The Malaysian in Sydney has been busy looking for new role in the past few months. It is tough out there, but as the going gets tough, the tough gets going.
Many Malaysians who have moved to Sydney or Australia in general will know how difficult it is to get and keep a real job; and those who have a job will also know how easy it is to lose it or be made redundant. The new economy does not favour job security, loyalty nor life time employment any longer. Change, move or retrain is the new mantra.
For those who are experiencing this situation at this moment, all I can say is just don't give up. I know is it easier said, but this is of utmost importance.
A brief of what I have undergone the past 2-3 months in my quest for a new job/ role and what I did or experienced/ observed:
a) Submitted in total, an excess of 160 applications, many were very close fit, others were just a stab in the dark although I must say all were relevant to my background/training/ experience
b) All my submissions were for roles in Sydney (and greater Sydney) initially but eventually expanded to include regional NSW as well
c) All positions applied for, were for experienced roles with probably no less than 5 years, with many seeking 10-20 years, and to give you some back ground, I have over 20 years experience
d) I've read numerous books, articles, web sites, linked in postings etc, on job search with mixed conclusions e.g. some ask you to copy extracts of the job requirements onto your CV to enable the software to pick up/ filter a good match whilst others ask you to be more creative/ different
e) Recruiters work mainly for the client/employers' interest not the job seekers, very few actually work towards the job seekers' interest; so if you fail to get any response or frequently get rejected, it is not you. I had better response rate from employers directly although better here means a few as well
f) The job market is running on two speed; with the lower level roles/ position i.e. those below $100K p.a. having a slightly better chance in favour of the employee and those at the higher level roles/ position i.e. those above $100K p.a, still very much an employers' market possibly due to over supply of qualified/experience candidates
g) Don't be afraid to try new things and/ or meet people in whatever that is relevant; career change, business opportunities, volunteering etc.
h) Try to be away from your home i.e. as if you're working everyday, by going out to meet people, attend free talks, network, meet up, start up, forums etc. Exchanging ideas/ view points with others helps to keep your sanity
i) Rejection increases the more you apply, but apply you must, whether it is in response to a job ad, unsolicited letters/application to a potential employer, news article highlighting expansion of a company, ASX announcement on some resignation or by word of mouth etc.
j) Review all your contacts and try to communicate with them on your intention to assist, help or support them in any relevant role/function; not just to look for a job. It does not matter even if it is not a paid role, the idea is to keep your mind working and making yourself useful
Based on the above experience, I finally received a handful (one hand only), of response (i.e. phone calls from the recruiter/ employer/ advertiser for some queries and/or phone interview), with two coming from regional roles. Most (close to above 80%) never reply, around 15-20% will send you a rejection; and hopefully one or two interviews with the potential employer (you only need one job).
From there, I manage to secure a role in regional NSW which means relocating myself.
The journey has been tough and stressful, but it is a journey in life.
I will now begin my journey from a regional NSW perspective next week and hopefully will be able to continue posting.
Again, best of luck to job seekers out there and feel free to share or ask me any question.
Wednesday, October 22, 2014
Saturday, August 23, 2014
Careers and Job Prospect
Many migrants from Malaysia who have arrived in recent times are usually skilled professionals with permanent residency status, allowing them work rights in many if not most places. Some are graduates from Australia who had previously returned to Malaysia or work elsewhere and build their initial careers outside Australia. Some are non-Australian professionals trained outside Australia during their initial working careers.
I met a Malaysian who works in Sydney yesterday at lunch who lamented the fact that her brother who graduated from an Australian university had not been able to get a job after moving to Australia about six months ago. Upon further enquiry, she told me her brother had moved to Malaysia upon his graduation and started his career there. He then moved to a few countries including the Middle East as his last posting, where he was also able to get a job shortly upon his arrival given his qualification and experience.
Thinking that he was an Australian graduate with some global experience, he predicted that a permanent move back to Australia would be an easy transition. The six months of job search in Sydney proved how challenging it was to secure a job here.
I am sure many Malaysians in Sydney or other first generation migrant can relate to this. I know of several people from Malaysia who have settled here for the last few years are still struggling to get their careers restarted. Many of them are here to give their children a better start and are willing to sacrifice their own careers in the process. They have sold all their possessions back in Malaysia and have uprooted themselves from all their connections, families, network etc. with the hope that the next generation will be able to start with a better life.
If one looks back at how many first generation migrants started in Europe, America or Australia, it is not uncommon to observe that the traditional stereotype still exists. You can still see many Asians migrants running fish & chips shops, laundry, news agent, grocery store etc. Even the popular TV series Simpsons, depicts a PhD holder of Indian origin, Dr. Apu Nahasapeemapetilon, Ph.D. Jr. as running a mini-mart in the USA.
Having worked in Australia for more than five years, I really do not find significant differences in the work ethics and requirements in Asia and in Australia. Many will say that you'll need 3-5 years of local Australian experience before you can even get any decent job here. Even entry level jobs or jobs many of us take from granted, kitchen hand, waiting jobs at restaurant, cashiering seems to be rare and equally challenging to secure as well.
I am in the process of looking for a new role and I find the whole process of job hunting to be challenging as well and you get knocked down one after another attempt. It can be psychological draining on the soul but it is something many of us will have to overcome. Many have done it and many will continue to.
I met a Malaysian who works in Sydney yesterday at lunch who lamented the fact that her brother who graduated from an Australian university had not been able to get a job after moving to Australia about six months ago. Upon further enquiry, she told me her brother had moved to Malaysia upon his graduation and started his career there. He then moved to a few countries including the Middle East as his last posting, where he was also able to get a job shortly upon his arrival given his qualification and experience.
Thinking that he was an Australian graduate with some global experience, he predicted that a permanent move back to Australia would be an easy transition. The six months of job search in Sydney proved how challenging it was to secure a job here.
I am sure many Malaysians in Sydney or other first generation migrant can relate to this. I know of several people from Malaysia who have settled here for the last few years are still struggling to get their careers restarted. Many of them are here to give their children a better start and are willing to sacrifice their own careers in the process. They have sold all their possessions back in Malaysia and have uprooted themselves from all their connections, families, network etc. with the hope that the next generation will be able to start with a better life.
If one looks back at how many first generation migrants started in Europe, America or Australia, it is not uncommon to observe that the traditional stereotype still exists. You can still see many Asians migrants running fish & chips shops, laundry, news agent, grocery store etc. Even the popular TV series Simpsons, depicts a PhD holder of Indian origin, Dr. Apu Nahasapeemapetilon, Ph.D. Jr. as running a mini-mart in the USA.
Having worked in Australia for more than five years, I really do not find significant differences in the work ethics and requirements in Asia and in Australia. Many will say that you'll need 3-5 years of local Australian experience before you can even get any decent job here. Even entry level jobs or jobs many of us take from granted, kitchen hand, waiting jobs at restaurant, cashiering seems to be rare and equally challenging to secure as well.I am in the process of looking for a new role and I find the whole process of job hunting to be challenging as well and you get knocked down one after another attempt. It can be psychological draining on the soul but it is something many of us will have to overcome. Many have done it and many will continue to.
Friday, July 18, 2014
Home- To buy or Rent?
In the past week, the Reserve Bank of Australia released a statement saying that it would be better to remain a home renter than to be a home owner.
When I first came to Australia about five years ago, I noticed that Australians like Malaysians (or Asians) in general, are home owner obsessed. As a kid growing up in Malaysia, I always hear my dad saying we must always own a home regardless of our situation. Even a small roof would suffice as it will always protect us, come rain or shine.
Being new to the Australian market, I decided to do some research and I came to the following conclusion:
1) Renting a similar home in the same suburb will generally cost less than home ownership in terms of cash outflow
2) Renting means not having to deal with the challenges of home ownership including repairs, maintenance, strata fees, neighbours (in a strata property) etc.
3) Renting provides flexibility to the tenant, they can move in or out easily or on the opposite site, less certainty as well as the landlord may sell, increase the rent or give notice to vacate for whatever reason
4) Not having your own home, means not being able to renovate, expand or change the configuration of the house or even put nails or change the colour of the walls
Most people have the notion that paying rent is "dead" cash outflow as compared to mortgage repayment which goes towards reducing the loan. I tend to compare rent payments no different from interest repayments, both are "dead" cash outflow. Only the payment of the principal loan amount reduces the loan and as we all know during the early part of any long term loan, most the payment goes towards interest rather than principal unless one borrows little.
I did read similar essays back then which provided some evidence under certain assumptions, renting was better than buying/owning financial wise. I won't be discussing about the non-financial or intangible benefits of owing vs renting and limit myself to the main assumption what I believe then, was the main reason why renting was financially better than buying/ owning.
As stated in (1) above, one will generally be expected to have some "surplus" cashflow arising from renting compared to buying using a mortgage i.e. paying off the loan. The only situation where one will not be in this situation is when one has a small or no loan from buying a home i.e. a cash buyer having 100% equity or near to 100%, say 80% or so. Most home buyers will generally be geared up to at least 80-90% when buying a home in the form of a mortgage.
The main reason or assumption why renting can be better than buying a home financial wise is when one invests the surplus cash which then provides a positive return in excess of the rise in the capital value of your home.
For e.g. if renting costs one $500/ week but mortgage repayment will costs one say $700/ week, the renter will financially be better off than a home owner IF, the $200/ week surplus is:
i) Invested wisely and properly
ii) Grows and reinvested wisely and properly
iii) Invested over a long term period similar to a home mortgage, i.e. 20-30 years which is a typical mortgage period
The challenge however in reality is most renters, will not however be investing the surplus $200 cash wisely and diligently each week. I can probably bet my last $, that the surplus funds will be going somewhere else rather than being invested.
Hence if one is unable to invest diligently, properly and wisely whatever surplus one may obtain from renting vs paying a home mortgage, having a home mortgage forces one to save for the old age with a certain level of security in terms of investment assets.
When I first came to Australia about five years ago, I noticed that Australians like Malaysians (or Asians) in general, are home owner obsessed. As a kid growing up in Malaysia, I always hear my dad saying we must always own a home regardless of our situation. Even a small roof would suffice as it will always protect us, come rain or shine.
Being new to the Australian market, I decided to do some research and I came to the following conclusion:
1) Renting a similar home in the same suburb will generally cost less than home ownership in terms of cash outflow
2) Renting means not having to deal with the challenges of home ownership including repairs, maintenance, strata fees, neighbours (in a strata property) etc.
3) Renting provides flexibility to the tenant, they can move in or out easily or on the opposite site, less certainty as well as the landlord may sell, increase the rent or give notice to vacate for whatever reason
4) Not having your own home, means not being able to renovate, expand or change the configuration of the house or even put nails or change the colour of the walls
Most people have the notion that paying rent is "dead" cash outflow as compared to mortgage repayment which goes towards reducing the loan. I tend to compare rent payments no different from interest repayments, both are "dead" cash outflow. Only the payment of the principal loan amount reduces the loan and as we all know during the early part of any long term loan, most the payment goes towards interest rather than principal unless one borrows little.
I did read similar essays back then which provided some evidence under certain assumptions, renting was better than buying/owning financial wise. I won't be discussing about the non-financial or intangible benefits of owing vs renting and limit myself to the main assumption what I believe then, was the main reason why renting was financially better than buying/ owning.
As stated in (1) above, one will generally be expected to have some "surplus" cashflow arising from renting compared to buying using a mortgage i.e. paying off the loan. The only situation where one will not be in this situation is when one has a small or no loan from buying a home i.e. a cash buyer having 100% equity or near to 100%, say 80% or so. Most home buyers will generally be geared up to at least 80-90% when buying a home in the form of a mortgage.
The main reason or assumption why renting can be better than buying a home financial wise is when one invests the surplus cash which then provides a positive return in excess of the rise in the capital value of your home.
For e.g. if renting costs one $500/ week but mortgage repayment will costs one say $700/ week, the renter will financially be better off than a home owner IF, the $200/ week surplus is:
i) Invested wisely and properly
ii) Grows and reinvested wisely and properly
iii) Invested over a long term period similar to a home mortgage, i.e. 20-30 years which is a typical mortgage period
The challenge however in reality is most renters, will not however be investing the surplus $200 cash wisely and diligently each week. I can probably bet my last $, that the surplus funds will be going somewhere else rather than being invested.
Hence if one is unable to invest diligently, properly and wisely whatever surplus one may obtain from renting vs paying a home mortgage, having a home mortgage forces one to save for the old age with a certain level of security in terms of investment assets.
Friday, July 11, 2014
Optometrist and the price of glasses
In Australia unlike Malaysia, most healthcare insurance provides an option for prescription glasses (spectacles) every calendar year. As my healthcare insurance includes this cover, I visit an optometrist every 1 or 2 years.
This time round due to my age, multi focal lenses were prescribed to me for the first time. Due to the price of multi focal lenses, it appears that I would have to pay i.e. top up beyond what is covered by my healthcare insurance provider.
In Australia it is not unusual for one to see advertisement that says you only pay say $199 for two pair of glasses including lenses. As insurance cover is usually around $200/year, one would assume that one would not be required to top up any extra costs i.e. no gap, as it is called in Australia.
This visit however I decided to ask more question (unlike the past when I was not out of pocket i.e. no gap).
Firstly, $199 (sticker list price) for two pairs usually cover a limited range of frames and only include the "standard vision" lenses. If you wish to buy one pair, this retailer I went to will only deduct 25% off the $199 i.e, a cost of $199 less 25% or about $150. Looks like my maths have failed me here where if you take 1 pair instead of 2, you pay 75% off the two pairs sticker price.
My prescribed multi focal lenses were also priced on a two pairs basis, so if I choose only one pair, I get penalised by getting only 25% off the pricing for two pairs.
Secondly, there is also the other lens option which is then priced on a per pair basis by usually "recommended" including ultra clear, sun protection, thinner & lighter lenses etc. The price for this ranges from $50 to as high as $280 per pair where I shopped.
In total my 1 pair of glasses cost me around $500 before my insurance or around $300 after insurance coverage.
In future if I ever were to start my business venture, I may consider pricing my products or services on a two or more quantity basis and if anyone wishes to buy one, it will be only less 25% or something else.
I wonder where ACCC is, on this issue?
This time round due to my age, multi focal lenses were prescribed to me for the first time. Due to the price of multi focal lenses, it appears that I would have to pay i.e. top up beyond what is covered by my healthcare insurance provider.
In Australia it is not unusual for one to see advertisement that says you only pay say $199 for two pair of glasses including lenses. As insurance cover is usually around $200/year, one would assume that one would not be required to top up any extra costs i.e. no gap, as it is called in Australia.
This visit however I decided to ask more question (unlike the past when I was not out of pocket i.e. no gap).
Firstly, $199 (sticker list price) for two pairs usually cover a limited range of frames and only include the "standard vision" lenses. If you wish to buy one pair, this retailer I went to will only deduct 25% off the $199 i.e, a cost of $199 less 25% or about $150. Looks like my maths have failed me here where if you take 1 pair instead of 2, you pay 75% off the two pairs sticker price.
My prescribed multi focal lenses were also priced on a two pairs basis, so if I choose only one pair, I get penalised by getting only 25% off the pricing for two pairs.
Secondly, there is also the other lens option which is then priced on a per pair basis by usually "recommended" including ultra clear, sun protection, thinner & lighter lenses etc. The price for this ranges from $50 to as high as $280 per pair where I shopped.
In total my 1 pair of glasses cost me around $500 before my insurance or around $300 after insurance coverage.
In future if I ever were to start my business venture, I may consider pricing my products or services on a two or more quantity basis and if anyone wishes to buy one, it will be only less 25% or something else.
I wonder where ACCC is, on this issue?
Sunday, May 18, 2014
Underemployment & Unemployment
Ahh statistics, underemployment and unemployment...what does it mean?
As a relatively new migrant it is not often that I get queries from people outside Australia seeking to know about employment opportunities in Australia. I was fortunate enough to move to Australia with a job in hand, but I know of several people who are still struggling to find permanent employment or a stable career.
The fact that Australia regularly reports its unemployment at around 6% does not seem to be reflected to those on the ground especially those seeking employment or those seeking to move jobs. I recalled my personal experience in changing job where I sent close to 200 applications over a period of 1 year without much success several years ago which some, would attribute to the economic condition prevailing then.
Lets us first understand what the official statistics of unemployment of 5.8% means, as the job market remains extremely difficult for job seekers and new migrants to Australia. To put in perspective, 5.8% unemployment rate is considered "fairly low", somewhere in the lower mid range by developed economies standard.
As comparison the unemployment rate (www.tradingeconomics.com/country-list/unemployment-rate) in the US 6.3%, UK 6.9%, Japan 3.4%, Singapore 2.1%, France 10.2%, Italy 12.7%, Germany 5.1%, Netherlands 8.7%. It appears that Asia is still the growth area, with the US and UK improving in recent times followed by Continental Western Europe, South Europe and lastly East Europe generally speaking.
To fall under the existing definition of "EMPLOYMENT", it is relatively easy, as defined by the OECD:
Persons in employment comprise all persons above a specified age who during a specified brief period, either one week or one day, were in the following categories:
- paid employment;
- self employment.
Source: http://stats.oecd.org/glossary/detail.asp?ID=778
So it appears that if one is employed for just one day, one would therefore be considered "employed" and by definition, no longer unemployed.
To boost employment i.e. reduce unemployment, one could therefore give every single person of working age, paid employment of just one day!
Which brings me to the next point.
In today's work environment due to the availability of information technology capabilities and, changes in legislation, many are no longer in full time employment unlike during our grandparents' era. In those days, one either works full time or remain unemployed. There was little part time or casual employment roles (with exceptions of course). This is where underemployment comes in.
We now have a relatively large work force who are underemployed i.e. able to work more than the hours they are currently in employment e.g. working 2 day weeks, or 20 hours week etc. Some choose the shorter works but many are only able to secure employment for this shorter period compared to the 40 hours standard work week most of us know of. Governments may for example decide to pass a law prohibiting work beyond say 25 hours work week, and presto, we have full employment immediately.
I'm sure that when the legislation was pass to allow for casual and part time employment, the intention was to allow workers with other commitments e.g. child caring responsibility, the possibility of seeking flexible hours around their personal or family duties. The unintended consequences however, companies now seek to just hire workers to "fit-in-time" their work routine and pay them those few hours of employment. It is also extremely difficult for people to seek other employment to fill up those few hours of their non-working time, if they are underemployment, due to to travel time and/ or other commitments which may not fit the work schedules of both parties, employer and employee.
I am worried about the consequences of all this for the future generation and the way moving forward appears to be self-employed contractors who are hired purely for their services on a need to basis. This however comes at a higher rate of wages per hour but with less hours in place, an overall lower fixed costs.
As a relatively new migrant it is not often that I get queries from people outside Australia seeking to know about employment opportunities in Australia. I was fortunate enough to move to Australia with a job in hand, but I know of several people who are still struggling to find permanent employment or a stable career.
The fact that Australia regularly reports its unemployment at around 6% does not seem to be reflected to those on the ground especially those seeking employment or those seeking to move jobs. I recalled my personal experience in changing job where I sent close to 200 applications over a period of 1 year without much success several years ago which some, would attribute to the economic condition prevailing then.
Lets us first understand what the official statistics of unemployment of 5.8% means, as the job market remains extremely difficult for job seekers and new migrants to Australia. To put in perspective, 5.8% unemployment rate is considered "fairly low", somewhere in the lower mid range by developed economies standard.
As comparison the unemployment rate (www.tradingeconomics.com/country-list/unemployment-rate) in the US 6.3%, UK 6.9%, Japan 3.4%, Singapore 2.1%, France 10.2%, Italy 12.7%, Germany 5.1%, Netherlands 8.7%. It appears that Asia is still the growth area, with the US and UK improving in recent times followed by Continental Western Europe, South Europe and lastly East Europe generally speaking.
To fall under the existing definition of "EMPLOYMENT", it is relatively easy, as defined by the OECD:
Persons in employment comprise all persons above a specified age who during a specified brief period, either one week or one day, were in the following categories:
- paid employment;
- self employment.
Source: http://stats.oecd.org/glossary/detail.asp?ID=778
So it appears that if one is employed for just one day, one would therefore be considered "employed" and by definition, no longer unemployed.
To boost employment i.e. reduce unemployment, one could therefore give every single person of working age, paid employment of just one day!
Which brings me to the next point.
In today's work environment due to the availability of information technology capabilities and, changes in legislation, many are no longer in full time employment unlike during our grandparents' era. In those days, one either works full time or remain unemployed. There was little part time or casual employment roles (with exceptions of course). This is where underemployment comes in.
We now have a relatively large work force who are underemployed i.e. able to work more than the hours they are currently in employment e.g. working 2 day weeks, or 20 hours week etc. Some choose the shorter works but many are only able to secure employment for this shorter period compared to the 40 hours standard work week most of us know of. Governments may for example decide to pass a law prohibiting work beyond say 25 hours work week, and presto, we have full employment immediately.
I'm sure that when the legislation was pass to allow for casual and part time employment, the intention was to allow workers with other commitments e.g. child caring responsibility, the possibility of seeking flexible hours around their personal or family duties. The unintended consequences however, companies now seek to just hire workers to "fit-in-time" their work routine and pay them those few hours of employment. It is also extremely difficult for people to seek other employment to fill up those few hours of their non-working time, if they are underemployment, due to to travel time and/ or other commitments which may not fit the work schedules of both parties, employer and employee.
I am worried about the consequences of all this for the future generation and the way moving forward appears to be self-employed contractors who are hired purely for their services on a need to basis. This however comes at a higher rate of wages per hour but with less hours in place, an overall lower fixed costs.
Friday, May 9, 2014
ACCC, competition and costs Part II
I have used the same energy provider since moving to Sydney close to 5 years ago and this week I decided to shop around for another electricity re-seller.
Like most people today, Google was the first port of call, and after a few seconds, it got me an independent intermediary for energy who is reputed to be independent in providing price and costs comparison for consumers.
A phone call later and with my electricity bill in front of me, I was able to provide them with my current energy account details. They gave me a few option out of around 20 re-sellers in terms of the lowest costs (how else do you buy electricity as they're identical). My current provider was ranked around number 12 in terms of price from the lowest costs.
I chose one from the option provided and they informed that I was able to enjoy upto 10% discount on my existing bill with a two years contract with this new supplier in my next billing cycle. A confirmation was provided on the spot for them to switch supplier on the phone. As usual I had to go through the series of questions and answers to make sure I said "yes" to every question posed. After this so call interrogation, they confirmed that my account was ready to be moved to this new provider and with a final yes, the move started.
The next day, I decided to browse the website of this new provider and I was surprise to see that the best discount provided on line was 15% as compared to the 10% provided to me by the intermediary just yesterday. I then called the intermediary and asked why was I only provided with a 10% discount from this re-seller when the highest discount was 15%. They then rechecked their system and told me that there was no such discount rate in their system. I then told them that I'll call the energy re-seller to confirm why was this the case.
A phone call to the new energy re-seller confirmed that the new higher discount rate was only published yesterday and therefore the intermediary did not have it on their system yet. They did confirm to me that my account application has been received and they would provide me with the new higher discount rates of 15% as oppose to the 10% applied previously.
Moral of the story, check, check and re-check for the best deal and feel free to insist on the highest rates. My existing energy provider has taken me for a ride for 5 years, without offering me any discounts. Loyalty again does not pay.
The ACCC ensures that moving across service providers is easy and each and every consumer should endeavour to move where possible.
Like most people today, Google was the first port of call, and after a few seconds, it got me an independent intermediary for energy who is reputed to be independent in providing price and costs comparison for consumers.
A phone call later and with my electricity bill in front of me, I was able to provide them with my current energy account details. They gave me a few option out of around 20 re-sellers in terms of the lowest costs (how else do you buy electricity as they're identical). My current provider was ranked around number 12 in terms of price from the lowest costs.
I chose one from the option provided and they informed that I was able to enjoy upto 10% discount on my existing bill with a two years contract with this new supplier in my next billing cycle. A confirmation was provided on the spot for them to switch supplier on the phone. As usual I had to go through the series of questions and answers to make sure I said "yes" to every question posed. After this so call interrogation, they confirmed that my account was ready to be moved to this new provider and with a final yes, the move started.
The next day, I decided to browse the website of this new provider and I was surprise to see that the best discount provided on line was 15% as compared to the 10% provided to me by the intermediary just yesterday. I then called the intermediary and asked why was I only provided with a 10% discount from this re-seller when the highest discount was 15%. They then rechecked their system and told me that there was no such discount rate in their system. I then told them that I'll call the energy re-seller to confirm why was this the case.
A phone call to the new energy re-seller confirmed that the new higher discount rate was only published yesterday and therefore the intermediary did not have it on their system yet. They did confirm to me that my account application has been received and they would provide me with the new higher discount rates of 15% as oppose to the 10% applied previously.
Moral of the story, check, check and re-check for the best deal and feel free to insist on the highest rates. My existing energy provider has taken me for a ride for 5 years, without offering me any discounts. Loyalty again does not pay.
The ACCC ensures that moving across service providers is easy and each and every consumer should endeavour to move where possible.
Friday, May 2, 2014
Property Prices Up?
Property prices have been on the upside in recent times after a slowdown only a few years ago. Cities in developed economies such as London which saw prices down or stagnant only a few years back have also recently bounced back and even the chairman of Lippo of Indonesia is now looking to the US to invest in properties.
In Sydney, prices have moved up rather significantly due to various factors including limited supply in selective location, influx of more foreign investments, the rush or fear of missing out factor etc.
Home owners feel good whenever prices move higher. Potential buyers however are unhappy as prices seem to be out of reach and keeps escalating upwards.
Home owners talk about how much they have "gained" since they joined the owners club and are urging non owners to join the club. However is this gain for real?
Let use an example to illustrate this gain:
A buys a property says at $500K for cash (i.e. no loan) which is the average price within the suburb. A then keeps this property for 5 years and voila...the average price in the area has now jumped to $700K, hence a perceived $200K capital gain. The question then arises, did A make the "gain" (leaving interest, transaction and holding cost aside and assume there is no cost)?
A then decides to sell the property and pocket the "gain" and now have $700K. However is this gain real if A wishes to buy another home? He'll still need to spend $700K if he wants to be a house owner again, hence the perceived gain is only real, if A downgrades i.e. buys a lower price home or moves to an area where the average price is lower for a similar property e.g. country or bush land.
Not forgetting in my example above, I've assumed no interest, holding nor transaction costs were included and if one includes all of it, the $200K perceived gain will probably be close to nil.
Just on a similar subject, a colleague of mine recently saw a house for sale which appears to be at a 10-15% discount compared to its average within the suburb. The reason why there was a discount was due to the fact that the house is very close to large power lines which we hanging over very close. Those of you who have some basic knowledge of Chinese "Feng Shui" would want to avoid this and those with some basic understanding of modern science may also wish to reconsider the house (although scientific research about the negative impacts of power lines on human health is still inconclusive, I guess its better safe than sorry).
Although the discount looks tempting, I reminded him the fact that the house will forever be at a discount (unless the power lines are removed) when he resells it in the future, hence the "discount" will never materialise for him.
I guess many of us would like to believe that we are rather smart in buying and/ or investing in property, but the reality is, the market place is also equally if not more intelligent. There is actually not much to be made out there although exceptional circumstances do happen. I guess in life you'll only hear that 1 winning lottery ticket story, but not the other thousands who missed the winning ticket and remained silent.
In Sydney, prices have moved up rather significantly due to various factors including limited supply in selective location, influx of more foreign investments, the rush or fear of missing out factor etc.
Home owners feel good whenever prices move higher. Potential buyers however are unhappy as prices seem to be out of reach and keeps escalating upwards.
Home owners talk about how much they have "gained" since they joined the owners club and are urging non owners to join the club. However is this gain for real?
Let use an example to illustrate this gain:
A buys a property says at $500K for cash (i.e. no loan) which is the average price within the suburb. A then keeps this property for 5 years and voila...the average price in the area has now jumped to $700K, hence a perceived $200K capital gain. The question then arises, did A make the "gain" (leaving interest, transaction and holding cost aside and assume there is no cost)?
A then decides to sell the property and pocket the "gain" and now have $700K. However is this gain real if A wishes to buy another home? He'll still need to spend $700K if he wants to be a house owner again, hence the perceived gain is only real, if A downgrades i.e. buys a lower price home or moves to an area where the average price is lower for a similar property e.g. country or bush land.
Not forgetting in my example above, I've assumed no interest, holding nor transaction costs were included and if one includes all of it, the $200K perceived gain will probably be close to nil.
Just on a similar subject, a colleague of mine recently saw a house for sale which appears to be at a 10-15% discount compared to its average within the suburb. The reason why there was a discount was due to the fact that the house is very close to large power lines which we hanging over very close. Those of you who have some basic knowledge of Chinese "Feng Shui" would want to avoid this and those with some basic understanding of modern science may also wish to reconsider the house (although scientific research about the negative impacts of power lines on human health is still inconclusive, I guess its better safe than sorry).
Although the discount looks tempting, I reminded him the fact that the house will forever be at a discount (unless the power lines are removed) when he resells it in the future, hence the "discount" will never materialise for him.
I guess many of us would like to believe that we are rather smart in buying and/ or investing in property, but the reality is, the market place is also equally if not more intelligent. There is actually not much to be made out there although exceptional circumstances do happen. I guess in life you'll only hear that 1 winning lottery ticket story, but not the other thousands who missed the winning ticket and remained silent.
ACCC, competition and costs
The first thing a Malaysian usually notices when he/she settles here is how expensive everything is except for cars, compared to Malaysia. One also tends to forget that the salary one earns here is also very "expensive" by International standards.
The two main reasons which I speculate for the high costs are:
i) Real estate prices
ii) Low volume due to small population size
Real estate prices determine a lot of costs in our lives. It determines our of our main cost to our household income; either in the form of rents or home mortgage repayments.
For businesses, it determines one of the main elements of its cost structure especially if the business is in retailing e.g. a shop lot in a shopping mall. This is probably a key reason why many top brands are only deciding to set foot in Australia after setting up shop in other parts of the world e.g. H&M only set up shop recently with UniQlo following very soon.
The low volume due to the size of Australia's population is also a major cause for how expensive things are here. Contrast this to the price of goods in USA which has nearly 15 times of Australia's population. Due to this, it is not uncommon for many international brands to price their goods much higher to compensate for the lower economies of scale. Just walk into Ikea and see the difference in prices for identical products in Malaysia.
However despite the high prices here, the Australian Competition and Consumer Commission (ACCC) enforces a law designed to ensure fair competition within the marketplace. Several examples of how the ACCC function can be seen as follows:
i) Car brands cannot compel or force new car buyers to service their cars with the authorised reseller; i.e. one can service their car anywhere without voiding their new car warranty (with certain conditions)
ii) One can cancel an insurance policy at anytime and obtain partial refund for unexpired period without significant or no penalties (there is also a cooling off period of 30 days when buying a new policy)
iii) All phone numbers including land lines are portable i.e. subscribers can move phone carriers and keep their existing phone number
Which brings me to my recent experience with the world of switching.
I joined a free online campaign called "One Big Switch" who were looking for members to bring down prices of home and contents insurance policy. They attempt to bring collective buying power back to consumers by negotiating on behalf of its online members with major insurance underwriters.
The campaign eventually managed to secure the service of one insurance company, and then within a certain period of time, allows member subscribers the option to seek a quote and secure the new insurance policy if they feel that the savings is substantial and the insurance coverage is comparable. I was shocked to find out that I saved about 1/3 of my insurance premium by switching under this campaign.
The moral of the story, there is no longer customer nor brand loyalty...shop and swap around. It is the way how businesses are conducted and, the ACCC is here to ensure we are able to continuously seek and shop for the best deal.
The two main reasons which I speculate for the high costs are:
i) Real estate prices
ii) Low volume due to small population size
Real estate prices determine a lot of costs in our lives. It determines our of our main cost to our household income; either in the form of rents or home mortgage repayments.
For businesses, it determines one of the main elements of its cost structure especially if the business is in retailing e.g. a shop lot in a shopping mall. This is probably a key reason why many top brands are only deciding to set foot in Australia after setting up shop in other parts of the world e.g. H&M only set up shop recently with UniQlo following very soon.
The low volume due to the size of Australia's population is also a major cause for how expensive things are here. Contrast this to the price of goods in USA which has nearly 15 times of Australia's population. Due to this, it is not uncommon for many international brands to price their goods much higher to compensate for the lower economies of scale. Just walk into Ikea and see the difference in prices for identical products in Malaysia.
However despite the high prices here, the Australian Competition and Consumer Commission (ACCC) enforces a law designed to ensure fair competition within the marketplace. Several examples of how the ACCC function can be seen as follows:
i) Car brands cannot compel or force new car buyers to service their cars with the authorised reseller; i.e. one can service their car anywhere without voiding their new car warranty (with certain conditions)
ii) One can cancel an insurance policy at anytime and obtain partial refund for unexpired period without significant or no penalties (there is also a cooling off period of 30 days when buying a new policy)
iii) All phone numbers including land lines are portable i.e. subscribers can move phone carriers and keep their existing phone number
Which brings me to my recent experience with the world of switching.
I joined a free online campaign called "One Big Switch" who were looking for members to bring down prices of home and contents insurance policy. They attempt to bring collective buying power back to consumers by negotiating on behalf of its online members with major insurance underwriters.
The campaign eventually managed to secure the service of one insurance company, and then within a certain period of time, allows member subscribers the option to seek a quote and secure the new insurance policy if they feel that the savings is substantial and the insurance coverage is comparable. I was shocked to find out that I saved about 1/3 of my insurance premium by switching under this campaign.
The moral of the story, there is no longer customer nor brand loyalty...shop and swap around. It is the way how businesses are conducted and, the ACCC is here to ensure we are able to continuously seek and shop for the best deal.
Sunday, April 27, 2014
Tyres, safety and compliance
As many of you would have known, Australia is fully of compliance. There is compliance against bullying or discrimination at the workplace and there is also the famous Work, Health & Safety (WHS) regulations which is much more onerous that the version in Malaysia.
The WHS here covers many areas and may even include whether one can change the light bulb at your workplace or whether one needs to buy insurance whenever a tradie comes to your home to repair or fix your house.
Last weekend, I happened to be at a reputable tyre shop to change tyres to my car. As I was in the waiting lounge, waiting for my tyres to be replaced, in came a man with some enquiry which I happen to overhear.
It goes something to the effect that he had a tyre which was either bald or nearly bald i.e. not legally allowed to be on the road, which had a nail embedded in it. He wanted the nail removed and the tyre patched to be either reused or as a spare.
The staff manning the counter at this shop told him that they (the shop) cannot comply with his request due to safety and duty of care, as the tyre itself was no longer road worthy. Hence they are legally not allowed to repair nor allow this tyre to be on the road ever again (even as a spare).
He either had to discard this tyre or get a new one as a replacement, NO repair is allowed.
I cannot imagine this scenario ever happening in Malaysia, but it goes to show the level of compliance and trust built into the system here in Australia.
One can imagine the scenario in Malaysia, where the shop would comply to the customers' request and collect a fee for the work done.
The WHS here covers many areas and may even include whether one can change the light bulb at your workplace or whether one needs to buy insurance whenever a tradie comes to your home to repair or fix your house.
Last weekend, I happened to be at a reputable tyre shop to change tyres to my car. As I was in the waiting lounge, waiting for my tyres to be replaced, in came a man with some enquiry which I happen to overhear.
It goes something to the effect that he had a tyre which was either bald or nearly bald i.e. not legally allowed to be on the road, which had a nail embedded in it. He wanted the nail removed and the tyre patched to be either reused or as a spare.
The staff manning the counter at this shop told him that they (the shop) cannot comply with his request due to safety and duty of care, as the tyre itself was no longer road worthy. Hence they are legally not allowed to repair nor allow this tyre to be on the road ever again (even as a spare).
He either had to discard this tyre or get a new one as a replacement, NO repair is allowed.
I cannot imagine this scenario ever happening in Malaysia, but it goes to show the level of compliance and trust built into the system here in Australia.
One can imagine the scenario in Malaysia, where the shop would comply to the customers' request and collect a fee for the work done.
Saturday, April 26, 2014
What has happened?
It has been close to five years since we arrived in Sydney. This blog has been dormant for quite some time and I've decided to revive it again, time permitting.
So what has happened so far? Some of the milestones achieved so far include:
a) Changed two employers
b) Completed a Certificate IV Course in Carbon Management when carbon taxes were in the daily news
c) Completed a Graduate Diploma leading to membership with the Governance Institute of Australia
d) Joined millions of Aussies in home ownership with a bank mortgage
e) Bought my first new car with an added mortgage
f) Kids are settled down well and coping reasonable well is school with the elder one in high school
What has so far been the lessons learnt since we moved here:
i) Getting a job is VERY difficult, I know of people who are continuously in temporary positions without reasonable level of certainty in their role
ii) Home ownership is expensive, much more compared to other parts of the world
iii) You need to obtain council approval to cut down trees in your back yard
iv) Sydney is a very expensive city to live, I guess you can't have it both ways as it has one of the highest wage rates in the world (hence also why getting a job is difficult)
v) The Authorities here are generally more forgiving as they give you the benefit of the doubt and are more trusting (I guess its part of the system here as people are more honest generally)
vi) Many Asian families continue to put pressure on their children similar to the way back in Asia and competition for good schools is keen although less compared to Asia
vii) We still eat Asian cuisine most of the time
viii) People generally change cars and homes frequently
ix) Setting up your own business is easy and selling/ buying businesses are common
So what has happened so far? Some of the milestones achieved so far include:
a) Changed two employers
b) Completed a Certificate IV Course in Carbon Management when carbon taxes were in the daily news
c) Completed a Graduate Diploma leading to membership with the Governance Institute of Australia
d) Joined millions of Aussies in home ownership with a bank mortgage
e) Bought my first new car with an added mortgage
f) Kids are settled down well and coping reasonable well is school with the elder one in high school
What has so far been the lessons learnt since we moved here:
i) Getting a job is VERY difficult, I know of people who are continuously in temporary positions without reasonable level of certainty in their role
ii) Home ownership is expensive, much more compared to other parts of the world
iii) You need to obtain council approval to cut down trees in your back yard
iv) Sydney is a very expensive city to live, I guess you can't have it both ways as it has one of the highest wage rates in the world (hence also why getting a job is difficult)
v) The Authorities here are generally more forgiving as they give you the benefit of the doubt and are more trusting (I guess its part of the system here as people are more honest generally)
vi) Many Asian families continue to put pressure on their children similar to the way back in Asia and competition for good schools is keen although less compared to Asia
vii) We still eat Asian cuisine most of the time
viii) People generally change cars and homes frequently
ix) Setting up your own business is easy and selling/ buying businesses are common
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