Author Topic: What Should I Do With My RMB?  (Read 2316 times)

fecklesslayabout

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What Should I Do With My RMB?
« on: March 18, 2012, 09:17:02 AM »
I'm a 23 year old American who lives and works in China. Though my salary is low by U.S. standards (I think it breaks down to considerably less than federal minimum wage), it's enough to live pretty fancy-pantsily where I live, and with even minimal frugality I can save a pretty large chunk of it (something like 70% of my income, even after having paid for trips to the U.S. and Japan). By the time my current contract ends in September I should have more than 80,000 RMB saved up. At the current exchange rate, that's about 13,000 USD (I know that that's chump change for you more advanced Mustachians, but I think it's pretty decent for a 24 year old with a liberal arts degree!). My question is, what should I do with my RMB? I've been putting money into this CD-esque thing (I only know what it's officially called in Chinese: they call it a fixed-period savings account) that makes about 5.5% in interest a year, but is that a bad choice? Should I even be keeping this money in RMB? I personally feel like it's probably going to be a while before the RMB stops gaining on the dollar, which would make it pretty dumb of me to buy USD right now, but I could certainly be totally off-base here. Most personal finance advice online assumes that you are living and working in the U.S., so I'm nervous about making the wrong choices.  Senior mustachians, what would you do with a wee little Charlie-Chaplin sized 'stache of Chinese money? Would you buy American stocks? Chinese stocks? about half of a square foot of Shanghai real estate? Or am I doing just fine with my Chinese CDs?

sol

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Re: What Should I Do With My RMB?
« Reply #1 on: March 18, 2012, 06:10:38 PM »
You're dipping into currency trading at an early age, by necessity.  I would do some serious research before making and decisions with your hard-earned stash.   Serious off-line research, with real sources that have page numbers.  There are whole forums devoted solely to currency exchanges, so unless we have some local experts here I'm not sure this is the best place to ask.
« Last Edit: March 18, 2012, 07:25:27 PM by sol »

mustachian.acolyte

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Re: What Should I Do With My RMB?
« Reply #2 on: March 18, 2012, 06:55:13 PM »
I'm no expert but if I were in your position, and I had to make a bet one way or the other, I'd bet that the RMB will continue to appreciate against the dollar. Look up graphs of the exchange rate and you'll see it almost always staying flat or appreciating. China has had an explicit policy to keep the RMB weak, and they've been relaxing that over time. If you're not in any rush to buy dollars I'd say to stay put holding RMB. You should be reasonably confident that the appreciation trend will continue for a few years.

fecklesslayabout

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Re: What Should I Do With My RMB?
« Reply #3 on: March 20, 2012, 05:03:12 PM »
So I guess the take-home lesson here is that I should just keep it where it is for now, and try to pick up some books on currency trading so I don't do anything stupid in the future. Thanks, sol and mustachian.acolyte.