ceemac

Shake It Baby...
Expat's Wealth Health
Have you ever thought about the fact that the health of your wealth is more important than ever when you move abroad and become more vulnerable, financially speaking, because you lose any state support system that you could have fallen back on?

Here


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pldouglas

Member
Expat's Wealth Health
Yup. Its one of several reasons we decided not to move there permenantly.
25 years ago we had very high interest rates here in UK - so high that my mother decided to sell the business and move to cornwall to 'live the good life'. 2 years later they were back because they could no longer afford to live on the interest thier money was getting in the bank, because rates had fallen dramatically.
Lesson learned.
 

de1amo

Member
Expat's Wealth Health
i rented my place out in the uk and still pay all my taxes and stamp --i could afford not to work here but İ enjoy teaching english and it enhances my circle of friends -where i live in izmir there are a couple of English native speakers who are american but we dont mingle--sometimes i do feel i would like to share the odd beer with a kindred spirit but it passes--
 

Saoirse

Moderator
Expat's Wealth Health
well not really cos if you had hundreds of thousands you wouldnt be relying on the interest
 

stevecarol

Member
Expat's Wealth Health
Philip your comment was about living off the interest, not relying on it, there is a big difference.
To rely on something that can change so much is dangerous, but the days of living off your interest are not gone just yet, you just need a bigger investment.
Put 150k in a turkish bank and you can live well off the interest without touching your capital,
Put the same in a british account and its a different matter.
 

hijo

in my own clique
Expat's Wealth Health
..i agree if your getting say 8% interest in turkey ..its still 8% more than the uk ..depending ofcourse how you invest your money in the uk ..in turkey the bubble has burst ..and i do think the interst rates will get lower....:
 

immac

Senior Member Has-Been
Expat's Wealth Health
You always have to be clear that you are only getting 8%+ on Turk Lira accounts, not GB£.
I was reading yesterday that inflation in Turkey is well above expected rates and will probably go up to 9% within two months. There is also significant instability associated with the IMF negotiations. Istanbul Stock Exchange may well fall by 10% within one month. Doom and gloom, maybe, but there is not much about Turkish economy to encourage me to put everything into it.

Ian
 

Yalides

Am I pretty ?
Expat's Wealth Health
Philip your comment was about living off the interest, not relying on it, there is a big difference.
To rely on something that can change so much is dangerous, but the days of living off your interest are not gone just yet, you just need a bigger investment.
Put 150k in a turkish bank and you can live well off the interest without touching your capital,
Put the same in a british account and its a different matter.

Thats right, we save my pensions and live off the interest on our TL accounts quite easily.
 
Expat's Wealth Health
If inflation is still around 8% and a big problem in Turkey,your net interest of probably around the same figure means you are gaining nothing at all!!
Forget the fact that interest rates are still high in Turkey compared to the UK.
If inflation is high too you are merely breaking even!!

Its not what you are getting but merely what you NEED to keep pace with inflation.
£10000 in Turkey now at 8% inflation is worth £9200 in a years time so you need £800 i.e 8% in interest just to maintain the same capital!!!
High interest rates are only good if inflation is low!!!

UK inflation has only just crept over 2% so we only need around 2% interest to break even. If I am getting 4% in an ISA or investment in the UK , whilst it appears low to you in Turkey, its making more money than yours as a figure net of inflation.

You cannot just look at a seemingly high interest rate.
In the 70,s in the UK when inflation was 15% we used to get a pay rise of 17% and think WOW!!!. Looking at it later you realise its only 2%!!

Hijo, 8% in Turkey is NOT 8% more than in the UK in real terms after comparing inflation rates.
When you look at all the free State support in the UK that has been lost,the situation is even worse!!
 
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immac

Senior Member Has-Been
Expat's Wealth Health
I will copy this from the web site as the information is only on for one day - renewed at 11.00 each day. It is the best indicator I have seen to the state of Turkish money markets.

Turkey bonds then go to Daily Market Review:

"Economy

CBRT Expectations Survey, Jan2010-II: According to the Central Bank's 2nd expectations survey for January 2010: 1) The market expects inflation to end 2010 at 7.15% (Previous: 6.9%). This does not come as a surprise following the recent tax adjustments and price hikes. We expect an inflation of 1.8% mom in January while our 2010-end inflation expectation stands at 7.5%. Please also note that we expect to see inflation touching the 9% level in the coming months. 2) The 12-m and 24-m inflation expectations also deteriorated. 12-m expectations rose to 6.8% from 6.7%, 24-m expectations rose to 6.54% from 6.4%. 3) The market expects a policy rate of 8.15% in 12-m: The market expects the policy rate to touch 8.15% in the coming 12-m while we estimate the policy rate to rise to 7.5% as of 2010-end. We also expect 150 bps rate hikes in early 2011. (CBRT's 2010 inflation target: 6.5%, 2011 inflation target: 5.5%) 4) C/A Deficit and Growth: Expectations for the current account deficit for 2010 is at US$21.6bn; well below our estimation of US$33bn. The market's growth expectations for 2010 and 2011 are also lower than ours at 3.9% and 4.4% respectively. We expect a 6% GDP growth for 2010 and 5% for 2011 as well.

IMF: The International Monetary Fund remains in preliminary talks with Turkey about the conditions for a possible loan package, an IMF spokeswoman stated yesterday. Caroline Atkinson, director of external relations at the Washington-based fund, stated that "These are about what would be the key elements of a program and the situation remains as it was: that if the authorities wish to request a program, we can go and have further discussions." She added that the IMF has not -had a mission fielded or requested- from Turkish officials to negotiate details of a loan program. The continuing uncertainty on the IMF front is unfavourable."
 

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