I’m a planner. It’s one of my favorite things to do. Give me a goal, some paper, and a calendar and you’ll find yourself a happy gal. Planning things out gives me peace. It offers a false sense of control, of trust that if you merely take your checklist and move down it methodically, checking off each task as it happens, you will accomplish your goals and live a fulfilling life.

There’s a psychology to it that I cannot deny. I know that it’s up to me and any team members to make things happen, but I still don’t feel like tasks are real unless they are in front of me in black and white, usually encased in a grid of some sort. Moving to Beijing increased that need tenfold, as I require somewhere I can track where I’ve been, the fastest subway stop exit to get there, expenses in two different currencies, four family members’ schedules plus an ayi, and multiple blogs and tasks for beijingkids every week.

With all of this emotional baggage attached, you can imagine the choice of a planner is no small feat. So although I now very comfortably use a bullet journal, trust me when I say I’ve tried nearly every planner marketed to me on both sides of the world. In case you are now a few weeks into your new year and realizing you need more than your typical DayPlanner, (which I’ve also tried many times), then peruse my micro-reviews and find one you want to try!

Bullet Journal

Affectionately called BuJo by those in the know (or who want to feel cool), this is almost a make-you-own-planner template. The system was created by Ryder Carroll, a Brooklyn, New York product designer who discovered he needed a more methodical way to organize himself. It was not just about tracking the what but also the why of each task. In this way, he encourages people to live a more intentional life.

First, off, dispense yourself of the myth that if you use a Bullet Journal, you must be a calligrapher or artist. Although you’ll see the most extravagantly themed and drawn journals, I dropped all those expectations and just use one or two colors plus a highlighter.

The main reason why this is my favorite and more current method is that I can adjust my pages based on the kind of day/week/month I am going to have. When I went on vacation, I didn’t even map out the days; I just used that space to write, draw, and collect memories. Additionally, I don’t need to fit my plans into someone else’s template. If I need more space for plotting out a certain milestone I want to hit, I just take it.

Start here for Bullet Journal methodology and get your own dotted journal at any local bookstore or stationery shop.

Mother’s Journal for Inner Peace

Author and publisher Arielle Haughee knows I love planners and asked me to look at the advanced copy she has specifically for mothers. I’m pretty skeptical of anything marketed to mothers; I don’t need a planner full of grocery lists and recipes and playdates and clothes sizes. This one’s different, though. The minute I opened Haughee’s creation, I started answering all of the questions. The very first page asks who you are (besides a Mom), which is a great way to start. She also gives space for you to say which days and times you will take a moment to fill out her journal, a lovely step that made me consider just how much time I spend on my planner every week.

There are Mommy Mantras and places to write down your stressors for the upcoming week as well as when you’ll take breaks. She also adds her own encouragements along the way, one of the first I’ve found that doesn’t sound condescending.

Although this planner doesn’t work well for me as a scheduler, I will continue to use it to remind myself that yes, I am someone besides a Mom, someone who has her ups and downs, but who also needs space to put her recollections and thoughts on her domestic life in order to be the best mom she can. She also provides a Quarantine Journal for Sanity and Teacher’s Journal for Balance.

Available for order here. 

Passion Planner

Here is where my love of planners turned to obsession. Four years ago, when I started working full time from home while acting as primary caretaker to two children, I was desperate for a way to organize my work and my time so that I didn’t have to force myself to stay awake until 2am to meet deadlines.

Before you begin with any kind of calendar, you break your goals into tasks and time chunks. Each day, you write the “Gamechanger” for that 24 hours; if you do nothing else that day, you will accomplish this task or meet this goal. There are also spots for “Good things that happened” or “Grateful for” today, depending on which planner you receive. My absolute favorite part of this planner is the variety. I used the weekly layouts until schedules got too complicated, both the compact and full-sized versions. Last spring and summer, when nearly every day required all of my strength to move through with grace, I changed to the daily planner. Every day has its own page, and it allowed me to focus on what to do that would enrich my and my family’s life. Whether it was meal planning, work, e-learning, taking a walk, or calling a friend — each day was still a gift and I needed the full page to appreciate it.

Downloads available to try here or find the new app.

Woonscious Planners

Woonscious stands for Women Moon Conscious and was created by Catalina Del Castillo in Shanghai. She’s working towards biodegradable planners by 2022 with pineapple peels for covers, and 100% recycled paper and ring binders. Del Castillo combines planning and doodle books with an understanding of menstrual cycles for both productivity and mental balance. Her website says it can help women in three specific ways:

1. Understand your mental and emotional state of mind.
2. Understand how your physical and mental body can be connected to the moon.
3. Manage time and networks mindfully.

I should say that I am not a very “lunar” kind of person, so I approached her planner with some trepidation. Nevertheless, I used the examples on her website for a few days last week, and it fit quite nicely into what I need for the organizational part of my life while allowing space for reflection and connecting what I eat with my mental and physical well being. The planners come in half-year books, which might be enough time to really see how our bodies and minds are connected. And, bonus — you’re supporting an entrepreneur in China!

Scan QR code below for more information.

KEEP READING: What to Expect in The Year of The Metal Ox

Photos: Unsplash, product websites

With the recent uptick in COVID-19 cases not only in Beijing, but in neighboring Hebei Province, and tighter restrictions concerning the movement of Beijing residents, there is a note of fear passing through Beijing’s parents that schools could potentially be shut down again as a safety precaution, as they did early last year. With such fear and uncertainty in mind, parents and students might be considering how to strategize how to make the best of the rest of the school year. Making education-related New Year’s resolutions could be the key to success for most students. But as Kindall Tyson, M.Ed. LPC, NCC; Licensed Professional Counselor, working as a Senior School Social-Emotional Counselor at Dulwich College Beijing (DCB), explained, it is not quite as cut and dry as blindly setting goals.

So what does it truly take to make winning education-related New Year’s resolutions? And do parents and students even need to make them? Beijingkids spoke to Alessia Chizzoniti, Beijing mom of three to give a parent’s perspective on setting these all-important education-related New Year’s resolutions. For those who know Chizzoniti, she is not one to hold back, so brace yourselves for the unvarnished truth.

Beijingkids: How important is it to set new year’s resolutions?

Alessia Chizzoniti: Absolutely overrated!

BJK: What are the psychological effects and benefits of setting New Year’s resolutions?

AC: Some people need to have a clear target in order to achieve their goals, while others will only accumulate stress. It is only up to you. I personally believe that the end of a year, in general, is a very delicate time of the year; cold, vacations, family time, social pressure, etc. Not the perfect time for the clarity we need when setting resolutions. Also, what if something unexpected comes up along the way – which is not considered in the original plan?

BJK: What are some negative or toxic education-related New Year’s resolutions that both parents and students set?

AC: Improve in this, get better grades is that… Nope. This is not how life works. This is not how we can help our children “improve”. Parents (and educators, I have to say) tend to focus on the performance, on the result. Not on the path.

BJK: How can setting such resolutions affect a student’s mentality and overall educational performance?

AC: If a plant is dying (and this is very common in my house), I move the plant, I question the environment (too much light? Not enough water? The cat is chewing on the leaves?), I bing “how to take care of a lemon tree”. If a child is not “performing”, we stress the child out, we put the blame on him/her but we almost never question the environment, the path, the emotional component. Fewer resolutions, more observation. Education should guide both students and their families, should foster the innate love of learning, should encourage children to discover their talent. It can be reduced to a number.

BJK: What are some useful ways to set attainable education-related New Year’s resolutions?

AC: Talk to your child. Ask your child if there is anything she/he did not enjoy or anything she/he is not feeling comfortable with. Ask your child what would she/he do in order to feel more confident. Set a sort of deadline (this may vary depending on your child’s age) and check on it and with her/him on a regular basis.

BJK: What are some words, phrases, or language that you would advise parents and students to refrain from using when it comes to setting or assessing these goals?

AC: Grade; performance; good job; poor job; better/worse than; lazy; smart… Basically, anything that enhances the sense of performance and competition and any sort of label. Give your child constructive comments, instead.

BJK: What are some tips to help students and parents to set attainable and helpful education-based New Year’s resolutions?

AC: Just connect and talk. Students need to connect to their inner self, understand where they are headed, and do not be afraid to ask for support. Parents should observe more, listen more. I would dare to say, research less. No Bing can help you better than a healthy talk with your child. Children of any age, as young as 6 months (and younger!) can make their feelings very clear to their parents. Connect, talk, and find a viable way to achieve healthy goals.

BJK: Any words of encouragement for Beijing families?

AC: “Success is liking yourself, liking what you do, and liking how you do it” – Maya Angelou.

Photos: Courtesy of Alessia Chizzoniti, Unsplash

Whenever the Christmas season rolls around, I face the same problems: Who should I shop for? When should I start shopping? Where do I find the right spots to shop? How much do I spend, and how many gifts should I buy? This year, I came up with a couple of rules and ideas to save some money and make my gifts memorable when I shop for my friends and family. 

Hand-Craft Something for Friends and Family

 As a teen, it’s hard for me to buy what my friends or family want with the limited amount of money that I have, so crafting or making something always comes to my mind when Christmas time rolls around. As a birthday gift from earlier this year, my friends made a video showing all of their favorite moments of us caught on camera and a compilation of many of my close friends wishing me a happy birthday. That gift was by far the best birthday gift that I have ever received, and I was touched by the amount of thought and effort that went into making that gift. The thrill that comes with unwrapping a gift on Christmas morning is irreplaceable. Still, I think that knowing that a gift, or a video, or anything of the sort that was customized or personalized for them can touch someone’s heart.

 Personalize Gifts

It’s always a priority for me to find something to gift or buy that has some sort of meaning behind it, whether it’s an inside joke or just something that the person I’m giving it to likes or wants. I can’t spend that much money on gift shopping, so to make up for that, I try to put meaning behind everything I buy to give myself a valid reason to spend my money on getting it. This makes shopping a strenuous task, but as long as I have a good idea of what I want to buy for one person, I can find it on Taobao nine times out of ten.

 Buy Ahead of Time, or Plan a Time to Go to the Mall!

As a yearly tradition, my best friend and I will go to the mall before Christmas and help each other brainstorm and get gifts. We will list out all the people we plan to get gifts for and what we’re getting for them during this time, ensuring that the presents we gift don’t clash. To be realistic, we only get one or two people gifts at most at the mall. But the real value in going together is to get ideas for what to get people on our list and go home and shop online. It’s always super fun to do with her each year, and I find that it’s a tradition that gets me in the Christmas mood.

Try New Ways of Gifting During Christmas Instead of the Traditional Gift-Giving 

Because my best friend and I shop together each year, we always agree not to buy each other gifts. It’s hard to keep what we shop for from each other and because we are both people who don’t value physical gifts highly. Instead, we agree to do something that we both want to do. This year, we are going to get our ears pierced together for Christmas! This tradition gives us something to spice up the regular Christmas feeling and just gives me something to look forward to Christmastime even more.

Plan How Much I’m Going to Spend on Each Person

Quite honestly, I don’t successfully budget how much I spend on each person. But for me, I think spending anywhere between RMB 30-100 is reasonable for a friend’s gift. For close friends or family, I usually spend anywhere from RMB 30-200 on a gift. When I’m buying for my family or my group of friends, I consider buying a gift for all of us, like a set of matching socks that we can wear together, or some sort of present that we can all use while spending time together.

Gift shopping is always a challenging task. But I think the key to buying the right gift is still the thought you put into it, whether it’s purchased, hand-crafted, or just something you do together. I’m looking forward to Christmas this year, but in the meantime, I’m going to need to do some last-minute shopping. Hopefully, I’ve learned my lesson and do my shopping earlier next year!

KEEP READING: Brush up on Chinese Gift Giving Faux Pas

There are many different ways to organize your life. Whether we are at school, at work, or at home, we are all in need of excellent self-management skills, and we should use all the tools at our disposal to plan effectively.

The bullet journal is an excellent form of planning. Maybe you have never heard of bullet journaling before; basically, it is a customizable dot-grid journal that can create any plan, from short-term checklists to long-term calendars. Bullet journaling allows us to be as creative as we want, suiting both artistic and minimalist individuals. Below are four different types of bullet journal plans to get you started!

Supplies Needed:

The greatest thing about bullet journaling is that you can journal anytime, anywhere. All you need is a pen and a notebook, and you’re all set! For more artistic styles of bullet journaling, markers or color pencils are optional to add some excitement to the process.

Semester/Yearly Plan

Semester or yearly plans are great as an overview of the future. They can be created in any style, from individual monthly calendars to an overall timeline of the year (shown here). Here are some national holidays you might want to add to your bullet journal for the 2019-2020 school year

Monthly plan

Monthly plans allow you to plan in more depth. Typically, this looks like a calendar with space to write in different events. They are great for putting in deadlines or projects that won’t exceed the month, as well as any important dates you don’t want to forget.

Another way to keep track of your month is through trackers! You can use habit trackers to track your sleep schedule, water consumption, and exercise; finance trackers to track your purchases and monthly budget; and mood trackers to track how you felt during the month.

Weekly Plan

A weekly plan can look like an agenda, where you write out the tasks for each day.

For students, this usually means homework assignments and projects.

The original bullet journal, created by Ryder Carroll, uses dots (“bullets”) to represent tasks, and there are online guides to this excellent system.

He uses different symbols to mark the completeness of each task, such as crosses and arrows.

However, you can create your own system if that better suits your needs.

For example, draw checkboxes to indicate the completeness of each task, or use different shapes for different types of tasks.

Play around with your own bullet journal “key” until you find what works for you.

Daily Plan

Daily plans are reserved for busy days; they are the most detailed and allow you to plan specific chunks of time. For those who would like to journal their thoughts regularly, daily plans are also great for writing reflections, so you can look back on these days and remember the events that occurred.

Digital Planning

Using reminder or to-do apps are great for creating digital checklists. The notifications from these apps will also help to remind you of your deadlines.

A calendar app such as Google Calendar is essentially the digital version of all of the spreads. You can easily view an entire year at once, or block out specific timeslots in each day. Many calendar apps can also be used in combination with to-do apps, such as Google Tasks.

For those looking to use their devices productively or save paper, bullet journaling can also be digital! There are plenty of apps that are typically used for digital note-taking but can easily be used to create a bullet journal as well. Common options include GoodNotes, Notability, OneNote, and Evernote, but just like a traditional bullet journal, the possibilities are endless.

For more information about bullet journaling, there are plenty of helpful online resources such as YouTube, Pinterest, and different social media sites. The beauty of bullet journaling lies in its complete customizability, and no matter your style, you can find resources to inspire you. The ideas in this article are simply a starting point; ultimately, you can make your bullet journal whatever you want it to be.

This article appeared in the beijingkids July-August 2019 Teen Takeover issue

Staying at home with the kids, working full time, or working like I do from home with an occasional visit to the office are easily the biggest and toughest decisions that a couple has to take on. Being a working couple means juggling a number of stress-inducing issues. My husband and I are a typical working couple but to add to the mix we are also both completing masters degrees while caring for our 9-month-old son. It gets busy.

The reality is all kinds of work-life-parenting options are challenging but below are some insights into the financial and emotional factors that need to be considered when choosing whether to stay at home and work or stay at home and look after the kids.

You will need to plan for medical care

Perks associated with corporate full-time employment in our home countries concerning medical insurance and the like may not be accessible at the best of times while working in Beijing, never mind when starting a family and choosing to stay at home. Quitting your job will reflect directly on your medical insurance, particularly if your current job offers insurance for the entire family. So, if you choose to give up your job and stay home, carefully study the impact of medical insurance on the family.

This is as equally as important when working from home. Medical insurance varies from job to job and the type of insurance you have access to may be affected by the number of your contractual hours when working part-time and or whether or not you’re working from the privacy of your home.

Your savings will be impacted

Suddenly turning into a single-income family can affect your savings in a major way. Even with adjustments in lifestyle, savings will take a hit. As a freelancer and business owner, this was ever more true for my family and me. While a lot of it will depend on how big the second income that you are foregoing is, anything earned between RMB 16,000 and RMB 20,000 could impact savings by 40 -50 percent. Consider cutting down on certain amenities to save money.

You will need to cut down your entertainment and holiday budget

Apart from savings, travel, and vacations make a huge dent in any budget. These are luxuries that unfortunately may need to be shifted to the back burner of your priority list. However, a single-income doesn’t mean hibernating at home, doing nothing; there are a number of adjustments that can be made.

– Pay more attention to the fine print on your plastic and take advantage of travel deals and freebies that you and the family can cop from your credit cards.
– Change your travel destinations and/or activities. We, for instance, have chosen cheaper destinations, staycations, and day trips.

Your future plans will see an impact

There may be a shift in your future family decisions if transitioning from a double to single income household or working part-time or full-time at home on a reduced salary. The decisions that may be impacted may include, buying a house to having another baby. Many future goals are dependent on your savings, which usually decrease when starting a family and replenishing your savings may take time.

Evaluate the cost of daycare or nanny versus keeping a second income

When I first contemplated returning to work while being pregnant, it was difficult to quantify being away from my newborn. Fortunately for many expats in Beijing, the prohibitive day costs in many of our home countries, as well as the cost of a nanny, are factors that are not typically problems for families, because of the affordable child-care options here.

An ayi (nanny) typically costs less than half the amount it would to hire someone full-time for care for your child in your home country and can provide flexibility for you to slowly return back to part-time or full-time employment, when the dust has settled and you’ve found the ideal ayi for you and your family.

However, depending on the amount of the second income you may be trying to maintain, it may not be worth hiring a full-time stay-in-helper for your child. These are very personal decisions and dependent on family structures. Think about the incurring expenses once you get pregnant and alternative options such as smaller side jobs that can provide extra income while taking a hiatus from a full-time job.

Photo: Pixabay

Most people learn more about money skills from their parents than from any other source. So, your kids will be learning about money from watching and listening to you. In the first part, we looked at tips for younger children and here are some top tips for older children.

Real World Situations
As your Child gets older, a coin jar or simple games may become less inspiring and they will likely be more stimulated by real world financial situations. Start to bring them to the bank with you and have them understand why you are going there. It is a good idea to start to talk openly about the family finances, not exact salaries, but the cost of holidays, pension savings and things of a general nature. Here are 3 top tips for older children:

1.Open a Savings Account
Going to the bank and making deposits is a great start to learning about saving. Although interest rates are low, the point is to regularly contribute to the account and save for a long-term goal. At most banks, a savings account can be opened for free for a minor. If children under 18 open an account at the bank their parents use, they may get a break on fees. However, some banks require account holders to maintain an average monthly balance or make automatic deposits to avoid fees.

2.Teach Them About Compound Interest
Saving money is a smart way to learn the algebraic lesson of compound interest. Money grows over time in a savings account, for example, and can be a good motivator to save. If you really want your children to see their money grow, have them invest in a mutual fund that should increase in value faster than a savings account. Warn them that mutual funds can drop in value, and go to your broker’s website to show them graphs of how mutual funds you own have done over the years. Remind them that their money is in a long race, not a short one.

3.Let Your Child Make Mistakes
Sometimes the best lesson comes from a poor decision, especially when your child is young and the financial loss won’t be so great.

When my colleagues son got his birthday and Christmas money last year, he rushed out and spent it without thinking. After spending most of it, he realized that he didn’t have enough to get the video game he wanted. He wished he had thought about it first before he spent it. But now, he saves up for the things he really wants and thinks before he spends.

Becoming Financially Independent
Becoming financially independent usually has two interpretations. Firstly, it is your child becoming financially independent from you as parents. Secondly, it is achieving financial independence to the point where you no longer have to work if you do not want to. The latter is an extensive subject so we will just consider the former.

If you think that the “Bank of Mum and Dad” will be closed for business once your child graduates and enters the world of work then think again. As of 2014, 59 percent of parents provide financial support to their adult children who are no longer at work. The “Chadult” generation has emerged over the last 20 years and parents on average now do not expect their children to become financially independent until the age of 38. If you want your child to become independent quicker, then follow these 3 top tips:

1.Set Specific Goals
Goals define what financial independence will look like for each of us. Goals, particularly specific goals written out with timetables, can motivate us to initiate and stick with the other keys to financial independence.

2.Invest
To build financial independence, your child will need to earn a reasonable return on their savings. A savings account alone is not enough. Invest in stocks, bonds, and other assets that involve an acceptable level of risk. Yes, there’s the risk of some loss of principal, but understand that investing is for long term goals that are at least five years away. When they are closer to reaching their goals, shift the invested funds into those lower earning but less risky savings accounts and money markets.

3.Stay Invested!
One of the big mistakes many investors make is waiting to invest until the market is really strong, and then bailing out when it sinks. In short, they buy high and sell low. Get in and stay in, and make adjustments if necessary. Avoid the temptation to dip into long term savings for short term pleasures, your child will thank you in the long run for your guidance!
 

Please note that beijingkids does not necessarily endorse the views presented in this article.

About William Frisby
William originally arrived in Beijing as a finance guy on a bicycle and will probably leave as a finance guy on a bicycle. He works for Premium Finance Group (PFG), a financial consultancy that has been established in China for over ten years. PFG offers clients no-nonsense, personalized advice and serves the whole of China from their Beijing and Shanghai offices. Services include international property, investment, insurance and financial planning. To contact William, email william.frisby@premiumfinance-group.com.

Photo: Socialmoms.com

There are many Australian expatriates who live and work abroad. As with most expatriates, when they leave Australia and become non-resident for tax purposes they open up a world of new investment opportunities, which can present significant benefits.

However, like many expatriates they are likely to return home one day and therefore it is essential to have a flexible financial plan that takes this into account. In recent years, there have been some significant changes to the tax laws in Australia that have a big impact on how expatriates can plan their finances.

A Bit of History...
Until 2010, Australian tax residents with offshore investments were generally required to declare, and pay tax, on these investments on an annual basis. This was covered by the Foreign Investment Fund (FIF) rules. However, in 2010 these rules were repealed and replaced with the Foreign Accumulation Fund (FAF) rules.

The FAF rules dramatically changed the scope of which offshore investments were subject to taxation when an Australian returned home. One of the most important changes introduced is that foreign life insurance policies are now treated the same as domestic life insurance. This means that they are not reportable or taxed on an annual basis.

This opens the door to a powerful financial planning tool for Australian expatriates. Foreign life insurance investments generally have a wider investment choice than their domestic counterparts. This greater choice offers the chance for better growth and better financial planning.

Why Use Life Insurance as an Investment Vehicle?
Outside of the traditional form of life insurance, whereby a policyholder pays a premium to be covered for a large amount of money in the event of their death, there are also various investment platforms offered by life insurance companies.

It is very common to use life insurance as an investment platform because it provides some useful financial planning benefits.

Capital Accumulation – Gross Roll Up

International life insurance products are generally not subject to tax while the investments accumulate in value. This means your savings can grow free of tax, with the exception of certain withholding taxes.

Switching Funds

As your investments grow, you may wish to switch funds to realise gains and invest in new opportunities. Buying and selling funds directly can create a liability to taxation on gains, but by using life assurance products, you should be able to avoid this and make decisions driven by investment performance rather than tax considerations.

International life insurance also offers investors the following advantages:

•    The potential for tax-free withdrawals later in life (more on this below)
•    Benefits can be paid to spouses and next of kin free from taxation
•    A wide investment choice which can include almost any tradable asset in the
world
•    Multiple currency options

“From year 11 onwards any withdrawals taken from the life insurance investment are not subject to any taxation.”

Tax-free Withdrawals from Life Insurance Policies
A day will come when you will want to withdraw money from your investments to supplement your income, during your retirement for instance.

For the first 8 years of a life insurance investment, Australian tax residents can be subject to taxation on withdrawals they make at their marginal rate:

•  AUD  0 – 18,200  = 0%
•  AUD  18,201 – 37,000 = 19%
•  AUD  37,001 – 80,000  = 32.5%
•  AUD  80,001 – 180,000 = 37%
•   AUD 180,001+  = 47%

At this point there is no real benefit to having a life insurance investment over any other kind of investment. However, from year 9 onwards the story becomes more interesting.

In year 9, only two-thirds of the gains are taxable at your marginal rate. In year 10, only one-third of the gain is taxable. Finally, from year 11 onwards any withdrawals taken from the life insurance investment are not subject to any taxation.

There are, of course, careful rules that you must comply with in order to receive this benefit and we suggest you always seek professional help from a financial advisor. You should be aware that it is not possible to add significantly large sums to an existing investment and still avoid a possible tax charge after ten years. Rules exist that are designed to restart the ten-year period from the start of the policy year in which the new investment is made.

Nevertheless, for anyone who has long-term financial planning goals, which we all should have, this is a very powerful way of creating a tax-free income later in life.

How to Calculate the Taxation of Life Insurance
In accordance with Section 26AH (6) ITAA 1936, the owner of an international life insurance policy will be assessed for income tax on chargeable bonuses.

To calculate the amount of bonus assessable for income tax the following formula is used:
Relevant amount (bonus) = (A/B) * [(B+C) – (D+E)]

A = the amount withdrawn from the policy
B = surrender value immediately prior to the withdrawal sum of any
C = earlier amounts paid out
D = total gross premiums before charges paid to the date of withdrawal
E = sum of any previous relevant amounts
(chargeable profits)

An Example…
Initial Investment = AUD 100,000

Surrender Value at time of withdrawal = AUD 150,000

AUD 25,000 Withdrawal in Year 8

Relevant amount = AUD (25,000/150,000)*[(150,000 + 0) – (100,000 + 0)] = 8,333

AUD 25,000 Withdrawal in Year 9

Of the AUD 8,333 calculated above only two-thirds is assessable = AUD 5,555

AUD 25,000 Withdrawal in Year 10

Of the AUD 8,333 calculated above only one-third is assessable = AUD 2,777

Year 11 onwards

Any amount received as bonus will not be assessable for income tax.

As you can see from this simple example, the use of life insurance based investments can offer Australian’s some significant long-term tax benefits. It is therefore, a very worthwhile tool to consider for your financial planning needs such as retirement.

Please note that beijingkids does not necessarily endorse the views presented in this article.

About William Frisby
William originally arrived in Beijing as a finance guy on a bicycle and will probably leave as a finance guy on a bicycle. He works for Premium Finance Group (PFG), a financial consultancy that has been established in China for over ten years. PFG offers clients no-nonsense, personalized advice and serves the whole of China from their Beijing and Shanghai offices. Services include international property, investment, insurance and financial planning. To contact William, email william.frisby@premiumfinance-group.com.

Photo: Simon Cunningham (flickr)

In Part One, we looked at the rules US expatriates have to follow when filing their taxes.  In Part Two, we then looked at the specific process of filing the most common forms which need to be completed.  In the third and final installment of our series, we will take a look at what to do with the dollars you have left over after you have filed.

As we have discussed in the previous posts, the first USD 100,800 of foreign income qualifies for the Foreign Earned Income Exemption (FEIE), subject to you meeting the foreign resident test.  This is a significant deduction and will generally mean that a US expatriate has little or no US Income Tax liability.  Even if you do not qualify for the FEIE, then you most likely still have the ability to claim a tax credit under the tax treaty between the US and China. 

In the US, contributions to qualified retirement plans, such as IRAs and 401Ks, can be made pre-tax and therefore reduce your taxable income.  For some US expatriates there may be no US Income Tax from which to deduct.  Unfortunately, this means that many US expatriates I meet decide to stop making contributions altogether.  It should be obvious to everyone that putting financial planning for your future on hold while you live and work abroad is not a good idea.  Regardless of whether there is any deduction to be made from your taxable income, you will still benefit from making these contributions and should not stop.

US expatriates can still contribute to an IRA up to the annual maximum of USD 5,500, or USD 6,500 if over the age of 50.  Even if they do not receive the income tax deduction, the account still provides tax-free accumulation and has no annual reporting requirement.  Furthermore, US expatriates can establish their own 401K and Defined Benefit plans while they live and work offshore.  This will allow them to contribute up to USD 210,000 on an annual basis and again receive tax-free accumulation, with no annual reporting requirement.

What some people choose to do is to invest in off-shore schemes and insurance plans.  These plans offer no benefits for US taxpayers due to an annual reporting requirement in the US, which can be very complex because these products do not produce IRS compliant documents such as 1099s.  Once they are reported, they will often be subject to higher taxes because they qualify as Passive Foreign Investment Companies (PFICs) and may have Excess Distribution Rules applied to them.  By comparison, all US investment accounts have tax advantages for US citizens and are much easier to report on an annual basis.

To recap:
1.    Do not stop saving just because you lose the ability to save on a pre-tax basis.
2.    Back in the US your tax treatment is better and reporting requirements are easier.

Other than the aforementioned qualified accounts, such as 401Ks and IRAs, what other investment opportunities are available where it is possible to take tax advantages?

Life Insurance – There are many different types of life insurance policy.  Certain policies will allow you to accumulate a cash value that you can redeem later in life.  Any growth achieved inside the policy is tax free and non-reportable.  Furthermore, the better of these investments will allow you to grow your money in market-based products, such as the S&P 500, which deliver equity style returns.  Such plans offer the opportunity of taking tax-free withdrawals, providing an income through your retirement.

Annuities – These are treated as qualified retirement accounts; they carry tax-free accumulation with no annual reporting requirement.  Some policies provide guaranteed returns with no market risk.  This is ideal for the more cautious investor as this type of policy can produce good returns with the guarantee that the balance will never go down in value.  There are annuities of varying quality; this style of investment is complex and would warrant an article in itself.  It is important to get sound, professional advice before choosing this option.

Brokerage accounts – A few select investment providers in the US still have an appetite for overseas business.  Charles Schwab and Pershing Bank are two of the market leaders in offering accounts for expatriates.  These investment platforms can hold qualified accounts inside them, as well as non-qualified, after-tax savings money.  Such accounts allow the client access to a limitless investment range, giving the account holder the ability to buy and hold some of the best investment funds in the market place.

A recent study by Vanguard, one of the largest IRA providers in the US, found that the average account of the IRAs under their management was approximately USD 200,000.  When I plan retirement incomes, I work on being able draw down 5 percent of a retirement fund on an annual basis.  This would provide an annual retirement income of USD 10,000 to the average Vanguard client.

The days of employers and governments supporting individuals through retirement are coming to an end.  We are now on our own and have to make provision to take care of ourselves.  Wherever you work in the world, make sure you are making the most of your after-tax dollars.
Please note that beijingkids does not necessarily endorse the views presented in this article.

About William Frisby

William originally arrived in Beijing as a finance guy on a bicycle and will probably leave as a finance guy on a bicycle. He works for Premium Finance Group (PFG), a financial consultancy that has been established in China for over ten years. PFG offers clients no-nonsense, personalized advice and serves the whole of China from their Beijing and Shanghai offices. Services include international property, investment, insurance and financial planning. To contact William, email william.frisby@premiumfinance-group.com.

Photo: Smart Givers

If one isn’t careful, planning a birthday party can be a bit like a competition to outdo all the other birthday parties that your children has attended. It’s like the expression keeping up with the Joneses. Or maybe we just keep trying to outdo the previous year’s party that we planned. Either way, I couldn’t take another party at Fundazzle and didn’t want to bother with an offsite venue. Why pay so much money for an apartment if we aren’t going to use it? And so, for Reina’s 8th birthday bash, we decided to host a simple affair at home with just a few of her close friends – no more parties with 30+ people please.

The result was easily achieved, took a minimum of preparation, and was enjoyed by the kids. Here’s what we found worked well. For decorations we put up streamers and used a variety of balloons on the floor. We thought about helium balloons, but didn’t have time to get them on the day of the event.

For activities, we had three winners. First, the kids decorated their own cupcakes. This gave them a chance to get creative and instead of just candles on a birthday cake, everyone got to blow out a candle on their own cupcakes. Second, it was a beautiful day, so rather than subject the kids to a bunch of games indoors, we headed out with a soccer ball and a bag of toilet paper rolls. Although I had some game ideas, the kids were quite content to burn off the sugar high by running after the ball. When they wound down a bit, we invited them to form teams and make toilet paper mummies. After the first two kids were “mummified”, everybody wanted to get wrapped.

We thought our party was the anti-planning party; fun, simple, and affordable. Still, I was surprised to hear one of the moms lament that she would have a difficult time planning a party for her daughter now because her child would want something similar. It didn’t matter how simple we made it sound, we had inadvertently become the Joneses.

Photos: Christopher Lay