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What does losing during exchange actually mean?
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Sir John Hawkins



Joined: 07 Nov 2008
Location: Ulsan, SK

PostPosted: Thu Nov 20, 2008 9:34 am    Post subject: What does losing during exchange actually mean? Reply with quote

I keep reading on won posts about how people are losing money if they exchange to US/send money home. I understand that if the won was worth more, we would be making more, but if I send the equivalent of 500 US home....how am I actually "losing" anything?*


*I know I am about to get flamed for a high ignorance level, but the finance department is very low on my bat belt. I understand that When I work for the money it was worth more that when I send home/exchange it...but honestly, I have come to grips with the fact that this isnt getting any better anytime soon (within my time here) and the days of 1000w - 1$ is more than likely, gone.
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Pooty



Joined: 15 Jun 2008
Location: Ela stin agalia mou

PostPosted: Thu Nov 20, 2008 11:17 am    Post subject: Reply with quote

Okay I'll bite. Suppose you were making 20,000 won/hr. 12 years ago, the exchange rate was roughly 760 won to 1 usd. Divide that out and you get roughly 26 usd to send home for 1 hour of work.

If the won is worth 1500 for 1 usd and you still make 20,000 won/hr...that would be 13 usd to send home for 1 hour of work.


Assuming that you came to Korea to save money to pay off some bills, save for a car or a home, your buying power back home just went waaaay down. Although - here in Korea that buying power is almost the same as it was before the exchange rate went south...except for imported goods that is.

For example, I'm a collector - Japanese and American electric trains - If I went to the import store six months ago to price a Japanese imported electric train set, I'd pay 100,000 won for a locomotive. That same locomotive today would cost me whatever the exchange rate is for the Yen right now because the seller has to pay higher prices for the exchange rate and in turn passes that cost on to me, the consumer.

Hope that helps.
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Mr-Dokdo



Joined: 16 Nov 2008

PostPosted: Thu Nov 20, 2008 12:53 pm    Post subject: Re: What does losing during exchange actually mean? Reply with quote

Sir John Hawkins wrote:
I keep reading on won posts about how people are losing money if they exchange to US/send money home. I understand that if the won was worth more, we would be making more, but if I send the equivalent of 500 US home....how am I actually "losing" anything?*


*I know I am about to get flamed for a high ignorance level, but the finance department is very low on my bat belt. I understand that When I work for the money it was worth more that when I send home/exchange it...but honestly, I have come to grips with the fact that this isnt getting any better anytime soon (within my time here) and the days of 1000w - 1$ is more than likely, gone.


You won't get flamed. Nobody could be that ignorant; so we all know flame-bait when we see it.
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Bigfeet



Joined: 29 May 2008
Location: Grrrrr.....

PostPosted: Thu Nov 20, 2008 6:02 pm    Post subject: Re: What does losing during exchange actually mean? Reply with quote

Sir John Hawkins wrote:
but if I send the equivalent of 500 US home....how am I actually "losing" anything?*


The weaker the won, the more won you'll have to send in order for it to convert to US$500.
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Hyeon Een



Joined: 24 Jun 2005

PostPosted: Thu Nov 20, 2008 6:34 pm    Post subject: Reply with quote

But he does have a point. No one is 'losing' anything. You're still earning the same won you agreed to at the beginning of your contract. You might not be able to buy kimbab, baguettes, cheese or US dollars as cheaply as you could in the past, but you haven't "lost" anything.

Someone saying "I lost $500 yesterday by sending money home" isn't making any sense.

Saying that the exchange rate is sub-prime for Americans at the moment makes sense. But saying that one is "losing" money is sloppy English really.

Oh also people seem to keep getting "stronger", "weaker", "rise", "fall", "gain" and "lose" confused when talking about currencies. Sort it out people.
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dossi



Joined: 19 Jun 2008

PostPosted: Thu Nov 20, 2008 6:35 pm    Post subject: Reply with quote

I appreciate your perspective John and some of us need to realise that this affects everyone, not just English teachers. People are getting laid off everyday around the world, everyone is losing in some way.

Some of us are being squeezed out because of currency exchange rates, but think of how it could affect someone who will be out of work for a long period of time.
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greekvvedge



Joined: 19 Jun 2007
Location: Apkujeong

PostPosted: Thu Nov 20, 2008 6:36 pm    Post subject: Reply with quote

whatever you want to call it, its still bad for an American who has bills to pay.
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Straphanger



Joined: 09 Oct 2008
Location: Chilgok, Korea

PostPosted: Thu Nov 20, 2008 6:40 pm    Post subject: Reply with quote

greekvvedge wrote:
whatever you want to call it, its still bad for an American who has bills to pay.

I'm an American with bills to pay, and I still don't care. My cleaning lady still gets 130k a month, a rack of short ribs is still 6K, rice is still 1K a pound or so. My lifestyle has not changed.

Things only change for people stupid enough to buy dollars with won right now.
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greekvvedge



Joined: 19 Jun 2007
Location: Apkujeong

PostPosted: Thu Nov 20, 2008 6:44 pm    Post subject: Reply with quote

Straphanger wrote:
greekvvedge wrote:
whatever you want to call it, its still bad for an American who has bills to pay.

I'm an American with bills to pay, and I still don't care. My cleaning lady still gets 130k a month, a rack of short ribs is still 6K, rice is still 1K a pound or so. My lifestyle has not changed.

Things only change for people stupid enough to buy dollars with won right now.


well, not all people are stupid enough to buy dollars, they HAVE to do it to pay bills, as I said. Now, I have to send a few hundred home every few months, so it's not that bad for me. But the people struggling to pay bigger bills more frequently, that sucks. They don't have a choice but to lose money. and LOTS of it.

and in any case, i'd rather be making more than making less. Especially when that amounts to 1/3 less.
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TDR



Joined: 07 Feb 2007
Location: Busan

PostPosted: Thu Nov 20, 2008 6:47 pm    Post subject: Reply with quote

Hyeon Een wrote:
But he does have a point. No one is 'losing' anything. You're still earning the same won you agreed to at the beginning of your contract. You might not be able to buy kimbab, baguettes, cheese or US dollars as cheaply as you could in the past, but you haven't "lost" anything.

Someone saying "I lost $500 yesterday by sending money home" isn't making any sense.

Saying that the exchange rate is sub-prime for Americans at the moment makes sense. But saying that one is "losing" money is sloppy English really.

Oh also people seem to keep getting "stronger", "weaker", "rise", "fall", "gain" and "lose" confused when talking about currencies. Sort it out people.



I always understood it to mean "I lost $500 [compared to XX date/ compared to when it was XX rate] by sending money home yesterday." But I do see your point.

-TDR-
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Straphanger



Joined: 09 Oct 2008
Location: Chilgok, Korea

PostPosted: Thu Nov 20, 2008 6:52 pm    Post subject: Reply with quote

greekvvedge wrote:
well, not all people are stupid enough to buy dollars, they HAVE to do it to pay bills, as I said.

Oh, I'm sorry for calling you stupid then... you're just poor!
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T-J



Joined: 10 Oct 2008
Location: Seoul EunpyungGu Yeonsinnae

PostPosted: Thu Nov 20, 2008 7:00 pm    Post subject: Reply with quote

Straphanger wrote:
greekvvedge wrote:
well, not all people are stupid enough to buy dollars, they HAVE to do it to pay bills, as I said.

Oh, I'm sorry for calling you stupid then... you're just poor!


Still paying a mortgage in the States. The fluctuation in currency exchange rates is difficult and stressful.

I don't disagree with those that feel they are "losing money", especially those that came here specifically with one year in mind.

For myself, it just costs more or less depending on the exchange rate, I don't consider it to be losing money, just costing more.

The up side is that our home in the States is in an area that hasn't been effected by spiraling home prices. And just like the "your not losing" argument, it is where I plan on living, so the resale value of the home is secondary.
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Return Jones



Joined: 06 Feb 2004
Location: I will see you in far-off places

PostPosted: Thu Nov 20, 2008 7:11 pm    Post subject: Reply with quote

It means when won is exchanged to our home currencies, we're pretty much all making less money now then we were five years ago. I know I am even though my Korea salary is much higher. Sucks balls bad.Mad
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mistermasan



Joined: 20 Sep 2007
Location: 10+ yrs on Dave's ESL cafe

PostPosted: Thu Nov 20, 2008 7:29 pm    Post subject: Reply with quote

during my time, the won floated around 1000won to 1 US$. it was real easy to keep track: 2 million won = 2000 US $ circa March 2008.

fastforward to nov 08 and the same 2 million won will fetch you 1333 US$.

as stated by others, if all your transactions are within korea you are pretty much same-same, but if you have to remit funds for "backhome" expenses...the purchasing power of the 2 million won korean wages stateside is currently worth 666 US$ less than it was about a half year ago.
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Juregen



Joined: 30 May 2006

PostPosted: Thu Nov 20, 2008 7:52 pm    Post subject: Reply with quote

The exchange rate indeed only affects you when you send money abroad.

For those who don't and can wait out the storm (which is undefined), the current situation is not that bad.

The problem is that it is very difficult for hagwon owners to pump up wages due to price instability. Lets suppose they agree upon a wage increase of lets say 20%, if the won normalizes again, it are the owners who are screwed.

So there is currently no incentive to increase wage.
Another deterrent is that Unemployment rates are rising ALL over the world, rising Unemployment is never met with raising wages.

So you have to make a decision, shall I bail out in these unsure times and go home and try to get a job, or do I commit to the situation and hope that once the market stabilizes again, it is close to the starting conditions.

So stop complaining, decide what is best for you and go for it.
Don't whine incessantly on internet boards, you sound like children who haven't the faintest clue what to do with their lives and want to get payed doing nothing ......
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