Emigration myths & vitriol
Filed under: Getting to New Zealand, Hubby's Views, Jobs & Work, Life in New Zealand, NZIS & Immigration issues
I have to admit that I once voted for Winston Peters. Party vote only, during the 2005 election. I thought he was a good chap to keep in Parliament, in opposition to keep biting at the Govt. and being a bit of a useful trouble maker. In what can only be described as an outstanding political move, Helen Clark made him foreign minister, and silenced him completely. Kudos to Ms Clark. That’s old news though.
Only how he’s out of a job, and trying to get back in. Making ridiculous claims about emmigration that would have anyone purporting to give immigration advice heading to prison for seven years. And since he’s not an MP, he isn’t exempt anymore. Hmm, I wonder if the IAA are listening? Perhaps there’s a cell spare next to Phillip Field?
Kiwiblog has a lot of interesting comments on this. Although since I don’t really do short, I thought I’d be better writing my thoughts up here.
So to be fair, did Winston Peters say anything I could agree with? Well yes;
“We know that the Immigration Service is possibly the most incompetent and dysfunctional government agency of all“
That’s it though.
So what’s he said that’s got me so irrked?
‘When it comes to immigration NZ is being taken for a sucker. People are coming to NZ as migrants – but many use us as a transit camp. These people stay just long enough to get permanent residency so they can bring their families over – often elderly parents – and then they move on to Aussie. We are being left with the care of elderly parents – while Aussie gets the workers. This sort of scam –and others like it – must end.”
Err – nope. While there are indeed many refugee’s who stay in transit camps for five years while fleeing war in their own countries. I wouldn’t classify five years as a ‘stay just long enough’ approach. You have to be an NZ citizen to move to Australia exercising your right as a Kiwi. So people are only doing what every other commited Kiwi is doing.
There are many migrants who have been in NZ for 5, 10 or 15 years, and have not for whatever reason, decided to apply for NZ Citizenship. I don’t see any less commitment from them than from those of us who apply for NZ Citizenship.
As to bringing elderly parents over, well that takes being here for three years as a permanent resident before you can sponsor parents. That process takes two or more years at the moment. Again, a five year commitment to NZ before family are reunited in the same country again.
So are we bringing over our parents to sponge off the NZ taxpayer (of which we are one)? Well, to qualify for an NZ state pension, you have to have been a resident for 10 years, five of those after the age of 50. So in total if you want to sponge off of the NZ taxpayer, you need to have a 15 year plan. Again, doesn’t sound like a sure fire high paying quick win scam to me.
Now there’s probably a presumption of being a taxpayer in that time, however it doesn’t stipulate you have to have been working. Just resident. But if you’re living here, then just like everyone else every $ you spend has GST attached to it.
“Every person we allow into NZ as a permanent resident will sooner or later be a claim on the state pension system. And often they are claiming on our social welfare and health system within a very short time of arrival. “
Sooner or later? Well the oldest age at which you can emigrate as a skilled migrant is 55. Wait ten years, and then you qualify for a pension. Not exactly soon in my mind. As to the later, well heck, contributing to the tax base for 10 years and paying the pensions of existing pensioners doesn’t qualify me somehow?? WTF!
As to claiming on social welfare & health systems in a very short time of arrival. Again, lets just accept tax payers can do that, and think about those elderly parents just champing at the bit to bleed NZ dry in ten years time of $310 a week (or it’s equivalent at the time.)
You get the picture.
If I had $600k+ NZD sitting in a savings account at the moment it would pay me just ~$350 per week interest (which I get to pay tax on of course). A 3% return for a ten year investment? Well, I doubt I’ll be able to retire happily on that.
As to the health system, well again once you’ve waited three years to sponsor parents & two years during the application processing, part of sponsoring your sponging elderly parents is a commitment to ‘reimburse’ the NZ Health system for any costs the Govt. feels like claiming off of you for the first two years while they are here. And they don’t qualify for WINZ in that time either.
Yep – that sounds like a sure fire strategy to ensure someone else pays the cost of care for ‘growing old’ in a very short time.
“These people are feasting on your pension pie. And they will be feasting on it for 10 – 20 or possibly 30 years. The pension pie you and other Kiwis paid for”
It’s at this point that I stop getting all uppity with such inflammatory codswallop and start laughing.
Bake a bigger pie. It’s a principle I picked up from a book I was reading a while ago.(The Power of Nice by Linda Kaplan & Robin Koval, which is happily available via Google books for free!) NZIS are indeed baking a bigger pie, I should be fair and give them credit. Current pensioners are not living off of the contributions they have made through their working lives – that paid for the pensioners at the time. No, it’s those contributing taxes now who are paying for the current set of pensioners to eat their pie. The more taxpayers there are, the bigger the pie. So, if anything Grey Power should be demanding NZIS increase the number of emigrants allowed into the country. Since those are the people who are paying for them to have pie.
Perhaps I’d better go on to plan B – and apply for a job as an MP. Sponging off the NZ taxpayer for 3+ years, with cut price travel, all expenses for living in Wellington taken care of, allowances for this that and the other. I get to vote on my own pay rise, and enshrine in law my future benefits in various forms including a final salary pension not measured against average income.
So I’ve found something else I can agree with Winston on;
“This sort of scam –and others like it – must end.”
Umbrella Fatalities in Wellington.
There are a few facts of life you need to be aware of if you plan to move to Wellington when you emigrate.
1. It rains a lot.
2. It’s ridiculously windy.
3. The combination of these two facts means that umbrellas will die a painful and lingering death and end up being buried without ceremony in one of the many council bins around the city.
One such day was yesterday, when we went to the Home and Garden Show at the Westpac stadium. This is possible the first time I’ve taken my parents into the city on a really crap day, so they have never seen just what the Wellington weather can do to you. It was “educational”.
On the way in on the train, I was explaining the lack of any need for umbrellas, because they last about 2 seconds when the wind blows. SO it was with some hilarity we saw this as we were coming back from the show:
I think its wise to accept with grace and fortitude that no matter what you wear, or how much time you spend doing your hair in the morning – if its raining in Wellington you are going to end up looking like a drowned rat, and feeling like you will never be dry again.
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For the first time – I feel like an “Immigrant”
Lincoln Tan at the Herald has run a follow up story on the Immigration Advisors Licensing Act, having got a response from the Immigration Minister. It’s not good news I’m afraid.
But Dr Coleman said the act had been passed with the support of all political parties in Parliament, and the question of whether it breached the right to freedom of speech was never raised.
“Part of the act’s passage was subject to expert scrutiny in terms of New Zealand’s human rights commitments,” he said.
“No inconsistency with those commitments was raised.”
Dr Coleman said the House received 34 submissions on the Immigration Advisers Licensing Bill, and all supported or conditionally supported it.
OK, which raises more questions:
1/ Who the hell were these so-called experts and did they actually realise that this law criminalizes thousands of people – particularly immigrants? Did they not care?
2/ Who were the submissions from, and how many were from Immigration AGENTS seeking to stop people from advising against using their services?
3/ Why the hell was the question of human rights and free speech not raised by ANYONE who was responsible for this shonky law?
4/ And why is the fact that this is being raised now, by the very people affected by it, being ignored?
Just because “experts” didn’t raise these points doesn’t mean they aren’t valid. We are raising them now because a lot of people are bloody pissed off at being turned overnight into criminals for being helpful to other people.
What message does that send?
“Please come to New Zealand! We need 50,000 immigrants a year to keep our country going, and we need your money, but once you get here – please do us all a favour and keep your bloody mouth shut! – Its your money we want, not your opinion”
For the first time since moving here I feel unwelcome. I feel like an “Immigrant” rather than someone who was blessed and lucky to be allowed to be here. Even now with a Kiwi passport, I feel like a second class citizen because I don’t have the right to speak to other migrants and tell them how to get through the harrowing process of immigration.
And you know the really interesting thing about all this?
When there are immigration stories in the paper, there is often an anti-immigrant backlash from Kiwis. Along the lines of “we don’t want bludgers here”; “taking over our healthcare system”;” bugger off back home”. That sort of thing.
But this issue: no backlash!
These stories are being picked up by blogs and forums run by Kiwis, not just immigrants (though some Migrant forums are staying remarkable silent on the whole issue). And they are as outraged as I am. They can see the thin end of the wedge approaching, and realise that this could be a first step. If they can so easily shut Migrants up – they can shut Kiwis up as well.
I am particularly grateful to David Farrar @ KiwiBlog for picking up the cause and understanding what is at stake here.
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Poll: Should people living in NZ be able to give advice to those wanting to emigrate to NZ?
Disclaimer: This poll has not been tested for the accuracy or clarity of the wording. The results are non-binding. And it didn’t cost a penny to produce.
Other than that – have fun 
[polldaddy poll="2083180"]
Letter to the Minister
This is the letter I have personally written to the Immigration Minister. Im still working on a more standardised version for people to download, but in the meantime anyone who wants to can copy this and alter it as they see fit. I have no idea if it will do any good – but I had to try.
I sent it in via email as an attachment to:
j.coleman@ministers.govt.nz
Or it can be sent as a letter to:
Dr Jonathan Coleman
Freepost Parliament
P.O. Box 18 888
Wellington
Dear Dr Coleman,
I am writing to you regarding the recently enacted legislation about Immigration Advice – The Immigration Advisors Licensing Act 2007. This act is supposed to:
promote and protect the interests of consumers receiving immigration advice, and to enhance the reputation of New Zealand as a migration destination, by providing for the regulation of persons who give immigration advice
However the actually wording of the act, and the stance taken by the Immigration Advisors Authority, has been to take away the rights of migrants such as myself to offer support and advice to each other, and has severely damaged the reputation of New Zealand as a country where free speech is encouraged and allowed.
This law was meant to protect migrants to New Zealand from unscrupulous immigration agents, who charged ridiculous fees for often no more than filling in a form. It has failed to do that. All that has been accomplished so far is that there are only around 300 people in the world who can act as agents on behalf of the tens of thousands of migrants we want to attract to New Zealand. The law has also stifled and gagged the thousands of migrants who write blogs and post on support forums, or who even speak to each other inside and outside New Zealand.
None of us can answer questions about or express opinions based on our experience of INZ for fear of criminal charges being laid. How on earth does this protect anyone other than the 300 licensed agents?
Worse – there is absolutely no way that any of us who wish to continue writing about our immigration experiences, and help those coming after us, can get a licence under this act – because you have to have been working as an Immigration Agent and produce client files from paying clients in order to apply for the licence.
So even though we are not, never have been, and never will act as agents and charge for the help and support we give – the very fact that this is the case means we are facing criminal charges if we offer advice and help to others because we are barred from licensing. We are placed in a awful situation, and you are the only one who can help us.
I know of no other group of people in New Zealand who risk being branded as criminals for offering help, support and advice to other people going through the same situation.
The law also fails to protect migrants wishing to come here from receiving bad advice, because many of the people who are exempt from the law, such as MP’s and INZ staff continue to give out misleading and incorrect information. We ourselves have seen this first hand in trying to get help from our local MP, who gave us completely incorrect facts about the immigration process. We know of plenty of migrants who have been given the wrong information by INZ staff – often leading to them become overstayers through no fault of their own. The IALA will not address these issues, as the people at fault are exempt from the law.
I am asking you to review and change this law – if not scrap it completely. I understand fully that you were not responsible for it’s inception, but it does however fall to you as the Minister for Immigration to correct this injustice, and give the thousands of migrants coming to New Zealand every year their freedom of expression and right to free speech back. The law is badly written, and is being badly administered by the IAA. It removes the right enshrined in the Bill of Rights Act, which says I have the “freedom to seek, receive, and impart information and opinions of any kind in any form”. The IAA says I am no longer allowed to impart information if it relates to Immigration to New Zealand.
The IAA is supposed to be “responsible for the regulation of the immigration advice industry.” Migrants such as myself are clearly not part of the “immigration industry”, we are people who have often fought long and hard for the privilege of living here, and want the right to talk to other people going through the same issues. This is no different from the hundreds of thousands of support blogs and forums on any other issue. Yet the IAA has the legal power to shut us up and shut us down. This is completely unjust.
But because of the wording of the act, they are also responsible for those of us who are not in the industry, and have no intention of being in the industry. They are indeed stopping migrants answering questions from other migrants. All the IAA is able to say is that if we give “advice” we breach the act. The definition of advice is so woolly, that many of us are breaking this law, because we can be determined to be “giving advice systematically”. In one conversation with the IAA, it seems that by actually checking facts and doing some research before answering a question from another migrant – we can be deemed to be acting “systematically” and thus risk up to seven years in Jail. If we answer a question incorrectly, because we did not bother to check the truth, then we would not be deemed to be acting systematically, and we would not be breaching the act. How can this possibly be OK? And how does this protect Immigrants or the reputation of New Zealand?
Your government has, this week, said it will amend a law that makes it illegal to use a hands free mobile phone as a SatNav device, because the law did not make sense and it was not in the interests of the public. Please do the same for this law. It protects no one but the Immigration Agent Industry, and it makes it a crime to speak out about our experiences with Immigration New Zealand because we can be deemed to be “giving advice” if we fail to stick to nebulous and ill defined rules as to what constitutes advice.
Thank you very much for your time.
Helen Winterbottom
Author Avalon’s Guide Blog
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Avalon’s Money Thread: Buying Houses in New Zealand.
Filed under: Avalon's Money Thread, Interest Rates, Credit Cards & Mortgages in NZ, Property & General Investing
Many people find the whole process of buying and selling houses here a lot easier than at home (especially in the UK). In many ways it is but you still need to be very careful. Agents here are not angels and they are just as likely to try pulling a fast one as an agent in the UK. Especially once they know you are a “filthy rich migrant”.
Neil Jenman’s book “Don’t Sign Anything” is a really good book explains a lot of the nasty tricks that agents can pull. It’s a bit of a scary read but I figure forewarned is forearmed and it’s good to know when you are about to be sold a lemon! It’s especially good at talking you through the auction process and what to watch for.
My main advice is literally “Don’t sign anything” not without a solicitor looking it over.
You wouldn’t do it in the UK so don’t do it here. Always get your solicitor to check the sale & purchase agreement (s&P) before you sign it. The seller’s agent often draws up the contract and a lot of them are less than trustworthy most of the time. Always remember: they work for the seller, not for you. If you don’t understand something ask your lawyer and not the agent. The lawyer works for you, and will give you the advice that works in your interest.
Be extremely wary of anyone that the agents recommend to you. Whether its solicitors, mortgage brokers, valuers, builders, chief cook and bottle washers or Uncle Tom Cobbley. You can never be sure that they are not paying “commissions” to the agent, so they are not truly independent. If you are not the only one paying then they are not working for you. If you wish to use people the agent recommends – ask the agent upfront if they get a commision. They do not have to volunteer the information, but they do have to tell you if you ask.
Always also get a full builders report and valuation done. I want to know of any problems before I buy just to make sure I’m really not buying a lemon.
You can get a lot of useful info from websites such as QV (Quotable Value) and Terranet on local values. However it’s also worth paying for a proper valuation done especially if you are buying fairly quickly after arriving in the country. It will cost you probably around $300 – $700 depending on the property and where it is, but bear in mind the property is gonna cost over $300,000, so its worth knowing you are not going to pay too much. QV and Terranet do not do proper valuations - the reports that you get from them will not tell you if you are about to pay too much for the house.
Paying Deposits on houses.
Deposits are usually 10%, but you can organise a lesser one if you want. That would go in the S&P agreement as well. We gave a 5% deposit because this was a big house and 10% was a fair whack of money. If you and the seller arrange just a $5000 deposit thats fine – its between the two of you. Agents will probably tell you it has to be 10%, and its a load of rubbish. Bear in mind with deposits, which unlike in the UK the deposit is paid to the Agent, not to the lawyerss because they want to be sure they get paid their commission before anything else!
When you have the S&P drawn up, it’s fairly standard to have a condition in there that says “Subject to finance”. Basically it means if you can’t get a mortgage, you don’t have to go through with the purchase. But just be aware that it should actually read “Subject to finance satisfactory to the purchaser”. This can avoid you being forced to take a mortgage out that is going to cost you more than it should including sometimes being forced to borrow off the seller! This is one of the reasons your lawyer should check the agreement before you sign it.
My best advice is:
(A) Not to rush into anything and do LOTS of research. Talk to as many people as you can who know the areas you are looking at. It may look great but is it? You need to find out what the specific concerns are in each area, especially any sunlight issues, because if the sun doesn’t get onto your property for part of the day or even year, you are going to be VERY cold! (Big problem in Wellington for Eastbourne, Seatoun, and the Eastern Bays)
(B) Get a valuation on any property you are interested in. It will cost a couple hundred bucks – but it tells you what it’s really worth – from someone who works for you not the seller.
(C) Dont use any companies recommended by an estate agent. They may be paying “Commission” (aka Kickbacks) to the agent and are therefore NOT independent. If in doubt ask the agent – they have to ‘fess up.
(D) Check out some auctions and see what happens. Watch out for “Vendor bids” where the agent bids the price up on behalf of the Vendor. It’s totally legal to do that here. We went to one auction where we had been told the house was expected to go for “top 400′s”. The bidding started at 600. There was only one guy bidding (and lots of interested watchers). He bid against the agent only and ended up paying $780K. I cannot for the life of me work out why he didn’t just stop. But ho hum not my money.
(E) Use a Lawyer from the start of the process. Once you sign a Sale & Purchase agreement in New Zealand – it is a Binding Contract and exceedingly difficult to get out of if you change your mind. Be absolutley sure it is right before you sign. This is the biggest difference between the UK and NZ house buying systems.
Updates:
Obviously since writing this about 3 years ago, Ive had a lot more experience of buying houses and dealing with Real Estate Agents. Ive met a lot of agents who are spectacularly good at what they do, and just would not do anything dodgy. Ive unfortunately met one or two for who the word “Ethics” doesn’t mean a whole lot.
You should also be aware that there is a new Sale and Purchase agreement out, written “in plain English” by the Real Estate Institute. That’s a bit like the Immigration agent industry getting a law written that says only they can give immigration advice. If you want to use it – fair enough – but if your lawyer says its a bad idea – please listen to them. Also know that although some agents may claim it is their Company Policy to only accept the new S&P, they are not in a position to do this – they have to accept an offer written on the original S&P whether they like it or not. If you have any problems – speak to your lawyer. I think its worth noting that I don’t know of any Property Investors that will use the new agreement – and its their job to understand how these things work. I wouldn’t touch it with a bargepole!
Avalon’s Money Thread is a series of posts which were originally written in 2007 for an Immigration Forum. They came about by answering questions that forum members asked, about how to cope with the often difficult financial situation they face in New Zealand. They formed the basis of what was eventually to become the book Avalon’s Guide: after another year or so of drinking way too much coffee and finding out way more about taxes, money and investing that any sane person should.
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Avalon’s Money Thread: Moving your money to New Zealand
Well, I found the whole concept of currency transfers a bit daunting at first. We got caught with the exchange rate in the floor (2.5:1) at the time we had to buy our house so it was all a bit depressing. We only brought over the minimum to start with, and then brought over the absolute minimum to buy the house with. We still have a bit of money in the UK to pay our insurance premiums and stuff over there.
I use HiFX to do all my transfers. I have found that they are really excellent for explaining this without making me feel like an idiot for not getting it the first time. There are no extra charges to pay with them either. No flat fee, payment fees, electronic transfer fees, fees to pay to your NZ bank for the privilege of putting money in. They make a profit but it’s on the difference between the rate they give you, and the rate they buy at.
So when you ask for a quote (for example “I want to sent £10,000 to New Zealand” they tell you the rate and what you will get for it at the other end “The rate is 2.9000 and you will get $29,000” (in my dreams!)
Hifx pay the money direct to your New Zealand bank Account – like this:
Your UK account -to- Hifx UK account (just like paying a bill) -to- your NZ account.
It’s teh same the other way round as well:
Your NZ account -to- Hifx NZ account – to- to your UK account.
Coming from the UK to NZ the delay is in getting from your UK account and clearing into their UK account. This delay is because of the UK clearing system. Update: This should be quicker these days. My UK bank (First Direct) now does the move in 24 hours.
Whatever happens (and again this is what I know of Hifx only), you will be told when you get your quote and agree to the trade exactly how much money will hit your UK account.
It’s worth registering with a few money transfer companies (should be free, if not don’t touch them), and then when you want to transfer, ask all of them for a quote. Get not only the rate but also the total amount in $ that you get at the end. Then take off any fees that are going to be charged at the UK end. And go with the one that gives you the most $$$$ for the least amount of hassle. It’s also worth asking your UK bank for their exchange rates and fees, and comparing that as well.
Hifx have a service where you can set up regular payments from UK to NZ (or vise versa).
From UK -NZ:
The minimum amount is £500 per month, you form a contract for 6-18 months and the rate you get is fixed at the start of the contract.
So you know exactly how many $$$ you will be getting in your NZ account.
You set up a Direct Debit from your UK account to HIFX UK account
Money hits your NZ account about 5 days later
NO CHARGES .
From NZ – UK
Same deal but the minimum is $1000 per month.
If you are in the UK currently, its worth knowing that if you have a Nationwide account you can use your ATM card to withdraw $$$ here with no charge which can be very handy for smallish sums when starting out.
Updates:
MoneysavingExpert keeps a current list of credit and debit card fees for taking money out of ATM’s abroad, and keeps a list of the cards that have no charges for doing this. This is something its worth being aware of way before you move over here, because you will not be able to open an account once you leave.
There’s a new Online company called Currency Online that are part of HiFX. You can do all the trading online without having to call someone and bother with filling in forms. Its very easy to open an account, and they have now removed their silly charges. The rates are still crap compared to HiFX, but its convenient, and you can see the amount of money you get straight away.
Hifx have no changed the way they operate, so you can transfer less than $10000 in a spot trade, but there is a charge. It is no longer as clear cut a service as it used to be.
Avalon’s Money Thread is a series of posts which were originally written in 2007 for an Immigration Forum. They came about by answering questions that forum members asked, about how to cope with the often difficult financial situation they face in New Zealand. They formed the basis of what was eventually to become the book Avalon’s Guide: after another year or so of drinking way too much coffee and finding out way more about taxes, money and investing that any sane person should.
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Economist humour
We received our quarterly customer newsletter from Brittania Finacial Services today, these are the people we used to liberate one of my UK private pensions. I can’t say that normally the read is funny or fascinating, but then I don’t find my quarterly pension statements any more interesting at the moment.
So it was a pleasant surprise to find this humour;
When Albert Einstein dies, he met three New Zealanders in the quue outside the Pearly Gates. To pass the time, he asked: “What are your IQs?” The first replied “190″. “Wonderful”, exclaimed Einstein “We can discuss the contribution made by Ernst Rutherford to atomic physics and my theory of general relativity.” The second answered “150″. “Good” said Einstein “I look forwards to discussing the role of NZ’s nuclear-free legislation in the quest for world peace.” The third New Zealander mumbled “50″. Einstein paused, and then asked “So what is your forecast for the budget deficit next year?”Which also reminded me of some other economist humour, such as;
“For every economist, there is an equal and opposite economist”
“If all the economists were laid end to end, they’d never reach a conclusion” - George Bernard Shaw.
Avalon’s Money Thread – should I pay off my home loan as fast as possible?
I have always thought that paying your mortgage off as quickly as possible is a ‘given’. Not according to these guy’s. That did worry us.
I actually heard a rather good explanation of this from the ASB advisor. I had always thought that getting the mortgage off your back was to be our first priority, and for many people it may still be the best option so I wouldn’t discount it out of hand. That really depends as far as I can see on your personal circumstances, finances, and how good you are with money. I fully believed in this principle when I came here purely from reading the Anita Bell books. I had never really appreciated just how much money you actually pay for a house when you take into account the interest payments over 25years.
Our house cost $595k to buy. But over 20 years taking a 265K mortgage will add 269K to the cost so it will actually have cost us $864k to buy! Interestingly – if you are me anyway – by paying fortnightly for the whole 20 years we save a whopping $53,000 on the cost of our house- that’s a whole lotta coffee!
15142 cups to be precise
However where the advisors are coming from is that if you pay off your mortgage and only do that, you still have no savings with which to live on, so you still have to work to earn an income. Whereas if you were to save / invest at the same time as overpaying a bit on your mortgage you get rid of the debt earlier (and save money on interest charges) but you also have money set aside that you can now live on (or investments that generate an income). That’s the idea anyway!
Hi, everyone, pardon me if I’m asking a silly question but from reading the forum, I have this feeling that most people take up mortgage loan of about $200K to purchase a house, even though they may have the spare cash. Can anyone enlighten me on the reason for such arrangement?
Well, I can’t exactly answer that as for a start if I had $200k in cash hanging around – I would have used it to buy the house instead of taking a mortgage. However – there are 2 theories that could explain at least why some people would do it.
Firstly – revolving credit mortgages are popular here. We have one of these, and part of our mortgage is on this scheme. (About $100k) Now we didn’t actually need the whole 100k, as we have some extra savings, so at the moment only about 60k of that is being used. A revolving credit facility is like a big (huge) overdraft limit. So in our case we have an overdraft limit of 100k, but the balance is only about 60k overdrawn. There are 2 reasons that we have done this:
(1) we don’t pay interest on the portion of the “mortgage” that we don’t use, we only pay it on the 60k,
(2) If we need that money in a hurry we don’t have to ask the bank for a new loan, it’s already “approved” and that money is available at mortgage rates (though please see post on revolving mortgages for why you need to be very careful of doing this).
The other thing that we do that goes against the “get rid of the mortgage fast” is that we are saving to invest alongside paying extra on the mortgage. This money will be used to buy shares to start with and this was a really big thing to get my head round. It’s all very well having no mortgage but do you have any money to live on as well. My parents are a good example of this. They have used $200k to buy a stake in our house. With our money, and our mortgage plus their 200k, we bought 1 big house. They have the money to get rid of at least a huge chunk of our mortgage but they would have nothing to live on (as they have very little income).
Something else I did remember if you are buying now, the exchange rate is very poor (2.5 @ time of writing*), and in some cases it may actually be better to leave some money in the UK, pay an NZ mortgage and then bring the cash over when the rate improves. I can’t remember the numbers, but we worked out that if the exchange rate £-$ went up to 2.85, it would be worth us leaving money in the UK for up to 2 years.
* Oh for the days of an exchance rate of 2.5! Its 2.2 today – and thats up a bit.
Avalon’s Money Thread is a series of posts which were originally written in 2007 for an Immigration Forum. They came about by answering questions that forum members asked, about how to cope with the often difficult financial situation they face in New Zealand. They formed the basis of what was eventually to become the book Avalon’s Guide: after another year or so of drinking way too much coffee and finding out way more about taxes, money and investing that any sane person should.
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See – laws can be amended at the drop of hat for being too silly.
Monday this week it appeared in the news that a new law about to come into force next month may have in insey-winsey little bit of a cock up in it. Stuff reported on The Road User Amendment Rule 2009.
Which helpfully
“…means drivers will not be able to look at a navigation aid on a mobile phone when driving, even if it is mounted on the dashboard. You can use a mobile phone held in a cradle while driving, but only to make, receive or terminate a phone call. You cannot use them in any other way, such as reading a GPS map, reading email or consulting an electronic diary.
However the law allows people to use normal SatNav devices. Which is daft.
On Tuesday, the transport minister, Stephen Joyce is reported as saying:
“It is not the intent of the rule to make it illegal for motorists to use the satellite navigation or music functions of their cellphones, provided these are mounted in the vehicle and are manipulated infrequently. The rule would be amended to make that clear.”
Smart man – egg quickly and efficiently removed from face and common sense restored. Don’t get me wrong – I am keen to see a law come in that stops plonkers nearly killing me because its more important to text someone than get their car safely round a corner. But laws should be sensible. And one that says you can use hand free SatNav, unless it happens to also be a hands free phone is just – well – silly.
Hopefully the IALA will not be far behind in getting amended to make some sense.
At least this story shows that it can be done. It took one story in the media to get the Road Amendment act altered (or at least an agreement to alter it). There have been several media reports about the IALA and its effect on bloggers, forum posters and support groups. It worries me slightly that this is being ignored – and its starting to look a bit like we don’t matter because we are migrants. I really hope that is not the case.
Anyway – I have emailed my letter to the Immigration Minister Dr Jonathan Coleman today. I hope it does some good.
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