Jul
07
How has the GST increase impacted your life?
Filed Under (Personal Finance Management) by Chris How on 07-07-2007
Dear readers,
With effect from the 1st July 2007, the Goods and Services Tax (GST) will be increased from 5% to 7%.
A week has passed since the GST increase and after a week of working life, it became clear to me that my monthly expenses and savings would need to be adjusted due to the increased expenses.
Due to the GST increase, my monthly expenses have increased by a hefty 25%! It appears that the supposedly minute 2% increase is not that minute anymore. After adjustment, my savings have declined. I guess it’s time to make some adjustments to my lifestyle to try to reduce spendings.
So how has the GST increase affected you?
Hi Chris,
Get to your blog through the Gold investing thread @ HWZ. I’m a novice in this area but is interested in buying Gold bullion coins. Just wanna seek advice from you on how come the premium tends to be higher for smaller denominations of coins.
Eg. 1/20 Oz coin bank sell 80.25 and buy @ 49 while 1 Oz coin bank sell 1123.50 and buy 1002.00. Shouldn’t 1 Oz command more premium since it has more Gold content in it?
Hi Jason,
This is my perspective of why a smaller gold coin commands a higher premium than a larger gold coin.
From my understanding, the premium for gold coins consists of a few factors. One of which is manufacturing costs.
Assuming that we use a single machine to process raw gold into gold coins (I’m sure there are more complicated processes behind the scenes). The same machine can generate a variety of gold coins, from 1 Oz to 1/20 Oz coins with the same amount of effort.
As the same amount of effort (cost) is used to create every single coin, costs is divided by the number of coins (and not by weight).
Because a 1/20 Oz coin will cost the same amount of cost to produce as a 1 Oz coin, the total cost to purchase a 1/20 Oz coin would appear higher than a 1 Oz coin.
I hope this answers your question.
Very interesting post - it was new to me. Thanks.