Personal Finance Around The World – Round II

by J. Money - Published August 8, 2018

money around the world
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I started a series a while back on what money’s like in different parts of the world, but then promptly forgot about it until this morning when I received a note about life in Australia :)

You can’t base an entire country’s perception on just one financial sliver, of course, but it sure does make for some interesting reading/learning, and thus we revive the series today and head into Round II!

Last time we covered Singapore, Denmark, Brazil, Guatemala, Germany, New Zealand, and France, and this time round we head to Australia, India, Dubai, Kenya, Jamaica, and Cambodia.

Big thanks to everyone who passed these over to me! If you’ve got anything to add, please do so below in the comments.

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Early Learning in Australia

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“I’m from Adelaide, Australia and I’m working full time trying to save up for my short and long term goals. Which is of course to be FIRE, but to have enough time to be able to enjoy the things in my life, my family, my future family and to be financially stable that I can be able to enjoy these things without a thought in my mind.

I have spent some time in the US, and things are a lot different over in Australia when it comes to youth and finance. It seems like a lot over in the US even in mid to late twenties have almost nothing to their name, but here in Australia I would say most young people are really switched on financially. We are taught in school about saving money, and most people here don’t need university or college etc., and start working at 18 like I did straight from school. It’s quite easy to earn a decent modest income with no qualifications or degrees.

So we start working and saving earlier. Real Estate and cost of living over here is quite expensive so I think a lot people naturally are concerned about finances earlier. Of course this doesn’t apply to everyone but I would say a good majority. I think that would be music to your ears that a lot of young ones are thinking about finances earlier.”

– Evie

Music to my ears indeed! I’m not sure how I feel about the “not needing college” part, but she’s def. on point about the state of our younger generation not having much to their name, ugh… Getting more financial education in our schools would def. be a great start!

ADDENDUM: Here’s what another Australian had to add too (“Jo” down in the comments): “The one thing I would add about Australia is that we have compulsory employer Superannuation Guarantee; employers currently pay 9.5% of employees wages into a superannuation fund. There is quite a bit of contention around superannuation with the fees charged and the age that it is accessible, but it does mean Australians have a bit of ‘forced retirement savings’.”

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Guaranteed Returns in India

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“In India, there is a Public Provident Fund in which you can invest up to Rs. 150,000 per year (roughly $2,180 U.S.). The guaranteed rate of return is around 8% right now (used to be 12% in the nineties, so its slowing reducing). And this interest is tax free.

The best deal is for Indians living abroad (NRI – Non Resident Indian). They can open deposits in Indian banks for any amount and get tax free 8% return! Doesn’t get any better than this.”

– Francesca,

WOWWWW had no idea on this! A *guaranteed* return, can you imagine? And tax free?? It still wouldn’t stop people from blowing their money on stuff here in the States, but it would sure come in handy the moment you finally have your epiphany and are ready to rock :)

ADDENDUM: Here’s more insight on these guaranteed returns from Aparma who runs an Indian personal finance blog (in English), : “While PPF and Cash Deposits (mostly referred to as FD, short for Fixed Deposits) are risk free with 7.5%, inflation in India is also that much higher at over 6%. You can see a comparison in the home loan interest rates itself where the home loan interest rate in India is at 8-8.5% and in the US it is a mere 1 or 2%. The real story in India though is the growth story which is seen better in the equity markets. Actively managed funds still perform better and index funds are yet to make a dent. In the last 5 years, a LOT of the actively managed funds have delivered a 15%+ return so the invested money could easily have doubled.”

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Not Messing With Debt in Dubai (UAE)

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“Our friends moved from the UK to Dubai (where it is tax free) and it’s a criminal offense to leave the country whilst in debt. So if you have a car on finance, you cannot leave with country with the car, if you have not paid it off.

They also don’t have a bankruptcy law, and there’s various other things they are very strict on regarding debt.”

– Francesca,

This reminds me of how we used to have here in the early days of our country… And just how serious debt actually is! Not sure I’d want such a hardcore rule here, but it would def. get us thinking twice before overextending!

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Mobile Banking in Kenya

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“60 Minutes had a fascinating segment on , a digital form of banking big in Kenya and slowly spreading to developing worlds. Basically, it enables exchange of currency through mobile phone secure SMS and internet. For areas where banks don’t exist (and therefore cash is difficult to obtain) it has made getting paid and spending money much easier (80% of Kenyans have a mobile phone).

It’s sort of like Android Pay on steroids, as while Android Pay requires a bank account attached, M-Pesa is the actual bank. It seems to have done great things for unbanked areas in Kenya and the low income population as a whole. You should look up the segment if you’re interested. :)”

– Tara

I still find it so incredible how pervasive cell phones and laptops are now, and just how LIFE CHANGING they have become for certain things. And it’s all still relatively new! Of course it’s disrupted other areas of life for the *worse* as well, but probably have done more good than bad when all lined up… And especially with this mobile banking stuff – love it.

ADDENDUM: Samuel Wachira on Twitter () also added this: “Correct. Mpesa is part of Kenya’s money culture. Approximately $4.68 billion is transacted each month on the Mpesa platform. That’s like 15% of the Annual National Budget.”

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Skipping Mortgages in Jamaica

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“In Jamaica, mortgage loans are uncommon, which is why you see half-finished homes with rebar sticking up out of the cinder blocks. People buy their construction materials paycheck by paycheck, and finish the house over years rather than months.”

Oh man, what a feeling it must be to finally have it completed after all those years! I bet you’d appreciate your home 10x more going through such a timeline too, on top of actually owning it *outright* when all was said and done. I couldn’t tell you of a single person who paid cash for their house and not get a mortgage, can you? RVs and Tiny Homes excluded? ;)

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Storing Wealth in Cambodia

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“I’ll add the Cambodian money management methods I learned from my parents-in-law (who escaped Cambodia literally dodging bullets the whole way out through the jungle).

They don’t trust the government or banks really. Wealth is stored in gold. 24k jewelry primarily. And the woman of the house usually has it hidden in a purse that she carries everywhere she goes. That junk gets heavy. So if you ever want to make a few hundred thousand dollars, find your nearest Cambodian house party and snatch a bunch of old ladies’ purses (j/k; not responsible for lengthy prison sentences and/or retaliation from angry Cambodian grandchildren).

We did get my mother-in-law to put some in a bank account, but it’s barely keeping up with inflation (yielding 1-1.75% today between money market and CD rates).”

– Justin,

I’ve got nothing to add on this one, haha… outside of just saying there are a TON of expats living there and doing good in the community, and it looks to be a beautiful place!

ADDENDUM: Here’s a look at the cost of living from a reader who is about to move there temporarily: “I will be living in Cambodia where I can get a single room with a shower for under $200/mo in Siem Reap. I will live there from June through September. After the room and food and other miscellaneous expenses, I will be able to save about $1,400/mo. By the time I leave Siem Reap from June 2018 through September, I will have saved $15,094 US!”

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And that’s it for Round II here… If you’ve got anything you can add to these, or want to share experiences/knowledge on other countries not listed, please do so below or by emailing me directly: j (at) budgets are sexy (dot) com.

Pretty crazy how different it can be around the world, right? I’ll try to keep these up better so we can continue learning over time :)

If you missed the first round, you can check it out here: How Money’s Handled Around The World (featuring Denmark, Brazil, Guatemala, Germany, New Zealand, and the oui sexy France)

{ 36 comments… read them below or add one }

1 [HCF] August 8, 2018 at 6:45 am

Wow, interesting facts. It is it is fascinating how different is the approach to money in different parts of the world. Love this series, keep making them ;)

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2 Cathy August 8, 2018 at 8:20 am

I am Australian and don’t agree with Evie about university – pretty much everyone I know/grew up with went on to get a university education, and while that was a few years ago I think the number of people going to uni has gone up since then. I’m sure you can get a reasonable job without it but I would have said it was common to do a university degree there. That’s my experience, anyway.

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3 J. Money August 8, 2018 at 9:44 am

Thanks for chiming in! Interesting to see everyone’s different perspectives around this, and as a fan of college myself, I’m glad you report otherwise ;)

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4 Julie August 10, 2018 at 12:11 pm

I think it definitely depends on demographics, just like in the U.S., about how many go to on to University in Australia. My husband is Australian (we live in the U.S. now) and he was the first in his family to go to University. He has about 30 first cousins and only about 5 of them (including his brother, but not his sister) went to Uni. It might not even be that many. And of the “little cousins” we call them (kids of first cousins), only a handful of them went to Uni also. Many of them went to the equivalent of a community college or did an apprenticeship and became certified in a trade. But, many just went straight to work. I am always shocked when yet another cousin graduates high school and I find out that they aren’t going to University either. It’s a different mentality than what I grew up with, where it was just an assumed next step. And most of our Australian friends went to University, but in my husband’s (big) family, it’s definitely not the norm. Granted, they have all managed to be pretty successful.

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5 J. Money August 10, 2018 at 6:10 pm

Very different for me too having grown up the same! I had no say in whether I was going to college or not, and looking back I’m super grateful for it as who knows what I would have chosen on my own :)

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6 Jo August 8, 2018 at 8:22 am

Yay! Adelaide represent! :) Never thought I’d see my hometown mentioned on Beautyofbali! The one thing I would add about Australia is that we have compulsory employer Superannuation Guarantee; employers currently pay 9.5% of employees wages into a superannuation fund. There is quite a bit of contention around superannuation with the fees charged and the age that it is accessible, but it does mean Australians have a bit of ‘forced retirement savings’.

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7 J. Money August 8, 2018 at 9:45 am

Oh wow – that’s high! You guys are gonna be so much better off than many here in the States with that forced savings. We’re gonna have an ugly wake up call here as the decades pass :(

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8 Dave August 8, 2018 at 8:25 am

It is really interesting how money management is different outside of the USA. A guaranteed 8% in India is amazing. I have met a few Australians in my life and they seemed to be prudent with their money. There are many lessons to learn from outside of our boarders.

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9 Zach August 8, 2018 at 8:47 am

Thanks for posting! I can’t imagine carrying around my gold (if I had any) everywhere I go. I can’t imagine that would be safer than just hiding it in your house.

In the USA – I bet there would be far fewer McMansions around if you had to build it by yourself and had to go paycheck to paycheck to do it. I would start building a decent sized house, but after a few months of hauling cinder blocks and rebar I would probably settle for a studio floor plan!

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10 J. Money August 8, 2018 at 9:47 am

100% TRUTH haha… I mean, just a handful of decades ago there wasn’t that much credit or loans being passed around here! And we did live in much smaller homes (and were just as happy with it ;)).

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11 Janet August 8, 2018 at 9:02 am

I love this series and really hope to see more in the future!!

I’ve been living in Switzerland for 2 years now and am extremely surprised by how differently the Swiss manage their money compared to North Americans. First of all, most Swiss don’t use credit cards. Instead, they carry around ample amounts of cash. I’m talking 100 and 200-franc notes (1 franc = $1) and beyond!

In my 2 years of living here, I haven’t even been able to find an ATM that spits out denominations lower than 50 francs. Can you imagine having to withdraw a minimum of 50 bucks every time you need cash!?

If you go to a shop to pay for a one-franc item, it’s not uncommon or even frowned-upon to pay with a 100 or even 200-franc note. Shopowners will gladly accept bills of any denomination, and most times without even checking if the bill is real! I once even saw a girl paying for a 10-franc item with a 1,000-franc bill! I was shocked that (a) the shopowner accepted a 1,000-franc note and didn’t ask for a smaller bill, (b) the shopowner had enough cash on hand to provide 990 francs in change, (c) the girl was carrying a 1,000-franc note to begin with and (d) that 1,000-franc notes even exist at all.

One final remark. A lot of Swiss, especially the older generation, still pay all of their bills with cash at the post office. At the beginning of every month, the post office gets pretty crowded with Swiss people carrying literally hundreds or even thousands of francs in cash to pay their monthly bills! It’s a funny sight to watch, believe me!

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12 J. Money August 8, 2018 at 9:49 am

HILARIOUS!!!! And love every bit of this! Haha… Especially as a coin/currency collector myself :) I dread the day when everything goes digital and hope it’s outside of my lifetime!

Marking this to be spread in our next round of foreign money here – thank you! Best thing I’ve read all morning!

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13 Joe August 8, 2018 at 9:17 am

Very cool. I like this series.
The 8% guaranteed ROI in India sounds too good to be true. What’s the inflation rate?
I have an aunt in Australia and my cousin is going to college next year.

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14 Brian August 8, 2018 at 11:51 am

That was my question. Is it 8% real return or just 8%. Because if they experience much inflation that amount doesn’t seen so great.

Then again, I don’t know what other investment options they have available

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15 J. Money August 8, 2018 at 12:01 pm

A financial blogger in India () just reached out and answered exactly that ;)

“While PPF and Cash Deposits (mostly referred to as FD, short for Fixed Deposits) are risk free with 7.5%, inflation in India is also that much higher at over 6%. You can see a comparison in the home loan interest rates itself where the home loan interest rate in India is at 8-8.5% and in the US it is a mere 1 or 2%.”

She also added the following which is also pretty interesting!

“The real story in India though is the growth story which is seen better in the equity markets. Actively managed funds still perform better and index funds are yet to make a dent. In the last 5 years, a LOT of the actively managed funds have delivered a 15%+ return so the invested money could easily have doubled.”

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16 Mr. Pop August 8, 2018 at 9:22 am

Holy Crap! That 8% non-taxable Indian fund is an amazing deal.

The tax-free status in Dubai has always been interesting. Several of my collegues in my “old life” moved there for work. On top of the tax breaks, they got raises because nobody else wanted to go! Their wives were less than thrilled with the situation…

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17 J. Money August 8, 2018 at 9:50 am

I would probably try to convince my wife to head out there too, haha… At least temporarily until we hit FIRE and then hightail it right on back here!

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18 Lily | The Frugal Gene August 8, 2018 at 10:23 am

Super interesting! I didn’t know about any of these, esp. Jamaica. 8% tax free sounds great but I think we have that here…not guaranteed…but not a bad shot at 8% if you’re holding it a loooong time ;)

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19 J. Money August 8, 2018 at 12:03 pm

This is true… so long as people *actually* invest their money :)

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20 Shak August 8, 2018 at 8:01 pm

Some information on 8% interest in India.

1. There is no guarantee for this 8% to be stable. It varies as you can see current rates here…

2. This is not tax fee. Interest on the NRE account and FCNR account are tax free in India. However, countries like the US, which levy tax on global income of its residents and citizens will tax this income. So while interest on NRE and FCNR accounts maybe tax free in India, a US resident or citizen would have to add this interest to his total income in the US tax return and pay taxes thereon.

3. NRE account will be in Indian Rupee not in US dollars. Eventually there is high risk of losing dollar value for your money over the years. Even recently (last 2 months) there was a huge drop in value against the $. On top of this you will lose value every time you transfer and convert. Better have it in $!!

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21 J. Money August 9, 2018 at 6:09 am

Yup, this article is basically to give you a glance of what it’s like managing money in different countries if you were living there – and a citizen – rather than an expat. Appreciate the links and info though :)

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22 Shak August 9, 2018 at 10:15 am

But in the article it says “The best deal is for Indians living abroad (NRI – Non Resident Indian). They can open deposits in Indian banks for any amount and get tax free 8% return!” and hence I clarified with point # 2.

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23 J. Money August 9, 2018 at 5:16 pm

Ahh yes, there was that one, huh? Good clarifying!

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24 August 9, 2018 at 4:01 pm

You’re going to get a LOT of Aussies leaping over here to disagree with your Adelaidian about “not needing university or college etc”.
I’m a teacher in a large secondary school in Melbourne with 2,300 students. Every year we get a report on where our previous year’s year 12 kids have ended up. It’s always around the 96%, 98% mark that have obtained a place at uni.
The few that haven’t are either travelling, doing a trade apprenticeship or taking a gap year. Of my 4 sons, 3 are currently at uni taking courses in acting and music, while the other one is at TAFE (a more ‘hands on’ type of uni) doing remedial massage. The other one has finished uni and is out in the workforce as an accountant.
It’s perfectly possible to get through life without a degree, of course. But for most people, it’s not something that they are interested in doing without.

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25 August 9, 2018 at 4:05 pm

Ok, ok, I’m an English teacher, not a Maths teacher and I’m typing at 6AM before I’ve finished my coffee. My previous comment should have read “2 are currently at uni”, not 3. Even I could tell, after I pressed the Submit button, that the numbers were a little off. I only have 4 sons, not 5!

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26 J. Money August 9, 2018 at 5:17 pm

Haha… Appreciate the insight regardless! And very much glad to hear as a fan of higher education myself :)

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27 Penny @ She Picks Up Pennies August 9, 2018 at 5:12 pm

Fascinating stuff, isn’t it? I am working on getting the bebes his first passport, and I was really struck by the giant notice on the paperwork that you cannot get a US passport if you owe more than $2,500 in unpaid child support. Hm.

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28 J. Money August 9, 2018 at 5:24 pm

Oooooh wasn’t aware of that one!

Every time I hear “child support” I think of a story I once read where they lured out all the deadbeat dads who were in default of paying their support by advertising “Free tickets” to our football team here, and then dozens of them showed up only to be locked up, haha… I’m not sure how they’re supposed to fulfill their support payments when in jail (there’s probably more to the story than just that), but always thought it was pretty creative :)

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29 Justin August 10, 2018 at 9:38 am

My Cambodian mother in law is internet famous! :)

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30 J. Money August 13, 2018 at 2:05 pm

There could be worse things to be internet famous for :)

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31 Vishal August 13, 2018 at 12:07 pm

In India, Majority of the money is being invested in real estate and jewelry. People in India are seeing it as a safe and sure investment. The equity market is still known by only 10% of the population.

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32 J. Money August 13, 2018 at 2:06 pm

Interesting!!

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33 Krystal August 14, 2018 at 11:40 am

Hey J. I disagree with the statement that physician on fire made about mortgage in Jamaica. I’m Jamaican (currently in Jamaica). It’s not a case where it’s uncommon. It’s just not an easy process to get a mortgage; if you do, the repayment terms are ridiculous. It’s too expensive. Also in most cases you can’t get a mortgage high enough to purchase a home unless you combine with someone else.

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34 J. Money August 14, 2018 at 1:55 pm

Ahhh… well thanks for the additional insight! Do you find it’s good or bad that it’s super expensive to get one there? I.e. do you see lots of people out of debt, or do you think it hinders growth?

Also – and most importantly – can I come visit you the next time I go out there? :)

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35 Krystal September 3, 2018 at 5:56 pm

I’m sorry about the late response J. It can be tricky to find time for yourself with a newborn. I’m sure you know that from experience. I think it’s bad that it’s expensive because it’s almost impossible to get a house on your own, so you’re forced to either get a house with a partner or live and add on to your parents house or land. Unfortunately, I’m surrounded by debtors. Debt is sold to us so aggressively. Why should we wait and save when we can get something immediately? Besides, everyone is doing it. Can you believe it’s easier to get a credit card than a savings account? As for growth, we’re pretty stagnant here. Unless something major changes, it’s going to get worse. Especially since our dollar is sliding.

P.S. just let me know when you’re coming so I can make time :)

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36 J. Money September 3, 2018 at 6:25 pm

“Can you believe it’s easier to get a credit card than a savings account?” – WOW

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