After reading about
possible appreciation later this year for China's currency against the U.S. Dollar, both my first thoughts and my wife's were to pay back my father-in-law immediately for the money we borrowed (in part) to purchase our home and office. But if you read that phrase carefully, that implies we've had the money all along sitting in our money markets earning almost no interest while personal debts were still outstanding. Why did we just pay off the loans as early as possible?
Some of the reasons seemed logical. Since my creditor was not charging interest, we were extending the repayment schedule to keep reserves for possible tax bill and/or business opportunities. But a bigger part of our decision was an attempt to keep my wife's family somewhat in the dark about our financial balance sheet. When we made our first repayment, we wrote a check for $10K while simultaneously doing a wire transfer for another $1500 and hitting the ATM for $300 every day. My father-in-law's first statement was "woah, do you guys have enough money for all this?" That's when I knew we had overdone it and should have paid back a little less. Recent interactions about money expectations have reinforced my initial suspicion.
Now there is only so much hiding we can do. The U.S.
per capita purchasing power parity is $46,443 compared to China's at $6,546. However, the regular Chinese people's experience with Americans
tend to be with new immigrants who might only earn 2/3rds of the median. And the average American household does not have the flexibility to move overseas and maintain their income. Hence, long-term foreigners are tilted towards those employed by multi-nationals on generous expat packages, older retirees making their dollars last longer or business owners looking for new ventures. The 1st don't exist in Taishan and we're obviously not the 2nd -- so when you have a young couple with relatively free daytimes (ie, when everybody else is at work) living in an upscale gated community and able to withdraw the average worker's monthly salary from an ATM every day -- people can guess our incomes are above the American average.
This means despite my occasional devil's advocate arguments on internet forums about financial transparency, experience is tells me to keep it more mysterious. When talking about money with family and friends, play up expenses, taxes, cost of raising kids, cost of college in the future, the impending rising RMB and so on. In past years, my wife would commiserate with friends about taxes but this year, she doesn't dare mention that we no longer qualify for the child tax credit as that is just beyond the realm of experience of her friends back in the U.S. Their first reaction would be "you need to see an accountant to double-check your returns as *everybody* with kids gets the child tax credit".
So how did we accelerate our loan payments without raising questions about our bank balances? My wife claimed we borrowed the money from my mom making this only a debt "refinance". As an aside, my mom is the one person I am honest about my finances with. She is an accountant through-and-through and has very clear delineation on money.
(Filed in philosophy)
Keeping cards close to vest
Posted by Mossy
March 12, 2010 2:34 AM
Some of the reasons seemed logical. Since my creditor was not charging interest, we were extending the repayment schedule to keep reserves for possible tax bill and/or business opportunities. But a bigger part of our decision was an attempt to keep my wife's family somewhat in the dark about our financial balance sheet. When we made our first repayment, we wrote a check for $10K while simultaneously doing a wire transfer for another $1500 and hitting the ATM for $300 every day. My father-in-law's first statement was "woah, do you guys have enough money for all this?" That's when I knew we had overdone it and should have paid back a little less. Recent interactions about money expectations have reinforced my initial suspicion.
Now there is only so much hiding we can do. The U.S. per capita purchasing power parity is $46,443 compared to China's at $6,546. However, the regular Chinese people's experience with Americans tend to be with new immigrants who might only earn 2/3rds of the median. And the average American household does not have the flexibility to move overseas and maintain their income. Hence, long-term foreigners are tilted towards those employed by multi-nationals on generous expat packages, older retirees making their dollars last longer or business owners looking for new ventures. The 1st don't exist in Taishan and we're obviously not the 2nd -- so when you have a young couple with relatively free daytimes (ie, when everybody else is at work) living in an upscale gated community and able to withdraw the average worker's monthly salary from an ATM every day -- people can guess our incomes are above the American average.
This means despite my occasional devil's advocate arguments on internet forums about financial transparency, experience is tells me to keep it more mysterious. When talking about money with family and friends, play up expenses, taxes, cost of raising kids, cost of college in the future, the impending rising RMB and so on. In past years, my wife would commiserate with friends about taxes but this year, she doesn't dare mention that we no longer qualify for the child tax credit as that is just beyond the realm of experience of her friends back in the U.S. Their first reaction would be "you need to see an accountant to double-check your returns as *everybody* with kids gets the child tax credit".
So how did we accelerate our loan payments without raising questions about our bank balances? My wife claimed we borrowed the money from my mom making this only a debt "refinance". As an aside, my mom is the one person I am honest about my finances with. She is an accountant through-and-through and has very clear delineation on money.
(Filed in philosophy)
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