Relationships and money issues - East and West

[Dennis143]

3. The bank accounts give less than 4% interest. Given inflation ~10%, if you place money in the bank, you lose.

4. Real estate is rising at a similar rate to stocks.

 

 

Not quite. GDP/GNP growth rate is not equivalent to inflation rate. While China has been expanding it's GDP at over 10% yearly, inflation has been nowhere near 10%.

 

http://www.time.com/time/magazine/article/...1670255,00.html

 

China's Next Big Export: Inflation

Thursday, Oct. 11, 2007

 

Although it may not be evident at the local Wal-Mart yet, these forces may already be in play. Demand from China, along with other fast-growing emerging economies, has driven up the price of oil and a wide range of other commodities for the past several years. But what's really worrying many economists is the sudden appearance of relatively high inflation within China and the ripples that might cause abroad. Despite five interest-rate increases this year by China's central bank, the country's consumer price index has been stubbornly on the rise. In August, inflation climbed to a 6.5% annual rate, the fastest clip in more than 10 years.

 

In the past 10 years, the inflation rate of China hasn't ever reached 6.5% until now, let alone anywhere near 10%.

 

But chrisnhong's general thesis is sound. Inflation is going up quicker than the interest rate paid to consumers by the banks, and so one is becoming poorer by putting one's money solely in bank savings/cd accounts. But many people are heavily invested in the stock market now and they've making a killing. Until the bubble bursts, China is minting new millionaires by the day.

 

My mom has asked that my dad wire more funds to her in China to be more fully invested in China. There is indeed high risk but the rewards are phenomenal.

OK Lance, care to share what stocks mom suggests that we invest in?

[chilton747]

I can tell you that before my wife and I were married, she tried to get me to invest in a house or two in Shenzhen back when the price was much cheaper. I chose not to do this because I was not comfortable. Turns out she was right. I could have done very well due to the huge increase in housing value there. She asked me the other day why I did not invest at that time. I simply told her that I did not want to. She said "ok."

[SirLancelot]

OK Lance, care to share what stocks mom suggests that we invest in?

 

All our lives--my family--heavily revolve around silicon valley high tech. We lost a shit load of money during the dot com bust. My mom doesn't want that to happen again. This time, she's only investing in mutual funds within China. They also just purchased an apartment outside of Shanghai. I don't recall the name exactly but I believe it's the same city as where Feather's wife is originally from. Kunshan or something like that.

 

I think Shanghai Tony would probably be the guy to ask about specific stock picks for the Chinese market.

[yemmie]

now that I have had more time to think about your post let me add some comments. If she has the ability to get an international business degree here in the US. A lot of doors would be open for her in this country. A man who was in my Chinese class a few years ago was married to a woman from china . She had no advanced learning in China due to the cultural revolution. She also studied international business here. and landed a job for a fortune 500 company. Now she travels between the US and China often . To have some one with a degree like that and who understands the political enviroment within a Chinese company is highly sought after here in the US. In China very few older people return to a university. Here it is not uncommon. I would stress to her that if she has the will to get through our degree process. she would be very employable.I have no doubt that the woman mentioned above is pulling a 6 figure paycheck. Would that be rich enough for your girl?

Hello again,

 

My girl asked me about your post again. She was wondering what city the woman who works for the international company lives in. I told her I would write to you again and try to find out. I have been having a difficult time explaining to her that, although the cities in Hampton Roads, Virginia are small, the ports are growing, and one could do very well in international business here.

[Guest lilac6451]

Yemmie,

 

I can understand your girlfriend. Before I came to USA, many friends, family members, and I, myself, thought it would be a good idea to learn some unique skills such as Yoga, doing facial, polishing nails or even acupuncturing... Because we were worried about what we could do without the language advantage, while at the same time, we thought those skills were very traditional to Chinese, which would make it easier for us to find a job.

 

 

I can understand your girlfriend too when she is eager to persuade you to invest your money into the stock market. She really wants to make money for you. That could be true in 2007. But she is wrong in saying there is no risk in the stock market in China. Because I have lots of stocks , now the market is so bad that I almost lost half of my money. I am thinking once the market is getting better when I can pull my money out, I will never invest again, at least not that much. So it will be wise to tell her not to invest that much into stock market.

[yemmie]

Yemmie,

 

I can understand your girlfriend. Before I came to USA, many friends, family members, and I, myself, thought it would be a good idea to learn some unique skills such as Yoga, doing facial, polishing nails or even acupuncturing... Because we were worried about what we could do without the language advantage, while at the same time, we thought those skills were very traditional to Chinese, which would make it easier for us to find a job.

 

 

I can understand your girlfriend too when she is eager to persuade you to invest your money into the stock market. She really wants to make money for you. That could be true in 2007. But she is wrong in saying there is no risk in the stock market in China. Because I have lots of stocks , now the market is so bad that I almost lost half of my money. I am thinking once the market is getting better when I can pull my money out, I will never invest again, at least not that much. So it will be wise to tell her not to invest that much into stock market.

Thank you Lilac. I appreciate your input.

[yemmie]

now that I have had more time to think about your post let me add some comments. If she has the ability to get an international business degree here in the US. A lot of doors would be open for her in this country. A man who was in my Chinese class a few years ago was married to a woman from china . She had no advanced learning in China due to the cultural revolution. She also studied international business here. and landed a job for a fortune 500 company. Now she travels between the US and China often . To have some one with a degree like that and who understands the political enviroment within a Chinese company is highly sought after here in the US. In China very few older people return to a university. Here it is not uncommon. I would stress to her that if she has the will to get through our degree process. she would be very employable.I have no doubt that the woman mentioned above is pulling a 6 figure paycheck. Would that be rich enough for your girl?

Hey Lost in Blue,

 

I told my girl about the your classmate's wife from China and her studying business. She asked me to ask you what city they lived in here in America.

[lostinblue]

She works for kodak in Rochester NY.