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Ways to minimize currency conversion costs

Posted by John T. Reed on

I advocate putting enough money to live on for 24 months into foreign currencies that are held abroad. Most mine are in foreign saving accounts denominated in the currencies of Canada, Australia, and New Zealand. I have a lesser amount in gold and foreign currencies (CHF, DKK, SEK) in cash in a safe deposit box in Canada. I would prefer savings accounts, but those countries have little or no inflation or even deflation and they make it near impossible for an American to have a bank account there.

Anyway, if you follow my advice to do that—and the Venezuelans and Iranians wish they had—you need to be concerned about the conversion rate you get when you convert USD to AUD or whatever as you make the wire transfers needed to fund the accounts or buy the cash.

The 8/6/18 Wall Street Journal had an article on the subject that told me useful things I did not know. I thought banks gave you the best conversion rate. They are better than the money changers at the mall or airport, but not the best.

The best would be companies like WorldFirst U.K. Ltd and OFX Group. The article also recommended the FXcompared.com web site. I will explore those in more detail next time I convert USD to one of my hyperinflation hedge currencies. 

Appreciate hearing from readers with experience with these or similar exchangers.

You can probably read the Journal article if you google its title: “The Black Hole That Opens With Currency Conversions.” That title is a bit much. The title on this post is more accurate and less hair-on-fire.

You can read about why you should follow this advice in my book How to Protect Your Life Savings from Hyperinflation & Depression, 2nd edition

 


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