Are you the 99%, 53%, 1% or who cares what %?
Filed under: Banks, Cost of living, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
The “Occupy Wall St” protest has hit New Zealand this weekend – “occupying” Auckland, Wellington, Christchurch and Dunedin. I have tried to get my head around this – and I have to say I am failing miserably. When I started seeing “We are the 99%” posts coming up on my Facebook feed – I took a look at that and understood what they were saying.
We are the 99 percent. We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we’re working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent.
I get anger that banks and financial institutions had screwed up, lost an awful lot of money, got bail outs, and yet still managed to find many millions of dollars to pay huge bonuses to the people who screwed it all up, while people lost homes and jobs.
Well who wouldn’t be pissed at that? I find it astonishing that governments are bailing private companies out, but there’s not a penny for us if we hit the skids. No one bailed us out when IBM got rid of hubby. We had to manage that ourselves – as does everyone. We have friends who have lost everything – no one bailed them out.
But I am also somewhat confused about why the blame is only being shoved on the corporates – and not those of us (ie just about all of us) who have spent the past decade or 2 spending vast sums of money we don’t have (ie debt) on cars, various iGadgets,clothes, shoes, posh food, holidays and houses. We have to take some responsibility here. Blaming the big bad corporation doesn’t change the fact that as a whole the western world gorged itself on debt and consumerism. No one forced us to buy iPhones. (I wonder how many people occupying Wall St still have smartphones, and are updating Facebook with their adventures via the very items the corporations sold us, and we willingly bought with money that the banks invented for us to spend, increasing the debt balloon that they now say is the source of all ill in the world).
But what has got me really confused was this has morphed into a strange anti-government, anti-money,anti-whatever-we-can-think-of-to-be-peeved-about-as-long-as-we-can-blame-the-anyone-who-is-richer-than-us sort of movement. Everyone is supposed to have a voice – no one is considered to be worth more than anyone else. This to me is an alien concept – in $ terms of course people are worth different amount – please never let a brain surgeon work on me if you only pay them the same as the cleaner. In human terms – I will always value kindness and decency in someone more than I will value someone being an arse.
I saw this video of the “assembly” in Atlanta – I gotta say – if that’s the alternative to the current political system we have – no thanks.
I am way too independent to sit there and parrot back what I am told to say – what are we? 5? Repeat after me “You are all individuals”…
So – are you the 99%? Probably not.
Global Rich List puts your income into world wide terms. And you may be surprised at how little income it actually takes to get you into the top 1% of earners in the world. Global Rich List doesn’t work for NZ$, but just £25,000 a year or $49,000 USD gets you there. At current exchange rates that works out at $49,500 or $61,500 NZD.
The New Zealand minimum wage is $27,040 a year which (using the UK£ to work it out – £13,600) puts you in the top 10.5% richest people in the world. And yet on that how many people still have mobile phones and internet access?
The median wage in New Zealand is $49,000. That means that 50% of wage earners in New Zealand are actually among the top 1% of earners in the world.
Those of us who pay for those of you who whine about all of that… or that… or whatever.
Ok – so this made me laugh. Can’t see this lot repeating back what they are told 3 words at a time and looking gormless.
So I won’t be occupying Wellington. To be honest I am too damn busy dealing with our current financial situation, budgeting our money, saving where and I can and spending what I have spare on stuff produced by people who also earn money. Some of them earn less than me, some of them earn more than me. Some of them are worth that much, some of them aren’t. I make that decision myself, and decide for myself where I will spend money, how much to spend, and whether to take on debt. If I take on debt – I take full responsibility for that decision, and for any mistakes I may make.
And I have absolutely no idea which % I am.
I am not a number – I am a free man .
Unimpressed with HiFX
Back at the end of July I started looking at making the absolute most of the dire exchange rate, and the possibility of moving some money back to the UK. This was made possible for me by the fact that HiFX – my number one money moving company, were allowing transfers on just $1000 without a fee – whereas before when I used them, I needed to move $10,000.
So I duly moved my $1000, and ended up with £526 in my UK account. No extra fees to take into account and it was all hunky dory.
Then I got a heads up from my mum, who was bringing some UK£ over to set up a Sterling account with ASB, and she was going to be charged a £9 fee by Hifx . She actually ended up using Currency Online – which is a subsidiary of Hifx, and not only got charged a fee – but a hidden cost of £25 in a third-party bank fee sting – that currency Online are fully aware you will be charged for, but hide behind the really shitty excuse that you may not actually be charged so they don’t have to tell you about it anywhere but in the really small print of their T&C’s.
I started looking at Hifx – and yes, if I wanted to re-transfer the £526 back – I was going to be charged a fee.
WHY? I was really confused. Had I somehow managed to get a free transfer? There was no information I had seen, no special code I had entered. So why, the week before had it been free and the next week not?
I emailed Hifx. This was the response:
We have recently changed the way we calculate the cost. We now have decreased the margin on the exchange rate.(i.e. you now get a better rate) and change the fee on smaller trades. It works out to be roughly the same as before.
Now this fundamentally changes the way HIfx works. It has always been a place you could go to transfer currency with no added fees – the exchange rate quoted is the exchange rate you actually get – you don’t have to sit there with a calculator working out the real rate takin into account all fees. Easy. Adding a fee means you now have to take that fee into account when they quote you a rate.
However – this also begged another question – how long had clients been able to transfer just $1000 or £500 instead of there being minimums of $10,000 or £5000.
Now – I want to make something absolutely clear here – when I wrote my book – I double checked facts with Hifx – and there WAS a minimum spot trade allowed of $10,000 or £5000. That was back at the end of 2007.
I emailed Hifx back, asking about this and was told:
The changes came into effect on August 1st. Our previous minimums were NZD 1,000 as you made a trade for this amount to GBP in July. Our minimum is now $50 NZD but the fee charge will make these low amounts not very worthwhile.
Ok, but that still doesn’t answer when they removed the $10,000 / £5000 minimum. So I tried again. And again after 6 weeks of no response. This was the reply:
A response was sent to your previous email, possibly it went into your junk folder? The changes came in to effect August 1. All registered customers were sent emails advising them of these changes, possibly it also went into your junk folder? There was also clear instruction advising of the change on the website as well as in the terms and conditions that you would have ticked the box and confirmed that you had read and accepted. The fee was previously included in the rate but with a number of customers wanting more disclosure. So you receive a better rate but pay the fee. It works out to costing you roughly the same.
You will notice perhaps that it still answers the same question – not the question I actually asked? Are Hifx now staffed with politicians I wonder? Now there’s a couple of points worth noting here:
- All register clients were clearly not sent emails about this – both myself and my mum are clients – and we were not sent an email.
- There is no clear instruction on the website. I tried to find some reference to it when I first noticed. Eventually I found the new fee structure – but no indication of why there was a fee one week, and none the week before.
- T&C’s – I have a certain level of contempt when the best answer a company can come up with is “well you ticked the T&C’s – it’s not our fault you didn’t read them”. While technically true – it shows a lack of understanding – I am certain it always shows a level of hypocrisy, and it means you can’t come up with better excuse.
I was now actually peeved – so I asked again
You started charging $12 transfer fees on transfers under $10,000 NZD on the 1st August.
You have answered that question before – this is correct.
I am asking at what date you started allowing transfers under $10,000 NZD without the fee in the first place. As a client for many years, it was always the case that we had to transfer minimum amounts (unless I have been misinformed by Hifx for years). I managed to make one transfer of $1000 without the fee, and then you changed the system.
I want to know how long clients were able to make small transfers without the fee. 1st August is the end date – I would like you to tell me what the start date was. It’s a different question
(I also pointed out that I was not impressed by the attitude). Now this got passed onto someone else, who rang our home number. My parents gave them my mobile number (which they did not bother to ring), and then for some reason, an email was sent to my parents – not to me.
The back office has passed on your email to me so that I can answer your questions. I did try calling you just now but you were not in.
In relation to when we allowed transfers under 10k NZD, we have for years allowed smaller transfers but the smaller the trade the wider the spread.
As for the change in fee structure, we did send out an email to all our clients prior to the change. I am sorry this appears not to have been received by yourself but we did send a bulk email to every private client with an active account. The contract note clearly lists any fee applied to a transaction.
I would be happy to discuss this with you in detail so please call me on 09
So – at some point (but they won’t tell me when) between the end of 2007 and now – you have been able make transfers of less than $10,000NZD as a spot trade with no fee. They did not in fact fail to send out emails to their entire database of clients – the emails to me and my mum somehow got lost in cyberspace, but they are sorry that we failed to get it – not sorry that they may have missed us off their email list. And who cares – they tell you there’s a fee in the contract note – what more do I expect?
What I expect is for Hifx to retain its reputation for simple, upfront, clear and easy to use currency transfer services, and a helpful attitude when their clients want information and help. I do not expect to get the run around, to have hunt through their website trying to find out what fees they charge, and get attitude when I ask a simple question.
Interestingly, when mum moved a second lot of money – ASB gave her a better rate (no fees) than Hifx. When a mainstream bank beats the currency traders on rates – you know there is a problem. For us – Hifx are toast and we wont be using them or recommending them anymore. Currency online has always been expensive – but it looks like Hifx have dropped to their level, rather than bringing currency online up to Hifx’s level. Interestingly – at the moment anyway – Currency Online have lower minimums before they start charging fees – but ASB is still beating thier rates (once you add in the fees).
All I wanted was to check the dates of the changes, so I could update my blog and add the information to the updates that go out with the E-Book. I really wasnt expecting to have to work so hard to find out the facts. Really disappointed.
Why are Visa and Mastercard forcing you to have contactless credit cards?
Filed under: Banks, Interest Rates, Credit Cards & Mortgages in NZ
ASB contactless credit cards are a faster and simpler way to pay for your purchases. Now you can fly through checkouts at participating stores, paying by just tapping your card on the terminal.
This new technology sends payment data to the terminal at the checkout with just one quick tap to the terminal. Once your payment has been confirmed you’re ready to go.
Problem is – it seems that these cards are being sent out automatically to people. And many of those people are phoning the banks and trying to get an old style card back because they don’t want a contact-less credit card. We don’t want one either – the security holes in this system are big enough to drive fly an Star Destroyer through)
The problem is they are being refused. That’s right – you have NO CHOICE except to have a credit card that allows funds to be taken out of your account without you ever having to swipe it, push the chip into a machine or type in a pin or sign for it.
Given that banks and Credit Card companies has thus far failed to find a way to stop your average common or garden credit card fraud – you would think they would be loathe to invent a system that is wide open to mistakes, abuse and the emptying of your account.
And the worse thing is that if this does turn out to be watertight as a sieve – most people wont even notice because most people never look at their credit card statements. It should be noted that although I have posted up a picture from ASB and quoted their website – this is not something ASB are forcing on us (or any other bank for that matter). This is being driven by the Credit Card Companies – though I have to say that the banks probably have the power to tell the to get stuffed if they wanted to.
Time for an RFID Blocking Wallet???
New Zealand Interest Rate changes
Filed under: Banks, Economics, Interest Rates, Credit Cards & Mortgages in NZ
The reserve bank has held our base interest rate – and now it seems most of the “experts” how claimed the rate would be rising by the end of this year have changed their minds and now claim it will be march next year.
Apparently they will have to go but then some say they shouldn’t. Some say they should stay the same.
Helpful.
Interesting, I checked the ASB home loan interest rates – and they have gone down recently:
As at 01:33:46 a.m., Thursday 4 August 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.85 % p.a.
- Housing Fixed (12 Month) 6.15 % p.a.
- Housing Fixed (18 Month) 6.40 % p.a.
- Housing Fixed (24 Month) 6.65 % p.a.
- Housing Fixed (36 Month) 6.95 % p.a.
- Housing Fixed (48 Month) 7.35 % p.a.
- Housing Fixed (60 Month) 7.75 % p.a.
- ORBIT Home Loan 5.75 % p.a.
As at 12:25:54 p.m., Thursday 15 September 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.85 % p.a.
- Housing Fixed (12 Month) 5.90 % p.a.
- Housing Fixed (18 Month) 6.10 % p.a.
- Housing Fixed (24 Month) 6.30 % p.a.
- Housing Fixed (36 Month) 6.70 % p.a.
- Housing Fixed (48 Month) 7.05 % p.a.
- Housing Fixed (60 Month) 7.40 % p.a.
- ORBIT Home Loan 5.75 % p.a.
I’m still not fixing from my flexible rates.
A humourous interlude at the bank :)
Much needed after the past few blogs. ASB advertise that they will change foreign currency notes commission free. Having just recently returned from Fiji with a small bit of cash left, I thought I would try it.
So I toddled off to ASB on Lambton Quay clutching $6 FJD (three $2 notes) in my mitts and asked if they could change them an account of it may just get me enough money to buy a cup of coffee.
Bless the girl behind the counter – we had a laugh about it – and lo – my $6 FJD turned into a whole $3.80 NZD.
Which we agreed, that with some shopping around – I may actually be able to buy a cup of coffee.
The New Zealand Art Show Wellington
Last night we popped along to the opening of the NZ Art Show in Wellington.
Now this isn’t usually “our thing”. Neither of us are particularly “arty”, and I have a tendency to think of things like this as a little pretentious. Though I do quite love painting an drawing myself. But in this case we were actually invited by the Bank.
Yep. We owe the bank enough money that they invited us to something!
Actually that’s not strictly true – we owe them more than we did when we bought our home, but it’s still not exactly a huge amount. But ASB are the main sponsors of the event, and our personal manager at the Manners Street branch asked if we would like to go.
Far be it from me to turn down wine and nibbles supplied by the bank!
But you know, the event really is rather impressive – even if Art is not really your thing. The main impression I left with was there that would be something in there for everyone. Some of it I found hideous, and some I swear I would have whipped out the credit card for if I had had the money to burn on it. But I guess that is the point of art – it’s all very individual. One person’s loves are another person’s loathes. And as long as you can afford it – well, then it’s your taste that matters, not anyone elses.
Just don’t take out a loan from the very friendly bank to do it!
As someone buys a piece, new work is added, so over the three days of the exhibition, it will be changing.
Tickets are $10 each for Friday during the day, Saturday and Sunday.
Edited to add. As we were leaving we saw Alan Bollard, govener of the Reserve Bank heading into the show. I sure hope he wasnt buying anything and thus adding to the rate of inflation meaning he just has to put our interest rates up!
Is it worth moving money back to the UK right now? Part 1
Filed under: Avalon's Money Thread, Banks, Economics, Exchannge Rate & Currency Transfers, General Budgeting
I am actually trying to work through this myself, so I thought I would write about it as I’m going along, and see what conclusions I come to. Just so you know, I actually don’t know the answer at this point.
First the reason for thinking about it: The exchange rate is historically low, running at about $1.90 to the UK£. So basically, all being equal, now is the perfect time to sell NZD and Buy UK£. In theory you would then sell the UK£ and buy back NZD when the rate gets to more like $3 to the £.
Let’s look at just $1000.
- Sell $1000 and buy £526 at current rates
- Then when the rate changes to (hopefully) $3.
- Sell £526 and buy $1578 NZD
- Profit: $578
- Which makes a return of a whopping 57% which is something you are not going to get very often.
So why wouldn’t you do that?
Well there’s a few things to take into account.
1/ Interest rates on savings.
In the UK you will basically get 0% interest on savings. So the £526 is unlikely to grow in the foreseeable future.
In NZ however, you can get 3.5 – 5% on savings.
So if we assume that you get the current savings rate at ASB, then the $1000 actually earns you $35.62 (compound interest) a year. Bear in mind that you pay tax on that.
Ok, so that means you need to be able to make at least 3.5% on the transfer back within a year to make it worth moving money to the UK.
I work out that the rate need to hit $1.967 to do that:
- 1035 / 526 = 1.967
Which means that in no way shape or form does the interest earned in NZ outweigh the gains you can make in the UK on the exchange rate, unless you believe that the $ will never go down in value much, and we are looking at a new “normal” of $2.00 to the UK£.
2/ “Time in the Market”.
Its often said that Time in the market is more important that Timing the Market with investing. Ie – don’t buy and sell quickly, buy and hold on for dear life.
So if you can earn $35 a year on your $1000, how many years can you keep the money in the UK and wait for the seemingly mythical $3 exchange rate and still beat the interest rate?
Waiting for $3 : £1 will net you $578 , so you can wait so that’s the equivalent of 16 years worth of interest at 3.5%.
Actually that’s not totally accurate – I worked out that because of compounding, it actually takes 13 years according to MoneyChimp
3/ Will you ever get $3 to the £ again?
Who knows. According to some experts the NZ$ will never go down in value to the same level it was. These are often the same people that say house prices will never go up by the amounts they did in the past. I actually think that’s as daft as saying at the height of the property boom that house prices never go down.
It’s cycles. Money works in cycles. It always has, and I personally don’t see why it would suddenly behave any differently.
But remember, each year, the exchange rate just has to go up a tine bit – the equivalent of an extra $35 ever year to beat the interest you would earn in NZ.
Part 2: What about comparing with a mortgage?
NOTE: This assumes you use a Currency Transfer outfit that has no fees. HiFX have recently dropped thier minimum tranfer to $1000 NZD and 500 UK$ to get fee free transfers.
NOTE 2: Ok – so looks like Hifx havent actually dropped there fees. For some reason I seem to have got a free transfer – but now when I try and do it again they would charge $12 or $9 for the above transfers – with the old limits of $10,000 or £5000 to get fee-free transfers. Bugger.
Banks are stepping up to help Christchurch
Filed under: Banks, Interest Rates, Credit Cards & Mortgages in NZ, Life in New Zealand
As soon as the government announced it’s package to help people in Christchurch, ANZ was on the TV with an advert outlining it’s 1,000,000,000 package to help affected people in the red zone.
We’ve created a $1,000,000,000 kick-start fund to provide lending to home owners living in the Government’s designated residential red zone.
A heavily discounted variable rate – currently 3.70% p.a. – will be available to eligible residents for the first year of lending – no matter where you relocate in New Zealand.
What does the fund provide?Eligible residents will get a 2.04% discount off ANZ’s variable home loan rate for the first year of lending up to a value of $500,000.
Who is eligible?Any home owner living in an area of Christchurch which has been designated as part of the Government’s designated residential red zone. What do you need to do to qualify?
- You must be eligible for and take up the Government scheme
- and deposit the net proceeds of the Government payout into an ANZ call account within two months of receiving it
- At the point of taking up the lending, you’ll need to direct credit your salary directly into an ANZ transaction account
- The loan must be drawn down by 31 December 2012.
Kiwibank have a similar package to ANZ:
If you accept the offer from the Government and wish to purchase or build a property elsewhere, we’re offering:
a 2% p.a. discount on our variable rate for a year from drawdown – this means that the rate will be 3.65% p.a.
no application fee for new home purchases
no fixed rate break costs or early repayment fee if you already have a Kiwibank home loan.You’ll need to:
contribute the Government’s net payout towards the property purchase price, and
have your salary direct credited to a Kiwibank account.The maximum loan amount is $500,000, and the loan needs to be drawn down before 31 December, 2012.
ASB have also updated there aid package, but to be honest it really is pretty weak compared to ANZ.
Westpac and BNZ haven’t released an up to date package for people in the red zone – which is a pretty poor show really. So ANZ and Kiwibank are the winners here for taking some decisive steps – good on them.
Paying off debt – still too hard for most people :(
Filed under: Banks, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
According to a piece on the herald today, Kiwi consumer debt (that doesn’t include mortgages on property) still stands at a whopping $11.96 billion. That’s $11,960,000,000. Now the Stats NZ population clock stands at over 4.4 million, but census information says there are 895,000 people here under the age of 15. Which leaves an “adult(ish) population of 3.5million give or take. Which means on average every one over the age of 15 would be carrying a debt of $3417 each, all at high interest rates. This is debt on credit cards, store card and hire purchase.
That’s actually quite a lot really.
And according to the article, the most that people are thinking of doing to sort this out is not get further into debt. But there are very few people thinking of paying it down.
Now for the moment, we also have some consumer debt on a credit card – expenses from setting hubby up as a contractor. As you know, we swapped this to a “low” interest credit card, saving us about $250 a month in interest, and that is being paid off rapidly, and will be gone by the end of September. To be honest, I felt really unconformable having the debt there, and it just didn’t seem to be getting lower. So we took steps and have budgeted $2000 a month to pay the card off. Now most people will not have the income to do that, especially here in New Zealand. But the bottom line is – debt has to be paid off somehow.
It doesn’t have to be $2000 a month, but it does have to be more than the minimum payment, and having consumer debt means if nothing else – you have to stop buying things you cannot afford.
Its a pain – but its true.
Apparently the interest we are collectively paying on our credit cards (at an average of 18%) is $650 million in a year.Now shared amongst the same 3.5 million of us sharing the debt, that works out at a reasonable sounding $185 a year each. But when you consider that you pay that for the privilege of having the debt, and you actually don’t have anything to show for it – its a bit of a waste of money isn’t it?
Believe me – that $2000 debt repayment could be much better spent on us having some fun. Though actually because I’m completely sad – once the credit card is paid off, its going to be used to pay down some of our business mortgages. We may however be able to use 1 month of it to fund the purchase of a new laptop. In the meantime, I gain a huge amount of pleasure from denying the banks a fair chunk of interest each month.
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Would you apply for a mortgage for someone else…
Filed under: Banks, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ, Property & General Investing
and then complain when you realise that you were scammed and the mortgage broker lied to you when they told you it was to help a British couple out whose money was locked up in the UK???
Much as I would like to help people make the move to New Zealand – the answer for me is
NO WAY IN HELL! 
Because call me nuts – but isn’t it fraud to apply for a mortgage or loan under you own name, when you know its actually for someone else, especially when you are doing so on the promise of being paid money by these people when the loan draws down, and then a monthly fee from them?
This is what has happened to a couple on the Kapiti Coast. They got scammed by Kerry Brundle, a mortgage broker. And they have finally woken up and gone to the police – along with many other victims who for some utterly inexplicable reason took out loans to give this woman money. The mortgage payments were supposed to be met by Brundle, or some other fictitious character and then the people scammed were also supposed to receive a payment when the loan was drawn down, and then ongoing payments each month. To say “Thank you”.
Mark Mason can testify to how persuasive Ms Buddle could be. He took out a $42,000 mortgage on his house in Paraparaumu in 2008 so he could lend her money to renovate her home. He has since had to sell his house to avoid a mortgagee sale.
“She said it would be good for both of us. I trusted her, she was a friend. I thought this has got to be easy – get $1000 upfront then $100 a month – for signing a piece of paper.”
Were they all barking nuts???
Why oh why oh why would you mortgage your house, risk yours and your families financial future to give money to someone else? Charity is one thing – stupidity is quite another. If you have the money and want to help people – that’s great: laudable and entirely your choice. But when you are prepared to sign loan documents under your own name knowing full well that you are lying about the loan being for you in exchange for money, I’m afraid any sympathy I have goes out the window. To me – this is what greed is – you do something which highly unethical, because someone is going to pay you money to do it.
That doesn’t diminish how much of a snake Kerry Brundle is – living like a millionaire on the money she scammed out of people. There are an awful lot of people out there pretending they have a lot of money when they don’t, so she will not be the last person to get caught for trying to live off other people’s money I’m sure.
Why do people do this?
We were prepared to take a certain amount of risk when taking out mortgages to buy our investment properties. But always – we ran the numbers, listened to advice, and remembered that if we screwed up or things got difficult – we were risking not just our home and future – but that of my Parents and brother as well. I sure as hell would never risk that to borrow money for someone else! If I give money – for any reason – it is money I can afford to give – and I give it because I want to – not because someone will pay me to do so.
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