Dealing With Currency Risk And Exchange When Moving Abroad
Our move to Spain is now a mere seven months away. I expect that we’ll book our one-way plane tickets and temporary accommodations this month. Next month at the latest.
Once that happens, I’ll start covering every single logistical and emotional aspect of preparing for the move. Then, as of January 2025, it’s all about life in Spain. Every single detail of our day to day.
Things are not good in Los Angeles right now. I wrote about it on Medium this morning. Between that—and the sense that Trump is going to win in November—I’m more eager than ever to leave for a place where the emphasis is on quality of life.
Honestly, the degraded quality of life here has had me down of late. In fact, it has made me anxious and moody. So I aim to keep things positive, if not practical, now and going forward.
This doesn’t mean we’ll no longer address problems in the US as the door hits me in my ass on the way out. Or the issues that are sure to come up in Spain. It’s only to say we know the problems associated with retirement and quality of life and all that they entail. It feels a lot better to acknowledge them, then promptly focus on solutions.
To that end—
As of Sunday night, if something costs 100 euros, you’ll need to put up about 108 dollars to cover it. Therefore, if we manage to secure an apartment that rents for 1,400 euros, we’ll be paying roughly 1,509 dollars. A 40 euro grocery store run equals 43 dollars. And so on.
When you run the math, it’s still a better deal no matter the currency you’re paying with.
All of this said—
I’d love to hear some thoughts from those of you who have experience with or are otherwise knowledgeable with regards to currency issues.
comes to mind as a person who can likely write a book on the subject.In all of my reading, two things come up almost across the board—
Never let currency fears stop you from moving abroad.
Invest in assets that can make up for, in this case, a weak dollar, relative to the currency in the place where you're moving.
Right on with the first point. As for the second, I don’t think I’ll be going there.
My situation is like this.
I use a Wise account.
I have yet to convert any USD to euros.
Nobody can predict the future so when is it ever a good time? Though most long-term forecasts portend a weaker dollar. Apparently, the dollar has stayed stronger—for longer—than most people expected.
I will likely be able to get paid—if I choose—in euros for three of my four current sources of income. My inclination is to get paid in euros as much as possible. I’ll need to pay quite a few things—namely our biggest expenses (rent, Social Security and taxes)—from a Spanish bank account. Plus, we’ll be in Europe, so I kind of want to deal with euros rather than dollars.
So I’m down to hear some thoughts, ideas, strategies.
The funniest thing happened on Sunday.
There was a car accident in my neighborhood.
As I walked up on it, I assumed the driverless car was involved or even to blame. Turns out it was neither.
After chilling there for about 30 seconds, the car cautiously backed up, went around the wreck and headed off on its merry way.
An endorsement for driverless cars!? On the count of much less, if any, human error.
I'm sure feeling you on that degraded quality of life. I just need to figure out how to sell my kids on moving abroad. Hopefully our November trip to Madrid, Barcelona, and Valencia will show them that it's worth considering.
I think never letting currency fears stop you from moving abroad is the right way to think about it.
My filipina wife and I have invested and moved quite a lot of money to and from (well mostly to) the Philippines over the past few years. We do occasionally think about currency risk, and we do look for income opportunities in local currency, and we don't worry much at all about the minor fluctuations.
I also use Wise for both Phillipines and Euro transfers. I also tend to preload 1-2 months of planned expenses in the Wise interest account. That tends to avoid unexpected delays in transfers which I have run into at the most inconvenient times. I have hit unexpected delays and additional verification processes with pretty much all of the remittance services that I have tried at one time or other. I definitely sleep a lot better now when I stage up planned movements ahead of time and avoid having to make last minute moves.
That said the last few times that I sent USD-EUR were seamless and almost instantaneous.
Can you share a little (a few specifics) about what isn't good in Los Angeles right now? I'm monitoring different cities all over the country to understand the difference between what's being reported in the media and what's really happening with those who on the ground. For you to say things aren't great, that means something to me personally, because I trust you to tell the truth.
With this election day coming in less than 150 days I believe the stuff will hit the fan no matter who is voted in. Another reason I'm eager to keep moving forward with relocating out of the country. (Carl is now asking questions for different locations, it's getting real, not as real as yours, but still marked improvement on my end. Finally.