Foreign Perspectives

Archive for the ‘Business’ Category

These days most people wouldn’t even think about travellers cheques. After all, surely the pre-paid cash or debit cards are far more practical and they’re accepted everywhere too, aren’t they?

Whilst it’s true that they’re accepted in most places, cards aren’t accepted everywhere. Even in those places where they are usually accepted there are occasional technical problems that crop up, sometimes quite frequently in relatively isolated places where not having an alternative method of payment would cause significant complications for you. Don’t think that these are places that only intrepid explorers will reach because the technical problems can crop up quite often in country areas of the most civilised of countries. Usually, of course, they happen in the most difficult of places and awkward of times.

For most places, you don’t need to consider travellers cheques as a primary means of payment basically because they’re too expensive as they usually involve both costs in purchasing them and again when using them (check if you can use them like cash rather than needing to cash them in a bank branch). However, it’s worth buying around US$250 or so for those awkward times when you really do need them. For maximum flexibility, it’s best to buy Visa or Mastercard branded cheques issued by a non-American bank (Thomas Cook is the brand that seems best known worldwide). Don’t cash them when you get home as they’re valid indefinitely and repurchasing them for each holiday just increases the cost for you.

Keep a note of the cheque numbers, cancellation phone numbers, when you bought them and where you bought them as you’ll need this information if they’re stolen.

So, yes, despite all the promotion of prepaid cards these days, it is worth keeping a few travellers cheques.

We’ve been helping out at the book fair in the school this week which provides a different perspective to some of the money making activities that schools need to get involved in these days.

The first thing that’s noticeable is that the school don’t get cash commission from the sales that they make but instead get that commission in the form of books. Thus what looks like a fairly high rate of commission is actually a good deal less in practice and probably little more than 10% for the company.

The books on offer are from one educational publisher which makes the selection more limited than it really needs to be. Well, seemingly more limited than it needs to be as one of the problems is that the books all need to be suitable for children so they could easily run into difficulties were a general publisher to be used. In fact, a growing problem seems to be that people generally are moving online for their purchases which is particularly understandable this year as the discount vouchers previously issued to the children aren’t there any more whilst the books are all at full price and these days nobody pays full price for books. So, why don’t the schools just put a link on their websites and join the internet sales rush? Basically because the link would have to be to only childrens’ books and there isn’t anything fitting the bill at the moment.

Being tied in to a single supplier is rarely a good idea and this is no exception. For all of the items that I’ve checked, the Scholastic price is around 20% to 30% higher than the Amazon price which probably goes some way to explaining the very low sales at the book fair.

This recession is turning into a much longer and deeper one than anyone expected which is becoming more visible to a wider range of people as time goes on.

Individual house sales are a fairly rare event for most people so we’re still seeing people putting houses on the market at prices based on a purchase price from a few years ago which, in many cases, was a higher price than the current market will support. That houses won’t sell at these prices is obvious but in many cases the owners simply can’t afford to sell them at the current prices so they add to the collection of “for sale” signs which in turn make things seem a little bit worse as their numbers build. As an example of how far away from the current prices these can be take the example of a house a few hundred yards from me which was bought at the peak of the market at around £300,000 whereas identical houses are now selling (slowly) for around £170,000. Had those people bought on an 80% mortgage they’d need house prices to rise another 40% from their current level just to cover the mortgage.

However, even when houses are priced at an appropriate level that still doesn’t mean that they’ll sell quickly as once a buyer is found and the house is taken off the market it’s quite likely to get the “for sale” sign back as buyers frequently can’t get mortgages: in one local case it took three buyers before reaching one who could get a mortgage.

Sadly all this means that people will be stuck in their houses potentially for decades if they can’t simply write off what could be a substantial loss.

If you’re a young driver then insurance companies are basically going to assume that you’re a bad driver simply because of the statistics.

However, clearly not all young drivers are bad drivers. But if you’re one of the good ones, your problem up to now has been proving it. That’s where technology has finally come in for young drivers car insurance in the form of what’s essentially a consumer version of the device installed in trucks to keep track of the driving habits of the professional drivers.

What this does is to record your driving so it’ll keep track of the length of your journies, your speed, how fast you accelerate and brake, etc. From this the insurance company doesn’t need to assume anything about your driving as they can see exactly how you drive which, hopefully, will lead to lower insurance rates for those young drivers who are good drivers.

Stories like the 30k couple with 11 kids are appearing with increasing regularity in the press these days and, as usual, it’s collected the expected collection of comments expressing various degrees of indignation that these people feel that the state (ie us) should pay them to look after their kids full-time.

But, why would they bother to look for work if they were getting 30k coming in for doing nothing? Actually, it’s somewhat more than that as there’s the 15k to add on for the house and together that’s equivalent to a pre-tax salary of at least £60,000. Even with the best will in the world to find work, they’d need great qualifications to find a job paying anything like that level anywhere in the country. Thus, they can quite validly say to the benefits office that they are unable to find suitable work.

As most of these people say, it’s not their fault that they’re entitled to so much. Despite the comments that such cases always attract, they are quite correct once they’ve reached the situation of having double digit numbers of children. That’s not to say that it’s right that they should be entitled to so much though because it just isn’t. Where the benefits system falls down with people like this is that it’s designed for reasonable people who are expected to have the intention to behave in a reasonable way in regards to their family, looking for work, etc. Reasonable people don’t expect other people to pay for enormous families but there is no limitation in the rules that says “five is enough” or anything similar. Thus, in principle, you could have a family with, say, 20 kids pocketing over £100,000 and perhaps there is such a family out there.

How many would be “enough” children though? Would it be, say, three because that’s just over the average for the country? That seems a reasonable point to start reducing benefits for numbers above that. However, what do you do with someone like Miss Shepherd (the case mentioned above) who has had the children to three different fathers? You might think that would be difficult to deal with but it’s not really if you allocate the “reasonable number” of kids to each parent ie not “three per family” but “1 1/2 per parent” so you could quite easily allocate the allowances.

Whatever way such changes come in, as they surely must do, there are going to be screams from those benefiting from all that money now. It’s never going to be easy to get such people to change their attitudes because they’ve built up over such a long period but the “someone else can pay” attitude needs to get stamped out and soon.