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How aggressively do you save?

A resource forum for those interested in buying, selling, or developing a business; for questions about retirement plans; investing and basically any aspect of acquiring, keeping and increasing one's personal stash of filthy lucre.

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Re: How aggressively do you save?

Postby dnwolfgang » 17 Feb 2011, 10:14

Gao Bohan wrote:
dnwolfgang wrote:Could be any of number of reasons. Could have been the 1 big vacation every 2 or 3 years (1 long trip is cheaper than 2 short ones because you reduce plane ticket costs!), they could be living on an expat package, they could have their parents partially pay for it, they could spend a big portion of their income on vacations, or maybe they just make a little bit more than you... Think about this, if somebody makes $5,000 US more than you per year, that's an entire extravagant vacation they can afford EVERY YEAR and still live like you. It's really not that hard to imagine to be honest. These numbers look big if you look at them in 1 big chunk, but if you average it out over a year or two it's not as insane as some people like to think it is.


Did you read my posts? :ponder: I calculated the savings that need to be accumulated within a year to make a single trip in the same year, based on average earnings reported by numerous posters. Again, I am assuming a foreign teacher's salary for single income families and the addition of the average Taiwanese worker's salary for dual income families. It would take a very aggressive saving program, saving 50% of gross (>50% net) for 5-8 months to make a single trip. Your other points are well taken. An IP lawyer or highly specialized engineer at a multinational making $150,000-$200,000 USD doesn't care if he drops $7000 USD on a trip back home. Or anyone on an expat package that includes airfare back home or wherever. But most posters here are either English teachers, editors, or technical writers, and it's their stated salaries on which I'm making my assumptions. And many of these good folks lament their lack of savings. In any event, I personally find it helpful to look at the numbers, so I thought I'd share in case others do as well.


I did read your posts but I think you can see by the math that a family of 4 on a teacher's salary are not taking extravagant yearly trips. I think you're taking a bunch of pieces and putting them together wrongly and arriving at some false conclusions. It's like thinking "Everybody else has had more sex than me". My point is that, while the family on 4 on 55NT/mo is not, what if they both work and 1 is an engineer with some experience, now you have 55+75 = 130K NT$/mo and THAT family can take a nice vacation every once in a while. In my case, my wife and I are both engineers and no kids, even more money to play with for vacations.
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Re: How aggressively do you save?

Postby headhonchoII » 17 Feb 2011, 11:44

What's the best way to save as an English teacher....? Answer: Not teach English and do something else.
What's the best way to make more money for most (not all) workers in Taiwan...? Answer: Move somewhere else.
What's the best way to save money as a family....? Answer: Don't have a family.

I'm not being serious here (GIT you included) but there is a kernel of truth in all of this.

Taiwan is a good place to save but not to earn. So if you can really earn then you can really save!
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Re: How aggressively do you save?

Postby llary » 17 Feb 2011, 20:44

Mother Theresa wrote: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


My wife is constantly bugging me to buy insurance for our infant son but even she can't explain why that would be useful. I said if she really wants to buy insurance, at least insure our family's source of income (e.g. me).

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.


I think there is some misunderstanding here. I don't get how any company could afford to take $12,000 then guarantee you $400/month for the remainder of your daughter's life.

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.


3% per year or 3% over the policy lifetime?

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.


I love my wife and I know she always means best for us but her grasp on financial mathematics is dubious. This is probably the only area of our lives where I insist on taking control. We never really argue about it because my wife knows if she brings this up I will make her look at spreadsheets for the next 2 hours.

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 doubt they are offering 3% per annum, it doesn't make sense.

I generally don't believe in the value of insurance but I have a compromise with our wife that keeps us both happy. I invest some money each month in mirror funds linked to a life assured policy. Hardcore investors look on mirror funds with an air of disgust but for us I think it's reasonable value. The annual fees are about the same as any managed portfolio and returns have been good but with the added benefit of life insurance.
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Re: How aggressively do you save?

Postby Icon » 17 Feb 2011, 22:21

GuyInTaiwan wrote:Gao Bohan: Most of the campsites had hot showers in Iceland. Most of them have staffed huts that you can stay in as well in case the weather gets really bad (and they can have snap blizzards even in mid-summer) and campers need to take shelter. We only encountered one campsite that didn't have such things. Honestly though, camping was the only way we could have done it. Anything that caters to foreigners is expensive there, including basic guesthouses. Anything that caters to locals (including camping) isn't as expensive (and their currency had halved in value while we were there -- which is why there were so many people there when we went there). Our main expenses there were camp sites, buses, and food. All of those things had remained relatively stable in price, but were effectively half as cheap. Everything else, such as tours and tourist accomodation had basically doubled in price to make up for the halving of the currency.

As for Southeast Asia, where there were hot showers, we had them. You can find places for $5-$10 in most of the major cities there where you can get a basic, but decent room (though we often only had a fan, rather than air-conditioning).


Gosh, that's a really good deal. One of the reasons I hate going home is that basically I am limited by the costs, as my homeland is a tourist trap, aka "paradise". Any semidecent place starts at 100 USD or more, mountain or beachfront. Restaurants are pricey, too. Taxis are almost nonexistent and what they charge is outrageous, in spite of being beat up tin cans. Chicken buses... don't get me started. In summary, as a local, I am strapped as to where my father can drive me, if he has time. I am already dreading getting up at 5am so my brother can drive me to the city when he goes to college every day at 6am to avoid traffic...
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Re: How aggressively do you save?

Postby RobinTaiwan » 17 Feb 2011, 22:29

This is life right here right now. Make sure you enjoy it.
Words to go by, Mother Theresa. :thumbsup:

I don't spend much of my time making a budget or working on saving schemes. The stock market is a foreign language to me, and so are all the other investment plans. I used my money to buy two houses since I moved to Taiwan. The rest just goes in the bank. The first mortgage will be paid off in 2015. In the next few years, we'll be looking into investing in a third place. Our first house is rented out and it's paying for itself most of the time. I like to call it making money, rather than just saving. My tenants are more or less buying me a house (They also trash it, but that's another story...).

With this, we also have an extensive insurance policy covering the whole family from head to toe. That's our saving plan, in a nutshell. It's not very complex, but I think it should be enough to secure a decent retirement for us and a small legacy for the boy.
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Re: How aggressively do you save?

Postby Gao Bohan » 17 Feb 2011, 23:44

dnwolfgang wrote:I think you're taking a bunch of pieces and putting them together wrongly and arriving at some false conclusions.


Oh nonsense. I clearly stated my assumptions up front. Since you're an engineer, you should understand that any model, whether its technical or financial, necessarily simplifies real world conditions. My conclusions are accurate, based on the stated inputs. I'm not particularly interested that you don't find my statements useful to your situation. You haven't demonstrated any flaw in my reasoning, and so your claim that my conclusions are false is unsubstantiated.

My point is that, while the family on 4 on 55NT/mo is not, what if they both work and 1 is an engineer with some experience, now you have 55+75 = 130K NT$/mo and THAT family can take a nice vacation every once in a while.


In other words, with a different set of inputs, the result changes. I see little relevance to your "point". In any case, feel free to keep beating the dead horse, I won't be joining you any longer.
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Re: How aggressively do you save?

Postby Gao Bohan » 18 Feb 2011, 01:07

RobinTaiwan wrote:I don't spend much of my time making a budget or working on saving schemes.


I'm also not a fan of adding unnecessary complexity to budgeting and saving. At least in the US, it's easy to set up automatic bill payments, 401k/pension plan contributions, and savings. There's a lot of Dave Ramses fans who refuse to do that, however. They have an envelope for every conceivable expense, and place the exact same amount of cash inside each envelope every month, going so far as to hand deliver their payments rather than use checks whenever possible. They carry no credit cards, some not even debit cards. I see little value in this. Automatic bill payments and savings forces a budget. If there's money left in the checking account after all the bills and savings goals have been met, then the family can increase their savings goals. If they find themselves dipping into savings each month to pay the bills, then either scale down expenses or savings goals. It's all fairly simple.
Our most basic common link is that we all inhabit this planet. We all breathe the same air. We all cherish our children's future. And we are all mortal. - John F. Kennedy
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Re: How aggressively do you save?

Postby GuyInTaiwan » 18 Feb 2011, 08:02

Icon: The more touristy places in Southeast Asia are a bit of a rip-off also. They've definitely got into bleeding foreigners. The thing is that most foreigners are willing to pay though. For this reason, I actually didn't like most of Southeast Asia.

Also, I've always wondered: where are you from?
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Re: How aggressively do you save?

Postby citizen k » 18 Feb 2011, 11:59

llary wrote:I think there is some misunderstanding here. I don't get how any company could afford to take $12,000 then guarantee you $400/month for the remainder of your daughter's life.


Sounds a little too good to be true to me, as well. I've heard of a lot of full life policies that will essentially pay you back most of what you have invested at a period in the future as a "pension" while including different types of life and other insurances. But a payment term of 6yrs and then getting $400/month for the remainder of your daughter's life? Even if she was 18 by the time that kicked in, they would be looking at a possible 60-65 years of paying that $400/month...doesn't make sense. If it is true, jump on it and send us the agent info. :)
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Re: How aggressively do you save?

Postby headhonchoII » 18 Feb 2011, 15:00

6 years doesn't sound right , 10-20 years would be more like it. Years ago the deals were better as they competed with high interest savings accounts, you can't such get good deals now.
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