Korean Job Discussion Forums

[feed_that_cat]

Has anyone else noticed, or is it just me? Am I misinformed? Do tell.

The U.S. dollar seems to be/have been gaining quite a bit against the Korean Won. Anyone working in Korea, to save money to bring back to the states, should take/have taken note. It seems that the exchange rate has not been in the favor of U.S. citizens working in Korea lately. Please correct me if I am wrong. It seems that the U.S. dollar has gained a full 10%, against the Won, in the last 4 months! This means that if you currently are earning 2.5 million Won monthly, your salary has been cut about $250.00USD a month from what it was back in late January. That is if you change all of your Won to USD.

If you are saving money to take back home to the U.S., things look worse. Let us assume that with the above salary, during the month of January, 2008, you managed to put away $1,000USD. You will now still be making your 2.5 million Won salary. Because of bad luck with the rising U.S. dollar, your $1000USD saving per month has been drastically cut. You have lost 10% of your salary, but could lose up to 25% of your savings.

If you live the same lifestyle, in Korea, that you have been living since January, you will be spending the same amount of Won, now, that you have been spending each month. Nothing will change with regards to your lifestyle. When the end of the month comes, and you want to exchange your left over Won into USD, you will take about a 10% cut. At that time your 1 million Won will not be worth a bit more than $1000USD, like it was in January, it will only be worth a little more than $900USD.

However, if you spend your months buying items from the U.S., or paying debts, bills, etc... in the U.S., you may be hit even harder. Your monthly salary will not go as far, now, as it did in January in relation to your overseas expenditures. If you found that after using the majority of your earnings to pay off stuff in the U.S., you may have been able to save $1000.USD a month in January. You may only be able to save $750.USD now. This would be a blow of losing 25% of your end-of-the-month savings. This would only happen if you had spent most of your pre-savings dollars to pay off U.S. debt/purchases. Each $100USD that you pay now will cost you closer to 110,000 Won. Back in January your credit card payment of $100.USD cost your about 100,000 Won. At the end of this month, you now find that you only have $750USD in your pocket rather than the $1,000USD that you had anticipated. This happened because every time you spent USD to make a payment, you paid 10% more than you had in the past. You did not think about it, because the cost to buy, or pay for something in USD$ did not change, from what it had been in previous months. Somehow at the end of the month you felt like you were missing $250USD out of your usual $1000USD savings. 25% GONE!

Wow!

This is something to consider when accepting jobs, saving your earnings, and bargaining for higher pay.

[the ireland]

if you get less dollar for the won than you were getting before it means the dollar has become stronger not weaker.

great theory who have going but your initial argument is flawed by that minor detail

[kingplaya4]

It's worse than what you lay out because particularly imported but also Korean products have risen in price because of the won's fall. So it costs us more every month to buy our weekly groceries in Korea.

This has been planned however. Lee Myung Bak wants a weaker won because Korea is an exporting nation. The only problem is the country has no raw materials which increase in price when the won falls. I assume he knows what he's doing and the more expensive oil and consumer goods are worth more Hyundais and samsung cell phones being exported.

[lastat06513]

Easy solution; Don't exchange into dollars until the time you leave......simple as that.............

[feed_that_cat]

Thank you for the input guys.

If you plan on saving $10,000 USD in a year, and you wait until you are ready to leave Korea, to change the WON, you may come out with only 8,900 - 9,000USD.

If you start teaching now, and the dollar continues to gain at this rate or faster, your anticipated $10,000 USD savings may actually be $8,000 USD.

[Ramen]

Dollar is not gaining. US$ is still crap against other major currencies except sparkling Korean won.

[jim_we]

Biggest problem is the Japanese Yen carry trade. Lots of money was invested in Korea at low rates that must be taken out to cover liquidity problems. Too much cash, too few quality places to put it. Medium term, buy Japanese Yen or Swiss Francs, even better buy gold (best choice) or silver if you are able to. Combined with high oil prices and the USA buying less of Korean goods, the Korean economy will take quite a haircut...........just like most countries.

Lots of parallels to the pre-1997 Korean crash now. But it's going to be even worse this time, much worse. The economy probably will crash this fall just after the Olympics, and I expect lots of teachers will leave Korea in droves (just like they did then). There are too many crappy hakwans and crappy teachers now, just like then. The herd needs to be trimmed, and it will be. The crash will last minimum of a year and a half to several years.

I expect some of the longest staying foreigners will be South Africans, they don't have a lot to go back to. Fortunately, many of these whinging Canadians will leave just like the last time. What a bunch of crybabies!

Read the threads about those who stayed thru 1997 and prepare. If you're not prepared, tough shit! Prepare or the next couple of years are not going to be pretty. And for all the whingers who leave...........good riddance, espcially the cry baby Canadians!

[Mr. Pink]

Yup, salaries are not going up, however, considering the exchange rate and inflation on certain goods, I have taken a 10% pay cut.

It is obvious that the new Korean president doesn't know shit on how exchange rates work, as he thinks flooding the world with cheaper Korean exports is the way...I guess he flunked economics or business where they studied how countries like Korea with no natural resources need to import everything to make those exports...which they have to pay more for, which increases the prices, which makes the value of the won...

you get my point.

[kiwiduncan]

[Davew125]

my knowledge of the markets and their patterens is pretty minimal. Does anyone how likely a favourable change is and what the factors to watch out for might be.

Whats the worst the exchange rate has been ( im changing money to UK pounds ) in the past few years?