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Has the stronger Aussie dollar caught you out?
Dean
Posted: Saturday, October 23, 2010 5:19 PM
Joined: 17/06/2008
Posts: 71


Australian yachties with investment and home mortgages are taking a beating right now, interest rates are up and incomes are down because the Australian dollar has gained strength in the past 18 months.**** In the last ten years the preferred salary currency for Australians has shifted between the US$ and the € (In 2001 the Aussie $ was US$ 0.48 and today it is US$ 0.98) (In 2008 the Aussie $ was 0.48 and today is 0.73€)**** At the end of the day it is not how much money you make in Aussie Dollars or which foreign currency you get paid in that matters, it is what you do with the money that counts.**** If I had bought into the real estate market when I first started on yachts I’d be much wealthier.**** For yachties just starting in the business I’d suggest you take advantage of the strong Australian dollar, cut back on your spending while overseas and ignore the merry-go-round world of currency exchange because expensive homes will always be expensive and cheap rental investments will always available to those with positive cash flow.**** Buying an investment property is the smartest thing you can do when you’re on yachts, because it stabilizes your net worth. If the Aussie dollar is down your yachting dollar stretches further and when the Aussie dollar is strong like it is today, your net worth is protected by the equity contained within investments back home.
Nick FTT
Posted: Wednesday, October 27, 2010 10:39 AM
Joined: 11/10/2010
Posts: 1


This post if very confusing while I understand there is massive benefit in owning property I do not understand the concept that you should buy regardless of the currency and exchange rate. There are some quite reasonable saving accounts that while not as solid property cash is always cash and there is always a need for it this would mean that if you ever move off the Dock walk scene you can go and buy where ever it makes sense. This also means that you can send the money home when the Aussie $ is weak and keep it in Euros when the dollar is stronger ensuring that the maximum amount of dollars ends up in your bank account. Hope this helps also rate alerts can be set up with some FX providers to tell you when to move your money. I use: https://www.fttglobal.com/TradingWeb/rateAlertInitiation.do
junior
Posted: Wednesday, October 27, 2010 11:31 AM
Joined: 14/01/2009
Posts: 1026


Sounds correct. Traditionally the dual currency account was the best way for simple guys like us to hedge currency movements. Also ,I think that when you speak with an international businessman, the first thing they will pass on is to be very careful when taking on a debt obligation outside you salary currency.
Dean
Posted: Thursday, October 28, 2010 6:34 AM
Joined: 17/06/2008
Posts: 71


I guess my point is this, while your in yachting and have high disposable income, make an investment choice. Watch the currency rates, but also realize that the most difficult aspect of owning property is getting in the market in the first instance. Cold hard cash can disappear on a whim, whereas taking on a investment like a rental property or home basically forces you to watch your money and think about what your doing now and in the future. Money is freedom, freedom of choice and the most effective means control of your life, outside good health.
 
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