I haven’t changed my spending too much as I’ve never had any credit cards or owned any cars. I have no cable now, though, and I’m trying to stay out of 7-11.
The drop in the exchange rate is a wonderful gift, though, and I’m feeling the joy of the easier mortgage payments, too. I’ve started working on an emergency fund in case I lose my job, but if I don’t lose my job I’m actually going to be better off until the recession ends and the exchange rate goes back to normal.
Viva Recession Viva!
It’s boosted my workload. In bad economic times, people apply for MBAs in droves, thereby increasing my business.
But my mutual funds have gone down down down. But I’m holding onto them long term…
I suppose one thing that’s changed is I eat at Belgian Pie’s more often. 
My wife has lost approximately 50,000-80,000 US in the stock market in Taiwan/North America. We’re not cashing out our poor performing stocks, so it’s only a paper loss to date, and we still plan on keeping 'em long term. Furthermore, we also bought a new apartment and prices have fallen by about 5 to 8 percent since the purchase. Funny thing is–I don’t feel bad at all. We’re looking to the long, long term and even if this recession/depression takes 2 or 3 years to correct itself and the stocks takes 10-15 years to rise back up to old price highs, I think 20 or 30 something investors shouldn’t be too worried about this. In fact, it is a good time to buy more with prices so low. I have balanced our risky investments by buying more government bonds and other low risk investments.
I truly feel sorry for the people in their 60s that had too much tied up in investments/mutual funds/pension schemes and will now have to work 5 or 10 more years (now that mandatory retirement restrictions have been lifted in many North American jurisdictions). Luckily, it hasn’t hurt my retirement-aged parents. They have a safe retirement pension and put all their investments in ocean and mountain properties and got out before the real estate crash.
It’s all about timing, and I’m glad we made these mistakes in our youth and not near retirement. Has it affected our consumption patterns? Nope. Wife is as cheap as ever. 
Still complains about giving me a 20 dollar/week allowance or if I go through rolls of toilet paper too quickly.
I was in the restuarant the other day an overheard the next table over discussing their wine selection with the wine steward. I know it is pretty hard to have sympathy for someone who can no longer afford a $500 bottle and must go with the $150 bottle for dinner (boy he must be roughing it… ), but even the well off are not left unscath from the blood bath these days.
Well, great!
How is the economy supposed to recover when everyone stops buying stuff? That’s exactly how things will get worse. I think people should focus on smart investments, there are a lot of opportunities too. Buy things while you can get them cheap. Support the industries who need the money most, etc.[/quote]
Isn’t this paradigm of consumption what got people in this problem in the first place?
[quote=“mike_rophonechecker”]Has a recession been officially declared in Taiwan? Has there been a reduction in growth over two quarters? I must have missed something.
That said-two thoughts come to mind.
- Saving money is not always the wisest move in a recession. Are the banks passing on interest rate cuts to savers? I don’t think so. Putting some money aside for a short-term change in consuming behaviour is a good idea though.
- Changes in consumption. This is an excellent thing, and one of the positives of recession. People wind their extravagances in and start to live less wastefully. Using the car less, making your own coffee etc are all habits you could adopt on a regular basis without cutting into your I’m worth it factor. The poster who has stopped eating that organic nonsense has made the biggest leap of all. Bourgois bohemians need to be taught a lesson or two, and the middle classes need to kerb their conspicuous consumption addictions.
So while you adjust to the economic slowdown in Taiwan ask yourself: Shouldn’t I being making these changes anyway?[/quote]
Yes, yes, yes.
I’m not changing my lifestyle because of any recession. I’m always on the lookout to improve my situation, both in terms of making money/investing and saving money on spending. Good decisions are good decisions regardless of the times. Likewise with bad decisions. I live a fairly simple lifestyle, one that most people in the world would still be envious of, but I don’t think I indulge myself too much. There’s too much of the “I’m worth it” factor in our modern societies, and maybe this recession will give people time to re-evaluate what’s really important in life. My girlfriend cooked lunch for me yesterday, I cooked with my best friend last night, and I’m cooking for my girlfriend for lunch today. The company and food were good. Why pay a premium for that then by going out to eat?
As for the talk about investments:
“Bear markets are when shares return to their rightful owners.” – Warren Buffett.
This past year was really rough financially, not because of any recession, but because of a whole lot of missed income, medical bills and unanticipated flights we had to pay for. It killed our “nest egg” and made us curb our spending quite a bit. We had plans to buy the house we’re currently renting, and to do renovations on it, as well as to buy a new car when the money started coming in again, but we’ve curtailed those plans in light of what’s happening around the world. We’ve also cut back on food and recreation costs, but not so that we’re not living our lives or anything.
It’s great that spending boosts the economy, but in this particular recession, isn’t that what brought it on? People were spending beyond their means and had to forclose (en masse) when the cost of living escalated… rather than falling into that trap just yet, I’ll spend what I comfortably can and try to save as much as possible for a rainy day. (We’re English teachers, and I think the English lessons for the kiddies will be one of the first things to go if Taiwan’s economy gets any worse; hopefully I’m wrong.) I don’t want to get all spend-happy to boost the economy and then be left with absolutely nothing when it crumbles.)
In response to the OP, and to echo other posters: what recession? I haven’t heard the “R” word being officially used in relation to Taiwan, and in Canada we’re still not officially there either. Not to say that things aren’t looking somewhat grim, certainly, but we’re not “there” yet.
Erm…should my wife and I quit making our monthly contributions to our mutual fund RRSPs? Maybe just put the cash into a savings account, instead? Our RRSPs keep losing value, and we feel like we’re throwing our money away. Heck, with interest rates so low, should we maybe buy a rental property for our retirement? We’re self-employed, so no pension plan will be waiting for us in the future.
This is good for you. I have a salmon steak with your name on it waiting… :lick:
I reckon next year will be a stinker worldwide, but with the NT$ going up so much against the now collapsing £, we seem to be riding it out OK at present. The main thing is to try to keep hold of a decent paying job, then any recession can be of benefit in terms of reduced prices and people not expecting to go out as much. I just hope that the governments around the world are right in predicting a 2009/10 ending. Otherwise, we all could be in for a lot of pain.
No!No!No!
This is exactly the time when it is most important to keep on your normal schedule for contributing to your retirement accounts. Unless you lose your job, or unless you think there is a very high risk of losing it and so you want to build up a larger emergency fund, then do not cut back on your retirement fund contributions. You would essentially be passing up one of the best buying opportunities you will see in your lifetime. And don’t get this idea that you can time the market. Nobody knows how much lower it will go, and nobody knows when it will go back up again. However, if you try to wait until it moves up again, you will very likely miss the days when the market makes its greatest surges upward.
What kind of mutual funds? If your mutual funds are money market funds, then switching to a savings account isn’t much of a change.
If the mutual funds are stock mutual funds, then ask yourself this question. Will stock prices recover prior to roughly 5 years before your retirement date? (you should probably give yourself a five year window to sell these stocks at top dollar and move them into something safer: have this window at the heart of your retirement plan)
In my opinion, stock prices will recover. If you agree, then you shouldn’t worry about sinking RRSP returns on stock mutual funds now. In fact, you should celebrate them as clear evidence of buying low so you can sell high at a time within your window. For what it’s worth, on 01-Dec I switched all of my 401(k) elections to 100% stock mutual funds split evenly between US domestic and international stock mutual funds…and I’m 53 years old. That’s because my own 5-year window is still at least a decade away.
You should also ask yourself a similar question about real estate valuations. Will they remain at or above their historic highs at a time roughly 5 years prior to retirement?
If so – and you’re willing to deal with the hassle of maintaining your property values, especially with local renters’ rights in mind – then in choosing between stock mutual funds and becoming a slum lord ( 
) you very likely cannot lose.
I think Jive Turkey is spot on, and if you’re younger than I then the odds are excellent that investing in stocks now (especially now) will pay off handsomely for you when you retire.
Just to illustrate what I wrote about above:
https://www2.troweprice.com/cda/public/fi/fiUnsecureDefault/0,2955,lnp%253D-1%2526cg%253D1530%2526contentid%253D1530%2526pgid%253D13047,00.html?scn=Latest_News&rfpgid=12993
There have been a lot of studies done that are similar to what I’ve pasted in above. Some have gone back a few decades, and some were published in peer-reviewed finance journals. I posted this one by T. Rowe Price just because it was easiest to find.
Don’t bail out of equities. It will very much be a situation of “equities are dead, long live equities.”
[quote=“rousseau”]
Erm…should my wife and I quit making our monthly contributions to our mutual fund RRSPs? Maybe just put the cash into a savings account, instead? Our RRSPs keep losing value, and we feel like we’re throwing our money away. Heck, with interest rates so low, should we maybe buy a rental property for our retirement? We’re self-employed, so no pension plan will be waiting for us in the future.[/quote]
Of course you should keep contributing to your RRSPs. We’ve lost about 10-15K in just this area alone (and this is with contributing to pretty low risk mutual funds), but we’re still making our monthly contributions. Furthermore, you should also take advantage of Canada’s new TFSA of $5000 per year starting January 2. However, if your RRSPs in mutual funds constitute the majority of your retirement planning, I’d also start putting a little bit in Term Deposits, Guaranteed Investment Certificates (GICs), and various types of Bonds. Before the downtown we invested half of our dosh into stocks, a quarter in mutual funds, and a quarter in bonds/GICs/term deposits etc. We’re keeping everything, but any new investments will be made in the last two categories (mutual funds, bonds/GICs/term deposits etc.)
“When there’s blood on the streets, it’s time to buy, even if that blood is your own.” – Mayer Rothschild.
“Bear markets are when stocks return to their rightful owners” – Warren Buffett.
The biggest effect that the recession has had on my lifestyle is in the denial of what would have been a brand new lifestyle as an expat to Shanghai, a position that I had been carefully positioning myself towards for the past year. In September, I was told that in all likelihood, the job was mine. Two weeks ago, I was told that it would be difficult to justify the expense to upper management given the current conditions (the company has already instituted a freeze on hiring and travel). It would have been good – a promotion, increased pay, free housing, free private school for the kids, free car and chauffeur, free trips back home twice a year, etc. This job would would have been the entry into the Far East that I was looking for and if the family found the experience agreeable, we would try to stay, not necessarily in Shanghai, but certainly within the Chinese speaking sphere.
So instead of living like a king in Shanghai, we’re stuck here in the snow and have limited ourselves to buying things on sale as much as possible, clipping coupons, and buying even more in bulk than we’ve been doing. We’re delaying some badly needed home improvements such as replacing the worn out kitchen floor and are scaling back our dining out by doing it less frequently (it used to be once a week) and less costly (no more Japanese).
Our biggest expense by far is still our kids and there’s no plan right now to scale back on that. However, my wife is now looking for a part time job. I expect to be employed at least through to June of next year, so her job hunt is not crucial, but the fact she’s looking at all, rather than doing purely volunteer work, is a sign of nervousness on our part.
All in all, we’re grateful to be able to continue to live a middle middle-class lifestyle.
Haha, that’s a joke, Taiwan has been in a general recession for over 8 years. The number of Taiwanese emigrating to China has been accelerating continuously and now many top managers and engineers have also left.
Not good for me, though. I had a lump of sterling in a Jersey account that I needed to put toward buying a house here. When I saw the writing on the wall for the pound, I sent instructions to the bank to close the account and transfer the money to me in Taipei at once. But the bank delayed and delayed carrying out my instructions - they claimed that the account-closing procedures and confirmations necessitated the delay - and by the time the money finally reached me here, I got half a million less on the conversion that I’d have got if they’d remitted it at once. It was very painful waiting and waiting for those pounds to arrive, calling the bank and pressing them to get my money to me pronto and being fobbed off with all kinds of excuses for the need to do this and that before they could release the funds, and seeing its value in NT$ plunging by large amounts each day.
I haven’t had any of those ‘special’ massages for quite a while.
I’ve decided to avoid economic news till 2010.
This weeks NYSE reports coming out is looking like a blood bath.