Asia or Europe for long-term financial stability
Asia or Europe for long-term financial stability
Where would you go if you are in your late thirties and if you had to choose between Asian savings and European pension?
Discussion
It would depend what my career path would be. If admin was a career option Id go to Asia, its a faster climb to admin. For a teacher it depends what the offer was. If it was a high enough tier school that I could retire out of that country, then Europe. Social pension options are no better in WE if your bouncing around counties. The other issue is self discipline In WE you pay high taxes but your building the pension, it takes no self discipline to do. In Asia you get nothing except an annual bonus if you invest that and you invest your savings and live frugally you could have more fun in Asia and have a decent supplementary portfolio in your retirement.
The rule though doesnt change, you really need to get to WE at some point to retire out of IT, its not if its when.
The rule though doesnt change, you really need to get to WE at some point to retire out of IT, its not if its when.
Re: Asia or Europe for long-term financial stability
Depending on where you are in Asia surely you could retire out of there too. I'm starting in Malaysia in August and, based on paying in £10000 a year to the EPF fund and assuming the long term average interest of the fund being 6%, I'll be walking away with a lump sum of close to £800,000 before I turn 60. Notwithstanding the rest of my salary which is enough to save additional cash and funnel it back into the UK, probably meaning I'll be able to invest in 2 or 3 properties I can rent out for additional income. That's without adjusting the amount I can pay into the EPF for inflation and pay rises as well.
Admittedly the position I've been offered is probably towards the higher end of the salary/package spectrum but it's not silly money.
In response to the OP I imagine, like most things, it depends on the level of school you get into, your lifestyle and what your spending habits are. WE isn't for me, I prefer the food, weather and travel options in Asia so I'm heading East. For others it'll be the total opposite. But 90% of the task is getting a gig in a quality school - the rest takes care of itself.
Admittedly the position I've been offered is probably towards the higher end of the salary/package spectrum but it's not silly money.
In response to the OP I imagine, like most things, it depends on the level of school you get into, your lifestyle and what your spending habits are. WE isn't for me, I prefer the food, weather and travel options in Asia so I'm heading East. For others it'll be the total opposite. But 90% of the task is getting a gig in a quality school - the rest takes care of itself.
-
lookingforlefty
- Posts: 35
- Joined: Tue Mar 04, 2014 12:15 pm
Re: Asia or Europe for long-term financial stability
Which countries in WE have generous pensions that you qualify for after some years? I'm in Europe and I'm not getting anything worth caring about.
My understanding is that you have to be in for a long time before your pension starts to count up or be accessible to you. I'm not sure if I'd trust my retirement to the proposition that an IS will keep me employed for 10+ years. Too many variables. Is this a concern at the better WE schools?
My understanding is that you have to be in for a long time before your pension starts to count up or be accessible to you. I'm not sure if I'd trust my retirement to the proposition that an IS will keep me employed for 10+ years. Too many variables. Is this a concern at the better WE schools?
Reply
@pds86
Those are some pretty maximized assumptions. The ROI on small cap stocks is about 6%, med cap 5% and large cap 4%. Bonds are at 4% on the high and 3% on the low. Cash instruments are doing 1%-2%. Your formula assumes you can persistently get very high yield returns and the risk assessment doesnt support that kind of long term yield.
Aside from that your looking at a lost of discipline, and its ALL your money your investing, its not a defined benefit and their is not employer matching or otherwise contribution.
@lookingforlefty
NE mostly, Sweden, Finland, Norway are very strong. Italy has it where you can retire the soonest but the country is broke and that retirement isnt worth anywhere close to what people were sold. Spains in the same boat, just slightly less broke. Germany is pretty good but you have to wait a long time. France is probably the best in the WE right now, but those schools are some of the hardest in the world to get into, and sometime in the near future France is going to have to do some restructuring of its pension system. Belgium isnt far behind.
Those are some pretty maximized assumptions. The ROI on small cap stocks is about 6%, med cap 5% and large cap 4%. Bonds are at 4% on the high and 3% on the low. Cash instruments are doing 1%-2%. Your formula assumes you can persistently get very high yield returns and the risk assessment doesnt support that kind of long term yield.
Aside from that your looking at a lost of discipline, and its ALL your money your investing, its not a defined benefit and their is not employer matching or otherwise contribution.
@lookingforlefty
NE mostly, Sweden, Finland, Norway are very strong. Italy has it where you can retire the soonest but the country is broke and that retirement isnt worth anywhere close to what people were sold. Spains in the same boat, just slightly less broke. Germany is pretty good but you have to wait a long time. France is probably the best in the WE right now, but those schools are some of the hardest in the world to get into, and sometime in the near future France is going to have to do some restructuring of its pension system. Belgium isnt far behind.
-
lookingforlefty
- Posts: 35
- Joined: Tue Mar 04, 2014 12:15 pm
Re: Asia or Europe for long-term financial stability
I know someone who spent quite a while in Norway, which might be the most expensive places in the whole world. After the first two years he was getting killed with taxes, supposedly to support a social pension scheme, but since he's not Norwegian he doesn't get any. Not a good situation from what I could tell.
Reply
@lookingforlefty
He didnt stay long enough then. He would have been able to get PR after three years and CTZ after seven, either one would have allowed him to collect a pension.
Norway isnt the most expensive place to live, its second, Switzerland is the most expensive.
He didnt stay long enough then. He would have been able to get PR after three years and CTZ after seven, either one would have allowed him to collect a pension.
Norway isnt the most expensive place to live, its second, Switzerland is the most expensive.
Re: Asia or Europe for long-term financial stability
No assumptions beyond looking at the average interest rate applied to the EPF over the last 60 years or so. Easily googled and if you look at the rates you'll see I'm right. I think that's a fair assumption and 10000 per year would be nowhere near all the money, nor would the savings I'd funnel back to the UK. I've costed it pretty thoroughly and it works along with giving me plenty to spend on holidays etc.
Re: Asia or Europe for long-term financial stability
Also it is a defined benefit. I've just converted it to a cash amount for ease of understanding and to save myself from sharing my gross pay.
-
tommypizza
- Posts: 58
- Joined: Fri Aug 26, 2011 11:35 am
Re: Asia or Europe for long-term financial stability
definitely Asia...if you are looking to save money...nuf said
Discussion
@pds86
Thats a poor assumption actually, thats what every scammy investment adviser points too when they want to sell their product. The global trend of capital gains investments over a long period of time. Since regression to the mean makes the average seem far more stable than the tails. No one though can capture the ROI of the global longitudinal average, you cant buy that product (mainly because you cant really invest for 60 years or longer), It just doesnt work that way. To begin with the higher end of that ROI 6% comes with commissions and management fees dropping the ROI to at best 4% and thats with some considerable risk. The no load and no fee index funds dont do better than 3%, so your return is really about half what your anticipating.
@tommypizza
No, ME is the best to save money, unless your in a major city and like shopping there is little to spend it on, and high salaries are easier to get. Its the only thing the ME has going for it.
Thats a poor assumption actually, thats what every scammy investment adviser points too when they want to sell their product. The global trend of capital gains investments over a long period of time. Since regression to the mean makes the average seem far more stable than the tails. No one though can capture the ROI of the global longitudinal average, you cant buy that product (mainly because you cant really invest for 60 years or longer), It just doesnt work that way. To begin with the higher end of that ROI 6% comes with commissions and management fees dropping the ROI to at best 4% and thats with some considerable risk. The no load and no fee index funds dont do better than 3%, so your return is really about half what your anticipating.
@tommypizza
No, ME is the best to save money, unless your in a major city and like shopping there is little to spend it on, and high salaries are easier to get. Its the only thing the ME has going for it.
Re: Asia or Europe for long-term financial stability
Do you know what the EPF is?
Reply
@pds86
Its the Employees Provident Fund, its a government managed pension and social disability fund . Governments are not immune to market errors and variances. There is nothing to guarantee its success, nor warranted against it. Various countries have variations of "Provident Fund" programs.
Its the Employees Provident Fund, its a government managed pension and social disability fund . Governments are not immune to market errors and variances. There is nothing to guarantee its success, nor warranted against it. Various countries have variations of "Provident Fund" programs.
Re: Asia or Europe for long-term financial stability
Switzerland, if you can get a job in one of the non-profit schools. Low tax, excellent pension and good savings...
Re: Asia or Europe for long-term financial stability
@Ddd
Which of these would you recommend for strong savings? IS Lausanne, IS Geneva, or Zurich IS?
Which of these would you recommend for strong savings? IS Lausanne, IS Geneva, or Zurich IS?