Job Discussion Forums

[ls650]

I think some are missing the Sergeant's point:

[Stephen Jones]

The figure for $300 invested at 8% over 30 years is $447,000. You use the FV (Future Value) function in Excel to calculate it.

For $100, which is the figure you suggested, at 8% you get $149,000 and at 5%, which is a reasonable rate for investment in bonds, you get $83,000 and probably that will be worth about $60,000 after inflation.

8% is not a modest return if you start investing now at the height of the housing boom, and with a high stock market as well. The stock market has been known to not even recover to its original high over a 30 year period.

Then there is the bane of the small investor (and at $100 a month you are the minuscule investor) and that is management and currency conversion fees. You are probably going to be investing in a managed fund of some kind, as peanuts won't let you invest directly. You may well find tha the management fee eats a fair bit of profit, and currency commission eats most of the rest. A friend of mine invests in an Australian fund; he pays commission on converting into Australian dollars from the currency he earns in, and then commission again converting from Australian to US dollars.

I'll repeat my original point; EFL can provide a great lifestyle, or a moderate middle-class existence, but not both at the same time.

[guangho]

[Sgt Killjoy]

I'm sorry, maybe it's more productive to complain about your lot in life and your choice of career than actually do something positive about it. Sorry for the offer of ideas!

[sidjameson]

Most 40 year old grads back home have had enjoyed massive house price inflation and are earning double, treble or more than their starting salary.
Most 40 year TEFLers don't own a house back home and many are earning little more than what they started out on.

How many TEFLers are relying on their inheritance to save the day?

[Deicide]

Work till you drop or get out of TEFL and get a job with a pension plan that makes retirement plausible...

[thrifty]

Amen to that.

[Stephen Jones]

[Atassi]

[yaramaz]

I'm able to save a lot more than my friends back home who have regular jobs- teaching, nursing, office, etc. They are still renting, maybe paying off car loans (because it's hard to live without a car in parts of Canada), dealing with a higher cost of living. My salary here is comparable if not more than theirs (because of taxation). I dont need or want a car. My daily costs are low, but I don't feel deprived in any way. My savings are very healthy. My accountant back home says they are unusually high for someone my age. I don't think things are so rosy in the homelands or in the 'normal jobs'...

[Stephen Jones]

You can save plenty more, but then I doubt if you are having an lifestyle many will envy.

I actually quite like my job and lifestyle in Saudi, but there are not hordes of envious Brits and Yanks queuing up to take my place (which considering how much longer I'll have to work is probably a good thing).

People don't take up TEFLing to end up working in the Gulf, or in an industrial city in Korea in order to keep the wolf from the door. And in the countries that are pleasant to live in it is difficult to save enough for a comfortable retirement as well as buying a house.

There are people doing fine out of tefling; those that had good savings, or maybe simply a house that they could rent out for more than the mortgage, can do great, as tedkarma has done. Those who can get a state or respectable private teaching or university job in the country they wish to settle down in will do OK (though they'll obviously be behind their counterparts that have lived in the country all their lives).

[globalnomad2]

Stephen, I don't agree with you on investing peanuts. In the US you can invest as little as $1000 initially (usually 2000-2500) and you don''t need managed funds. I have done some research and found that for my purposes, the best asset allocation in funds will be stock and bond index funds. One reason for this is that 95% of US managed funds underperform the stock market.

The index funds in my portfolio are no-load and low-cost because they are not managed other than to keep them at par with the various indexes. If you go to Vanguard.com, the company that pioneered index funds, they have an online quiz that recommends your asset allocation depending on personal factors such as age. It is designed for Americans, since you have to be a US citizen with a US bank account, but the principle is perhaps the same. Here is what my allocation looks like:

Vanguard Total Stock Market Index Fd 45% (domestic stocks)

Total International Stock Index Fd 15%

Total Bond Fd taxable 40% (or Taxable long-term Bond Fd)

"total" in this case means a broad representation of all US stocks, US bonds and international stock markets worldwide. The reason behind 40% bonds is that when stocks go down, bonds are supposed to go up, and vice versa, but I need to outweigh the bond allocation 60-40 to be slightly more aggressive.

These funds are guaranteed to match the indexes, of course.

By the way, it may be true of some stock markets that they don't recover in 30 years, but the 1987 stock market meltdown recovered in a few years, and so did the Asian crisis of 1997-98.

If $300 a month yields only $477,000 after 30 years, perhaps $600 will result in $1 million. But I don't understand the Excel calculation because I have seen from financial gurus for years and years how a very small amount--I thought it was about $300-350--yields $1 million. Not being good with Excel, I suppose I should break out the calculator and punch the same keys 30 times. Furthermore, although your stocks might rise an average of 8% per year, those increases are compounded daily. The idea is to dollar-cost-average: i.e., put the same amount in month after month, (until you choose to INCREASE the monthly amount) whether stocks are going up or down.

[thrifty]

[thrifty]

[quote="Stephen Jones"

[Atassi]