Taiwan

‘Free Money’: What do you do with it?

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It’s tax season in many countries in the world: U.S., UK, and here in Taiwan, too. It’s time to pony up our share of our ill~ (well?!) gotten gains for the previous fiscal year, and that got me started thinking about ‘free money.’What is ‘free money’? Well, in some cases, it’s really free. You win the money in a competition, you inherit some money, you earn a surprise bonus, a stock suddenly bounces, whatever. This money came to you from the Goddess of Fortune. In other cases, ‘free’ money isn’t quite so free, but still it can be a big benefit.

‘Free money’ like that may come from many places, money that you dropped under the sofa, lay hidden in a bank account that was forgotten about, you loaned to a friend that was unexpectedly returned, a tax rebate… the list goes on. The key point to such money is that it is yours, but it was not available to you to spend or invest until you reclaimed it some how.

The temptation when you find such ‘free money’ is to spend it, because you want something in particular, and didn’t have the money for a purchase. In reality, this is a bad choice, because saving or investing ‘free money’ will always produce a bonus of some kind in the form of interest or dividends or capital appreciation. Also, over several years, such little amounts of ‘free money’ can, in fact, add up to quite a large some, larger than you might otherwise expect.

An example: in 1999~2000 our landlord, for various tax reasons (I don’t quite understand) returned our full year’s rent, that was about $8350. Then when we mortgaged and remortgaged our house a few years ago, because the paperwork took a while, we didn’t have to pay a mortgage payment for one month. That saved about $600. About three years ago, a relation returned our $3,500 loan now that they had the means to do so. Adding up all those amounts, we get about $12K. That’s not bad for free money.

Of course, there have been other occasions when we have received such ‘free money’ in smaller amounts, but the money has been spent or invested without us knowing or being able to account where it went.

So, this year, if you get a rebate or inheritance, don’t go out and buy a boat or a 2nd car or remodel yourself or your house. Think intelligently, and if you really want any of those items, work out a way to get the money from your regular budget. Put the ‘free money’ to use in your investments, whether it is tax free or not. It will add up quite quickly, and produce a loot more!

What kind of ‘free money’ did you receive? How did you manage it? Well or badly? Share your story with us!

Tax time: Review your Income Sources…

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It’s nearly tax time here, and as usual all the banks and financial organizations that you do business with have sent out their paperwork. So now is a good time to review those sources of income.

I received a tax paper from HSBC bank just last week. I took a quick gander at the paper only to discover that the interest that HSBC paid me for last year amounted to just NT$280 for NT$150,000+ deposits (and no, it wasn’t a checking account). That amounts to about 0.2% pa. How little is that? That’s like 3 Americanos at Starbucks.

So I decided to close that account and move that money into an account earning more than 10X that. It’s wise from time to time to check your savings accounts and make sure of the interest rate on each particular account. Banks are well known, especially in the UK and US, for having teaser rates that go down quickly, and some accounts become quite uncompetitive in triple time. So you have to keep checking online or in the newspapers about your bank account’s interest rate, to make sure you’re not losing out. There’s no sense in letting banks make free money off your investments.

Both Citibank and HSBC here offer higher rates than 0.2% on demand deposits, but both of these banks have minimum requirements for deposit amounts. I noted though on closer inspection that in Taiwan, the HSBC minimums were lower than Citibank, but that the Citibank interest rates were much more competitive than HSBC. In fact, HSBC has been running a promotion for their HSBC Direct service that promises to pay much higher interest rates than other banks. And it’s true, the deposit rate is much higher, but when compared to Citibank’s rates, it is about 25% less than you could get with more careful saving.

So it pays to shop around for your banking; it also pays to keep an eye on your savings, too; and don’t be attracted by teaser rates.

Fun making “InvestorBlogger” business cards at 123Print.com

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Do you have a business card for your job? If not, why not? Do you have a business card for your blog? No?! I don’t either. But business cards are extremely handy for giving out. They save you hunting for a piece of paper and a pen to write down a telephone number, they look good, and they give you a chance to “say” something about yourself that may be remembered long after you have been “forgotten”.

So I was wondering what a business card for “InvestorBlogger” might look like, so I made one online at 123Print.com for fun. Take a look!

InvestorBlogger's Business Card

It was relatively painless to create the business card below, though I think I’d like to have a little more advice on design aspects. Sometimes my earlier efforts looked okay, but needed some refinement. Also, some of the designs that they have looked like they were made from old Word graphics files from Word95. The photograph based images looked MUCH better.

So when I meet other bloggers at PostieCon or at Computex in Taipei (hey, John, still do you still “make money online?”!) I’ll be able to whip out my cards, and leave them fumbling for a pen and paper. Of course, if he were really smart, he’d be printing his business cards in time for his trip to Taipei. at 123Print.com. Cool!