where s the flaw in my plan

de1amo · 15 February 2011 at 5:20PM

i currently have savings in the uk and i am contemplating moving a chunk of them abroad to where i live -the pound is nearing 4 year highs and interest rates abroad where i live are about 6pc net/
My mortgage will equate to the income from interest at 6pc on th chunk-its currently on a svr 2pc -in the uk i draw an occupational pension which comfortably covers my mortgage and outgoings on my property=i have homes and business abroad which are buoyant outside the eurozone--im sure there is a flaw

bendix · 15 February 2011 at 5:41PM

The biggest flaw I see is that based on the randomly assembled words above, noone will have a clue what you're talking about.

Hughesy84 · 15 February 2011 at 6:00PM

The flaw is the land which you have your foreign buildings on isnt actually owned by you and in 5-10 years some dodgy government will probably reclaim the land off you and knock it down....hows that?! lol just kidding!

bendix · 15 February 2011 at 6:30PM

Hughesy84 wrote: »

The flaw is the land which you have your foreign buildings on isnt actually owned by you and in 5-10 years some dodgy government will probably reclaim the land off you and knock it down....hows that?! lol just kidding!

How do you know what country he has houses in? Many overseas countries allow full ownership of land by foreigners.

This is just my point. The nonsense in the OP is completely useless to give us any sense of spotting the flaws. What is the mortgage for, for example? A UK house, or his overseas properties.

Honestly, you can't help some people because they're incapable of articulating the most simple information coherently.

VT82 · 15 February 2011 at 7:07PM

The flaw in your plan is the currency risk you will be taking.

The markets operate to remove the arbitrage opportunities like you are describing. If you can get 3%pa for 3 years on sterling but 10%pa for 3 years on Zimbabwean dollars, that suggests that there will be higher inflation in Zimbabwe than in the UK.

If you wanted to hedge this risk, so that you can guarantee the exchange rate for turning your zimbabwean dollars plus interest back into sterling after three years, the forward exchange rate you will be offered will reflect the expectation that inflation will have devalued the Zimbabwean dollar in the period. The rate you will be offered will mean your return will be equivalent to having invested in sterling at 3% all along.

By not hedging this risk, you are taking currency risk. You might be happy to do this, particularly if you will not want to own sterling again in the future.

McKneff · 15 February 2011 at 7:17PM

bendix wrote: »

The biggest flaw I see is that based on the randomly assembled words above, noone will have a clue what you're talking about.

:rotfl::rotfl::rotfl::T

de1amo · 16 February 2011 at 12:49PM

Isnt it amazing how vt82 can comprend and articulate a decent reply to my question-whereas some people deem themselves to be some sort of professor of money savings expert and have to pass comment when in fact they have nothing constructive to say-other than snipe!

thank you for your answer Vt it has answered my question and i will keep my funds in the uk because the only debt i have is in the uk and will eventually need paying off.

For info i have 2 homes and a business which are owned outright on a freehold basis and protected by my wifes status as a native and the fact i have dual nationality -Im in turkey which has a gdp of about 9+ and its constantly sunny-i do struggle with my typing here because my computer is programmed with a turkish keyboard.

i am at a loss of what else a mortgage can be used for in the uk. my signature says mfw 55000 -i dont include any of my foreign holdings because they arent relevant to a uk site

missile · 16 February 2011 at 1:24PM

If you intend to continue living in Turkey for the forseeable future, then IMHO it makes sense to have your savings there.

de1amo · 16 February 2011 at 1:33PM

Thats how I was feeling yesterday because i have the usual requirements here*like a new car*10k but for normal income each country stands alone but i just see one day the mortgage which is IO will need clearing and VTs mail seemed to support the non transference!-now i am all confused lol

bendix · 16 February 2011 at 1:41PM

You never mentioned your house was in turkey. You never mentioned your mortgage was in the UK, nor the house attached to it. It is easy to have mortgages in the UK for houses overseas. It is equally easy to have mortgages overseas for properties overseas.

That is my point. The information posted in the OP was completely useless to provide a meaningful reply. VT82 made some assumptions, and luckily got them right.

As for mfw 55000 . . how would anyone know what it means? It's not an acronym i've ever heard of.

de1amo · 16 February 2011 at 1:51PM

mfw is the standard acronym for mortgage free wannabe-'it is used on every thread in that part in the uk mortgage of the forum- i dont mix my turkish finances with my uk because i like to keep things simple here-i dont have any loans abroad i just pay in cash because the interest rates are ludicrous--my business is healthy enough to build income without banks-my mortgage in the uk is only 25pc ltv but it is the only debt i have.

where s the flaw in my plan

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