at work (gold drop, good, but aud drop meaning gold price goes up in aud terms)... I am facing that exact scenario right now since I want to convert some CAD into gold...
Oh I have never been to Australia. I learn most of my cooking from a chinese-australian homemaker/ blogger and it's through her that I develop a fondness for australia. Hehehe...


LonerMatt
Posts: 239
Joined: Tue Sep 20, 2011 3:49 am

Post by LonerMatt »

Bluepearl: For whatever reason, whenever I have looked at the AUD/CAD they seem to buy comparable levels of USD. That's just a small observation, but it's been a decent rough guide for me. In other words, more often than not, the AUD and CAD are close to parity (within 5 cents). At least, that's been my observation over the past 5 years (which doesn't mean much).
Correct me if I'm wrong, but are you saying that managed currencies (more specifically the Swiss Franc) are moving to devalue? Why might they do that?
Since we can buy gold mined in Australia, from Australia, it's difficult for me to know how the gold price dropping when the USD rising would effect things, especially because depending on Australian confidence/strength, the drops might not be parallel (gold could drop by 30%, but I doubt the AUD will drop to 70 cents! The AUD just doesn't move that fast, IME).
Surely there's a way to have your cake and eat it too: for example if the real value of CAD drops, and gold drops, why not buy gold in USD (which would be have better purchasing power)?
Most of my questions aren't suggestions, I'm very new to this, so I'm just thinking out loud, feel free to show/explain how wrong I am :).


Surio
Posts: 602
Joined: Sat Dec 25, 2010 11:58 am
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Post by Surio »

@LonerMAtt,
A quick hello and the link to blog:
http://sawbonessurio.wordpress.com (It is on my profile too).
Got to rush right now. More later.


Surio
Posts: 602
Joined: Sat Dec 25, 2010 11:58 am
Contact:

Post by Surio »

@ADD/LonerMatt,

"I remember reading somewhere that you need to be a non resident Indian to legally invest in Indian bonds."
You got that one right:

"Under the FEMA Regulations, only NRIs and SEBI registered FIIs are permitted to purchase Government Securities/Treasury bills and Corporate debt."
That one sucks! Big time! I've never figured that one out!
These are the only bonds around at this time:
https://www.sbicapsec.com/Bonds.aspx
With the currency volatility we are facing, 8% over a 10 year period looks like a loooong time away!


bluepearl
Posts: 80
Joined: Sat Sep 10, 2011 6:54 pm

Post by bluepearl »

@Lonermatt:

For CHF, check out the CHF-EUR exchange rate on Sep 6 and thereafter. I saw a 8% drop in two days!
<http://www.zerohedge.com/news/guest-pos ... ate-effect>
While CHF was one of the few last standing safe haven currencies, the swiss national bank decided to peg it to EUR...devaluating it significantly in a short period of time.
Basically I think this means no currencies are safe and that all central banks can technically take this kind of stance...
For AUD vs USD vs Gold

http://www.kitco.com/gold_currency/charts.htm?AUD

(select the 5 year graph)

you can see that during the 2008-2009 crisis the AUD line goes above USD - it's more expensive to buy gold in aud just during that short period. In all other periods, since AUD was stronger you are in a good position (just compared to holding USD at a minimum)
I actually like talking FX with people. Since I work with Americans who are clueless about FX. I am thinking that I'm making a bunch of assumptions that won't necessarily materialize - such as us being in a repeat of 2008 and our respective currencies will move in the exact same manner in late 2008/ early 2009. I want to hear your views too thanks!


gawping
Posts: 28
Joined: Wed Sep 07, 2011 3:08 pm

Post by gawping »

hi
another aussie here. not on topic per se, but I realised during the week that about 10% of what i spend ends up going to the government. Since i'm not a fan of forfeiting money to the govt, this serves as great motivation not to buy stuff. Also, in Oz unprocessed goods dont attract the GST so one way of knowing you've got a good diet is if you don't pay much/any GST...


LonerMatt
Posts: 239
Joined: Tue Sep 20, 2011 3:49 am

Post by LonerMatt »

I've got to start my journal next year. I'm currently in transition, but hopefully the Australian regulars will check in.
I'm moving to a more ERE friendly area (Mildura, VIC), so we'll see how that goes, and I'll try a few different investment vehicles.


LonerMatt
Posts: 239
Joined: Tue Sep 20, 2011 3:49 am

Post by LonerMatt »

Also, broadly what I've been thinking about, with regards to an Australian PP is:
25% Gold - Perth Mint, easy, plus maybe some non-physical gold, too.

25% shares - I'd probably begin just with ASX 200/500, then expand to, say, some US/Asian shares.

25% cash - Either term deposits, or the 6.5%+ bank accounts (several paying 7% at the moment). Later buying some UDS/Yuan/CHF.

25% bonds - since we don't have 30 years, I'd try to get some around 10-15 years.
The bonds part is still confusing me a bit, it seems to lock me into below average returns (although they are more stable), if I buy a bond, does its price ever rise, or is the 'rise' more a lack of fall in a market downturn??


cgreg2000
Posts: 4
Joined: Sat Oct 29, 2011 12:29 am

Post by cgreg2000 »

Hello everyone from oz, I'm still new to the blog, and haven't been able to stop reading since I discovered it a week ago. I have always been frugal because of wanting to be FI as soon as possible, but have no idea at all about investing in shares. Some idea regarding real estate, but even there, not at all enough. I'll be reading your posts and hopefully will be able to educate myself more. Good day to all!


chilly
Posts: 274
Joined: Thu Dec 23, 2010 6:03 am

Post by chilly »

So to turn the tables a bit... any tips for us yanks to get in on the 6.5% bank returns?


graynomad
Posts: 54
Joined: Fri Oct 28, 2011 3:42 pm
Contact:

Post by graynomad »

I can't help with the investing side of things, partly because I don't really have to invest and partly because whatever I've done over the years has turned to crap :)
Despite that I retired at 45 and hit the road two years later. That was 10 years ago now and as they say, I started with nothing and still have most of it left.
We owned 3 houses, sold them and gave the bank a fair swag of the proceeds. Since then I've worked for 6 months plus made small amounts writing articles an selling the odd photo.
We have a great life and live on bugger-all, most of our time is spent lazing near a river somewhere photographing birds, tweaking my website or designing electronic gadgets. All those hobbies are essentially free.
ERE does work, I did the settle down and get a job thing for roughly 20 years, about 25 less than most people but 10 more than I should have.
If you want to have a sticky beak at the lifestyle have look at
www.robgray.com
We're in WA at present but heading back east, plan to be Canberra way in the new year then back up on our land near Bundaberg after that.


LonerMatt
Posts: 239
Joined: Tue Sep 20, 2011 3:49 am

Post by LonerMatt »

Chilly - Ubank, Bankwest and Westpac are all worth a look. AFAIK you don't have to be an Australian citizen to get those returns, just desposit some every month.
Otherwise returns are a mere 6%!
Ubank is who I am with, but Westpac has had a long and successful history, I don't know much about BankWest.
http://www.ubank.com.au/ub/web/home


LonerMatt
Posts: 239
Joined: Tue Sep 20, 2011 3:49 am

Post by LonerMatt »

Ah, just checked, for UBank applicants need an Australian residential address!


Surio
Posts: 602
Joined: Sat Dec 25, 2010 11:58 am
Contact:

Post by Surio »

@GrayNomad,

*Japanese Bow* and *Applause* Naaaah!



I am going to go all ethnic and give you the *Indian BOW*! Now if you were wondering what that is, then here's a picture of the bow


(And it is the same in Buddhism and Christianity too ;-))
What a life you have been leading! And your lifestyle, and your life experiences! And the skills you've picked up! And of course, your truck is a marvel!
Impressed! Truly impressed!
Surio!


graynomad
Posts: 54
Joined: Fri Oct 28, 2011 3:42 pm
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Post by graynomad »

Thanks Surio, no need to bow though, just throw money :)
It's certainly been a good run so far, a few downs but mostly ups.
This sort of lifestyle is pretty easy to achieve in OZ, we just seem to have the right combination of political stability, land area, climate etc to make it work.
Plus we have pensions and health plans provided by the government, there are arguments about the wisdom of not having private health insurance but at least there is a system in place for those that don't. And anecdotal information suggests that sometimes you're better of without insurance.


DutchGirl
Posts: 1646
Joined: Tue Sep 06, 2011 1:49 pm
Location: The Netherlands

Post by DutchGirl »

Yes, sometimes you are better of without healthcare, too.
Anyway, now that I'm reading this: I also read through your diaries this morning and loved it. I wish you many more happy travels and I'll drop by now and then to enjoy the stories and pictures :-)


graynomad
Posts: 54
Joined: Fri Oct 28, 2011 3:42 pm
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Post by graynomad »

@DutchGirl, thanks for your comments, hopefully you'll find something interesting each time you drop in.


gawping
Posts: 28
Joined: Wed Sep 07, 2011 3:08 pm

Post by gawping »

Anybody ever tried to buy/bought Australian Treasuries? There's a bit of info on the RBA website.
Another question - Is it "possible" to live on under $6K AUD in Australia? I have my doubts but I guess it depends on where you live etc. It's an exciting prospect nonetheless.


graynomad
Posts: 54
Joined: Fri Oct 28, 2011 3:42 pm
Contact:

Post by graynomad »

>Is it "possible" to live on under $6K AUD in Australia?
I think it is IF you own land or a house or a motorhome. In other words somewhere to live that doesn't cost much/anything.
A year or so back I calculated that my wife could live on $2500 I think it was. I was dumbfounded and I still can't believe it so must revisit the figures one day.
But certainly $6k should be doable as long as you have a pastime that doesn't cost, like bushwalking.


graynomad
Posts: 54
Joined: Fri Oct 28, 2011 3:42 pm
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Post by graynomad »

Update:
I said I couldn't believe that amount and I don't know where it came from. So I quickly redid the figures.
Now bear this is for my missus to live on our land in the motorhome, but the motorhome is just used as a house, it's never driven (no rego) and not insured. She eats like a sparrow and is happy just walking around the bush, looking at the birds and reading. All of which cost nothing.
Once a month she'll drive into town (car fuel and rego included) to buy food.
The new figure is $4300.
Now that's still pretty cheap, but here's the kicker. The ONLY real difference between 1 person and 2 people is food. Add my food and the total is $7300.
That's $3650 each a year.
In Australia the single pension is about $14000 and married around $24000 and everybody moans about it. What the hell is their problem?
I admit that if you're elderly and have to rent in a town and/or get lots of medicine that makes a HUGE difference. But as long as you're fit it's very easy to live on bugger all.


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