WEBMU 2011

WEBMU 2011 is getting some nice discussions happening. The current list of cities are... 

-Magdeburg
-Frankfurt
-Cologne
-Aachen
-Cologne
-Münster
-Somewhere in the Ruhrgebiet
-Nuremberg
-Düsseldorf
-Stuttgart
-a smaller town perhaps in the countryside
-someplace Ian can cycle to
-Anywhere
-Berlin

I am rooting for Cologne with the obvious bias, but it guess it will be the activities associated with the event that will make it a winner.

By the way, if you are a blogger and an expat living in Germany, feel free to drop by at WEBMU for a quick discussion, especially if you have a town or a city in mind.

Düsseldorf Rheinturm

Becoming bankrupt is easier than you think

The following is a guest post by Caramon Khan of PayPlan.

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Staying in control of your finances can seem like a nightmare at times. Controlling debt can be difficult at the best of times. With a static economy and rising prices many people ignore the problem and hope it will just go away. Beware though, do this and soon you could be facing the slide into bankruptcy. Avoiding bankruptcy and the stigma that goes with it can seem impossible. If you are at the situation where you no longer feel in control, take action. Putting together a debt management plan is a major and necessary part of that action

First of all admit there is a problem. Pretending that there are no problems in the face of mounting interest and charges is a perfect way to drop into bankruptcy without even realising it. Once you face up to your debt problems the issue of bankruptcy and the likelihood will become clear. Secondly, admit that you cannot keep control; there is no shame in that. If you do not, then the problem will just get worse. Too many people try to borrow their way out, thinking it is the answer. But, the debt will not magically go away. Last of all seek professional advice. Sit down with a debt professional and you will start benefiting straight away. If you feel confident enough, you can use a computer to make your own debt management plan. Although, if you have debt problems, then a professional will have more experience and authority when dealing with creditors.

What will a debt management company do and what is the benefit of a debt management plan? For a start you can get free initial advice and consultation. They will look objectively at your debt problems and see how dangerous they are. Next and most importantly your consultant will draw up a solid plan to manage your debt. This is vital, to allow him to approach your creditors and persuade them to join the plan. He will try to hold or freeze debts you have. Stopping interest and other charges is a massive step as it stops the 'snowball' effect on your debts.

A debt management plan will show the true extent of the debt problems. That clarity is quite sobering and a big wake up call. Seeing how close you might have been to bankruptcy shows how easy it is to lose control. But, it will also have your new month to month budgets so that you take control of your finances again. This will exactly lay out your new spend in detail. It will cut back on unnecessary items to allow a payment each month into your debts. The plan will usually aim to pay off your debts within three to five years.

Learning how to monitor and control debt, whether business or personnel is vital. Bankruptcy is not a fun experience as anyone who has gone through it will testify. A debt management plan is a sensible and practical way to relieve the burden and stabilise your life before it is too late.

Sold our house.

When we shifted to Germany, we had plans to service the mortgage by a combination of rental income and international money transfer from Germany. The house was rented essentially the day we flew out of Australia. This was a very good start. The exchange rate was about 0.65EUR to the aussie dollar. At that time, it was quite feasible for this arrangement to work quite well.

That was in the middle of 2009 when the GFC was in full swing. Fast forward to the end of 2011. The tenants have shifted out to buy their own house, and the exchange rate is at all time time for the aussie dollar at around 0.76EUR. This made is quite difficult for us to keep servicing the mortgage. When we fixed interest rate on our mortgage, we made a simple mistake. It was not the fixing of the interest rate as that was on the increase. It the length of time. We fixed it for four years and it was way too long.

The only that we could really do and be able to sustain some sense of normal life in Germany is to sell the house in Australia. Contribution to that decision are a couple of positives. 

Firstly, the housing market is still going strong in Melbourne so we will be getting a bit of profit. We have own the house for about four years, and over that four years, we have made about $30K. It is not spectacular, but it is welcomed.

Secondly, we avoid the hassle of managing the house from Germany. Even though we have an agent looking after the house in Australia, there are still a lot things that concern us. For example, we had to worry about how the marketing is going to get the new tenants, any damage to the house when the previous tenants shifted out etc.

When the house finally got sold, the deadly Queensland flood cause the settlement date to be delayed. The bank that the purchaser used were based in Brisbane and the floods caused the bank's system to be shutdown. I felt pretty bad that I had to impose a penalty on the purchaser as the delay was an "act of god", but I am sure that their bank will pay for the penalty at the end of the day.

A small introduction to the CGT.

After leaving in Germany for close to 18 months, we have put our house in Australia on the market and just sold our house in Australia. A couple of things stood out for me. One is how fast our house actually got sold, and secondly, CGT is a minefield!


From when we made the decision to put on the market to when we have signed contract, it took about 2 weeks. It is the quickest sale of a house that I have been involved it. The previous house sale that I was apart of took an average of about 4 weeks to sell. Now we have to wait for the banks and the lawyers to sort out the details and finalise the sale. We have opted for a 30 day settlement.


Now, CGT or Capital Gains Tax is a crazy thing, but I guess that it is the same with any tax law. For our situation where we have lived in the house for sometime before renting it out, we will be liable to have part of the profit subjected to taxation. Essentially, we can proportion the profit to the rental  period over the time which we have the house in our possession. In our case, the house was being rented for about 40% of the time we owned it, so only 40% of the profit is subject to CGT. The CGT portion is further discounted by 50% before it becomes part of your taxable income assessment. That is the simple version. There are other rulings that you can use to help minimise the liability. I may need to talk to a tax accountant.

Stereotypical

After reading a great post over a Cheeseburgers and Sauerkraut about being, among other things, feeling stereotyped, I felt it struck a core with me. 

After living in Germany for about 14 months, I must be quite lucky to have any stereotypes thrown at me. For one thing, the Australian culture does not a profile as high as that of an American or an Britain. Furthermore, I don't physically look like a stereotypical Australian.

In some ways, I stereotype the Germans more than the Germans stereotype me.

Liege, Belgium

My family wanted to get away for the weekend. As it was only for the weekend, we don't want to drive too long to reach it. After doing a quick search, we settled on visiting Liege, Belgium. It is about one and half hours drive from home, and the drive is almost all on the autobahn, so it is perfect.

The one thing that strikes me about Liege is the industrial nature of it. The general colour of the city is grey and black. Not too many green or blue. I also were quite taken back by ambience of the town, the people of the town are a bit on the depress side. Maybe I am more accustomed to the higher levels of living in Germany.

I have heard that food, more specifically food from the restaurant or cafe, are a bit more expensive than Germany. We had lunch at a local cafe in town, and it costed about 33€. Lunch consists of a three servings of open sandwiches for everyone, coffees for my wife and I, and a slice of cake. I would have expected to pay about 25€ back in Germany. Having said that, I must say that the sandwiches were absolutely delicious. The children also eat all of their sandwiches as well. The Belgians really do know how to do pastry food.

The October fun fair started the weekend we arrived, actually our weekend apartment is across the road from the fun fair. It is one of the largest in the region, with about 150 stalls. Our kids were a little bit too young for the majority of the attractions, they were mainly targeted towards to young adults. However, the lights and the sounds captured their imagination.

The usual suspects were at the fair, the carnival food of hamburgers and pommes frittes, the many bright lights and loud music, and the abundant spruikers tempting you to part with your money.

There were a new fair ride that I have not seen before. It is basic and looks quite terrifying. You sit in a open capsule, and the capsule is located at the end of a swing arm. There is also another open capsule at the other of the swing arm which can also hold passengers. When the ride goes, the swing spins in a vertical axis, very, very fast. It claims that it is pulling 4G as it swings around. For the spectators, they can safely stand under the downward swing of the arm. I tell you that it can get quite scary for spectators as well.

On the Sunday, it was a trip to La Batte for the Sunday Market. It was one of the largest market that I have ever been too. It is located on the La Batte on the Meuse River. We heard that parking is hell, so the we walked to it. It was only about 15mins from where we are staying.

There is quite a large variety of things to be bought, for eating, for wearing, for admiring, for listening and for drinking. I love the noise that a market generates. We also saw a monkey in a pram!

The main language spoke in Liege is French, and this is true for the market. We were not confident enough in our French to negotiate prices on some of the items.

The market is big! The market walk stretches for at least 3km!

We bought some lovely ham, local cheese and some local sour dough bread, and had lunch at the after the market visit. It was delicious.

In the afternoon, the drive home was easy and relaxed. We are definitely looking on our next visit to Liege.