How economies effect a foreign teachers salary.

In this article I will discuss how economies effect a foreign teachers salary and I will also touch on why it’s important for you to be aware of it.

Okay, let’s say that you signed a contract early August 2015, you flew out to China by September and you have been teaching and saving your money (for whatever purpose; paying of debts, funding your next trip abroad, saving up for a business venture). Early August 2015, the conversion rate of Chinese RMB to US Dollar was: 1 USD = 6.3 RMB approximately. At this point, you might be saying, what’s the point of all this? Well my friend, you’ll see soon enough.

Now, again let’s assume for the sake of the argument that you are a qualified teacher in your home country and you accepted an offer for 19,000 RMB over a 10 month contract. Now this is the part how economies effect a foreign teachers salary. When you signed up over a year ago, you did your math and calculated you would be getting paid $3K USD per month, giving you a net pay of $30K over a 10 month contract, Great! Fast forward to today, as I am writing this article (6/July/2016, 10:55 AM) RMB hit a record high: 1 USD = 6.959. It’s a record high, that’s great right? NO!

How economies effect a foreign teachers salary.
The graph of Chinese RMB losing value over a period of 12 months.

What this means is that over that period of almost 1 year, the money that you have saved has just lost value be 10%. So, in reality, you didn’t accept a job for $3K per month, you accepted a job that was paying $2.7K per month.

There’s a similar story if you had accepted a job in Malaysia. If you had signed up for a 2 year contract around July/August 2014 where $1 USD = 3 RM (Malaysian Ringgit), you would be surprised to find out for the past year, it has been floating around $1 USD = 4 RM. So last year, all foreign teachers received a 33% pay cut (unless some were lucky enough to renegotiate their salaries).

How economies effect a foreign teachers salary.
The graph of Malaysian RM losing value over a period of 24 months.

So, before you accept your next job offer, consider the state of your target countries economic state and negotiate well accordingly.

Investing in Australia’s property market.

Having been to a place like China, I was amazed at the number of empty buildings and “ghost cities”. My amazement was further climaxed with the news from one of our local Chinese friends who informed us that anyone who buys property in China can only lease the property for 75 years. Afterwards, the land and property goes back to the government.

Initially, that was quite confusing for me as I grew up in a place like Australia. Australia, a beautiful country, a place where you can buy land and it will be forever yours. See, it’s not just the idea of keeping land forever in your name, but in Australia we have the general notion that the value of Real Estate, whether it is land or property that it should “double in value every 10 years”. This is what Australians consider solid “Capital Growth” where we are enjoying both the increase in value of the property and we can also be enjoying higher returns by renting out the property.

If you’re a smart investor, you know where to look, what to buy and when to buy it. Growing your wealth anywhere from 10-20% per year is a common experience.

Now, you might start thinking “well that’s great news if you’re Australian!”. Actually, I would say that Australia is quite “open” to people wanting to invest in the property market in Australia.

In fact, investing in Australia has other benefits like the potential of becoming an Australian citizen. You heard me right, at this moment in time the Australian government is offering an investment visa to people willing to invest $1.5 million Australian dollars (or 7.25 million RMB at this point in time) over four years. It is my understanding that people under this visa  would be eligible to become an Australian citizen after 4 years, having this kind of arrangement can be ideal especially for Chinese parents and families who want to send their kids to prestigious schools and universities in Australia. Even though this opportunity is out there for everyone, I see this as an extra convenient arrangement for Chinese parents who want to invest their money for their kids and grand kids allowing them to have a bright future.

Sources:

https://www.border.gov.au/Trav/Visa-1/891-

http://emergingmarkets.me/guest-article-chinas-aggressive-hunt-overseas-property-yuan-goes/