Large interest rate drop

[steveb1]

He also said "15 or 13 percent is now not that attractive at all"
it is a lot more attractive than the 3.6% i get in the uk
all i am saying had you wanted to play the money game there has been a lot of opportunities to make money as well as lose it.

[stoop]

quote:Originally posted by starman

The TL has lost 11% value since new year, add on the inflation rate and you will then see that 15 or 13 percent is now not that attractive at all.

Read it in context and it makes more sense.

[stoop]

Simple Math:

Invest £100k and get 13% interest = £13000

Lira devalues by 11% over the year and your £100k is now worth £89k if you change it back

So in real terms you now have £89k + £13000 = £102k

THEN you have to take into account tax to pay (3%?) on your income so £13k x 3% = £390

£102k - £390 =  £101.61k

THEN you should really (if you want to stay withing the UK law) declare the interest on your UK Tax return so that they can add it to your income and deduct tax at your marginal rate.

So unless you are really prepared to keep your money in YTL should it start to devalue against the £ then you should be very careful what you invest.

Would I do it?

Yes - if I had £50k+ that I didn't really see me needing to access for many years to come, if ever at all.


Of course the YTL could always go in the other direction and you could make on both counts

[lance]

Stoop would you fare better having gov bonds which pay extra 10% i think you can have up to 20% off your total and do you have to pay tax on the bonds over a one year period.

[stoop]

Lance - if I knew the best investment vehicles 100% of the time I would be a rich man with a villa in the South of France.

The only advice I can give is - work out how much risk you can afford to take and balance that against the amount of return you want. Just remember that usually the HIGHER the RETURN the HIGHER the RISK.

[steveb1]

Stoop i don't think you have to take a one line statement of fact in context

 The point i was making is you can always pick a time span that one currency losses to another
I could tell you of thousands of people that wished they had put money in Turkish banks other
than Other investments over the last year
 I have been playing with the exchange rate and interest rate in turkey for the past 8 years and am still well up on the deal There seems to be a lot of people saying don't do this or that turkeys to risky i just don't think it is any more risky than any other you just Have to use common sense and take your time

[kevin b]

If you change lira to sterling when lira rate is low against sterling then change back the other way when lira picks up do you pay tax on the profit made like you would if it was in an interest account taking into account the fact you were no longer a UK resident.

[stoop]

quote:Originally posted by steveb1

Stoop i don't think you have to take a one line statement of fact in context

 The point i was making is you can always pick a time span that one currency losses to another
I could tell you of thousands of people that wished they had put money in Turkish banks other
than Other investments over the last year
 I have been playing with the exchange rate and interest rate in turkey for the past 8 years and am still well up on the deal There seems to be a lot of people saying don't do this or that turkeys to risky i just don't think it is any more risky than any other you just Have to use common sense and take your time

"Of course the YTL could always go in the other direction and you could make on both counts"

[starman]

Stoop, can you make a calculation and do a good explaination as you did above.
My point I am trying to make is those that come over hereto retire are looking at being here from 10-20 years or more.
If someone invested 100,000 sterlin into lira 15 years ago, and only took the interest to live on, how much interest would they be earning now and how much would their initial investment be worth?

[stoop]

Starman- going out now but I'll give it a go later.