Gao Bohan wrote:dnwolfgang wrote:$1200 is only 100NT/day, figure out a way to save 100NT/day and you have your plane ticket.
OK, let's think about that. A typical family of four will pay $1200 x 4 = $4800 USD on airfare alone. At the current rate of conversion, that's 141,645.47 NTD. With a single income of 55,000 NTD (which seems about average), that's 2.5 months of gross salary for an English teacher. And then, it appears common for people here to visit multiple states or provinces, at least within North America. Depending on how many areas are visited, and on whether the family can avoid hotels by staying with friends and relatives, tack on another $1000-$3000 in domestic airfare/car rental/gas/breakfast/lunch/dinner/gifts (both to and from home)/etc. for a two or three week period. So we're looking at what, about $6,800 USD/~200,000 NTD for a typical family? That's close to 4 months gross salary. So an aggressive saver who can put aside 50% of gross salary (>50% of net salary) will save for 8 months to go on a two or three week vacation back to North America.
You're right about the first part, Gao. I took my wife and daughter on our biggest CNY trip ever this year: 2 weeks, with stops in three cities in the US, amusement parks, skiing, factory outlet shopping, rental car for 5 days, etc. Total cost: just shy of US$10,000. Yes, that takes a huge chunk out of our savings, but we only visit the US once or twice a year and it's not a luxury, its a necessity.
But, I believe you said NTD200,000 is 4 months gross salary for a typical family of four. God, I hope not. Maybe typical Taiwanese family with no college education, but I would hope most educated foreigners with a spouse and two kids are responsible/motivated/capable enough to earn more than NTD50K per month. Still, you've got a valid point: big fancy vacations make a huge dent in any savings plan.
GuyInTaiwan wrote:Icon wrote:Insurance and retirement funds will have to take care of the far future.
How do you propose for that to happen?
That reminds me of a couple things.
My wife was just telling me she wants to pay US$2,000 per year for an insurance policy, of sorts, offered by a Taiwanese company, on my daughter. One pays that sum for six years only (total of US$12,000) and after the six years the company will start paying back US$400/month for the life of my daughter, at which time they pay back the US$12,000. My wife figured we can use that as a (small) pension plan for me, in addition to everything else we're doing. I think she said it works out to about 3% interest.
My immediate reaction: that's stupid. Anyone who knows anything knows that term life insurance is good (just pays benefit when you croak) and whole life insurance (which also pays pension benefits) is a ripoff. That's lesson #1 about life insurance. Common knowlege (though maybe not in Taiwan, in particular if one's spouse has a sister who sells insurance).
But of course there's the marital harmony thing: don't reject your wife's idea (particularly when she's Taiwanese and the idea originated in discussions with her family in Chinese) unless you are extremely strongly opposed to the idea.
And there's logic. If her whole life insurance scheme really does pay 3% for the life of my daughter, then I guess it only makes sense to reject it if I'm confident I can outperform that. A decade ago I would have been certain I could outperform that every single year, no problem. But these days. . . hell, a guaranteed 3% doesn't sound so bad, especially when we're only talking contributing US$12,000 over 6 years, not $100,000.
I'm also reminded of what I just read in this great biography I'm reading of Warren Buffett. Apparently, Buffett hated the idea of getting insurance, because he was certain (correctly so) that he could take the money he would pay in premiums and easily earn a far superior return on his own (which is what he did). But, of course, Buffett is a genius. His genius isn't/wasn't just in holding for long term. He works extremely hard performing his research and is/was a genius at picking the right investments, something us mere mortals (me especially) are far less capable of.
So, for Buffett a 3% return on an insurance policy would be pure stupidity. For me, as one small part of my portfolio, perhaps it may not be so stupid after all, particularly if one figures in the marital harmony factor.