Pharmacy Savings (Updated)
Filed under: Cost of living, Exchannge Rate & Currency Transfers, General Budgeting
So after the debacle trying to buy some Ibuprofen without having to take out another mortgage, we finally put together an order at on online UK Pharmacy. It took us a while because we had some concerns about ordering from OneClickPharmacy as they get a lot of bad reviews (and the good reviews are classic sock-puppet reviews like the crap that Woburn International wanted to paste on here.) Most of the problem seems to be in the length of time it takes for people to get their orders (which lets face it isn’t so much a worry – its gonna take a few weeks anyway), and crap service (when compared to getting ripped off here and getting bad service – ill take bad service and not getting ripped off as an improvement.
We looked at using Chemist4U – but they don’t list NZ as one of the countries they ship to. I emailed them to ask and got the annoyingly unhelpful reply “It depends on what you want”. So in the end we went with One Click.
I have had a questionnaire come through about one of the items – they Syndol Tablets – which I’ve answered and they have confirmed that it’s all ok, and the order is now being processed.
I will let you know if it all gets to me ok.
In the meantime – I thought it would be worth posting just what I bought and how much it cost.
(And yes – I’m a fake redhead – and yes I really do use different hair dyes depending on which particular shade of red I fancy being at the time.)
I’ve used the exchange rate as it was on the day I placed the order – but also thought it was worth looking at how much the order would have cost if the exchange rate had been at $3 to the £1. Even then – its still cheaper to buy abroad and ship it.
Let’s see if the order goes smoothly.
RESULTS:
Order Placed 9th October
Pharmacist questions recieved 12th October
Responded to 13th October
Email to say order shipped 15th October
Credit to CC – email sent to ask why 17th October
Responce that splenda out of stock (with apology for not letting us know) 17th October.
Order arrived 20th October.
I’m gonna go out on a limb here and say that’s a fantastic result!
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.
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.
When you think the exchange rate can’t get worse…
it hits $1.88 to the £.
Making the most of the crap exchange rate – Lightsabres are cheap :)
Filed under: Cost of living, General Budgeting, Getting to New Zealand, Life in New Zealand
Let’s face it – the fact that £1 wont even get you a measly $2 on some days right now makes emigrating to New Zealand hideously expensive. When we bought our house, the rate was at $2.50 or there abouts, and we were practically crying our eyes out then! Right now, we need to bring over about $10,000 worth of £UK to pay for our upgraded insulation – it’s the difference between it costing about £3,500 and £5,000. It is no laughing matter.
Multiply that up for anyone wanting to emigrate and buy a piece of New Zealand? Well -we originally paid $135,000 as a deposit, bringing over about £54,000 which was the money we had from selling our UK home. That meant we had to take out a $265,000 mortgage. At current rates, that £54,000 would only get us about $108,000, increasing the mortgage we need to take out to $292,000.
The cost of the fall in the exchange rate for us personally would have been $27,000 in extra borrowing needed, and that pales once you look at the interest you need to pay over the life of the mortgage.
But is it all bad news?
There is a pale glimmer of good news in amongst the pain – and that is – it’s cheap to buy goods from other countries. We have spoken before about the hundreds of $$$ we save at Christmas by buying books from Amazon.co.uk rather than already overpriced NZ bookshops.
But this week, we saved about $140 on an amazingly cool purple Lightsabre (Mace Windu for my fellow geeks), courtesy of ThinkGeek.com, and the otherwise crap exchange rate.
From Reel Collectibles in New Zealand this would cost $329, plus $12 shipping. From ThinkGeek it costs $US99 , plus $US50 shipping. With a margin for the bank – because they can and they will always syphon a bit off, that came to $ 193.97 NZD.
I make that a saving of $147.03.
Or basically, the cost of a second lightsabre. Or 36 coffees for the non geeks. (Star wars Vs Coffee – Star Wars wins – it’s a close call though!)
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Can the Exchange rate actually get any worse?
Filed under: Economics, General Budgeting, Getting to New Zealand
Having lunch with mum the other day, she told me that she had been checking the exchange rate, looking to bring a bit more money over, and seen that it have actually gone below $2 to the £!
She was right. On the third of January this year, the interbank rate was a sickening $1.986 for every £1.
I actually had a look back to see when it last went that low, but unfortunately first I came across what it was like before it went into freefall.
In fact I had to go back to the earliest date allowed on the charts at HifX, and even going back as far as 1998, the rate for people moving money this was has never been so bad.
On the plus side (I guess) this is an absolutely great time for anyone with $NZ sitting around with nothing to do. You can convert it to £ or $US and wait for the cycle to come round again. Now there are people who claim that this might not happen – that actually $2:£1 might be the new “normal”, but always before these things have worked as a cycle. Oddly you get the same argument with house prices – we shouldn’t this time be expecting house prices to rise again, and we should all get used to lower house values. I’ve noticed these are generally the same people who poured scorned on others who were claiming that there wouldn’t be a downturn in the housing market – that this time would be different.
The thing is human behavior is what causes these cycles – and at some point house prices, interest rates and the exchange rate will start improving. The real problem is that there is no way to tell when that will happen.
Unfortunately this just means that right now it is going to be very hard for most people to emigrate if they are relying on fund from their home countries. I thought we were hard done by when we moved and were getting a paltry $2.50! You notice when it was nearly $4 to the £? Thats when there was a huge spike in immigration to New Zealand – whereas at the moment, immigration is pretty low.
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Watching the exchange rates like a hawk.
This is one of the many banes of the Migrant life: when to move your hard earned cash over to your new country. The exchange rate has a huge impact on your ability to start your new life comfortably – especially if you plan to buy a house. The difference between $2.50 and $3 per £1 is significant, and gets more so when you are looking at bringing the proceeds from a UK house sale over.
When we bought our house, the rate was sitting at 2.5 – 2.6 which had the effect of meaning we had to take out about $30,000 more on our mortgage that we would need to if the rate had been nearer $3.
We have recently sold some shares: some in £UK which are sitting in our UK bank account, and some in $US which we have as a cheque. Unfortunately, the rates for both currencies are in the floor again. On the plus side, we don’t have a deadline of a house purchase that we need the money for, so having cashed in the investments, we can afford to sit and wait a while and track the exchange rates.
I’ve learned over the past few years that it does no good to look back at your currency exchanges with a view to “if only I had waited a few more days I could have got more.” I think it is much more useful to track the rate on a daily basis when you have money to move, and work out before hand what rate you would be happy with. When the rate gets to that point – move the money and then STOP LOOKING AT THE RATES. It just does your head in otherwise.
I still use HiFX to do all my tracking and currency exchange as you just get more $$$ at the end of the day. Do remember though – you need to set up your account before you need it. It takes time to set up because they have to get ID confirmations, so don’t leave it till the last minute.
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