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0 pointsNetStrikeForce10y ago0 comments

Hey,

I live in a country with currency A and my parents in a country with currency B. I send them every month the same amount of money from my salary, but they get 20% more than two years ago. Also, I'm saving in currency A to buy property in currency B. A few years ago the difference with the current exchange rates was 40% of what's now... 40% of a few thousand is actually a lot of money for me, so I have to pay attention to the forecasts (should I move my money to currency B before A loses its current power?).

So yeah, it does make a difference for a person with average earnings that doesn't play with Forex.

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2 comments · 2 top-level

kspaans10y ago

You may want to investigate currency hedging if you have obligations in currency B while you earn currency A. If you are only saving to buy later, I recommend settling for "average" rather than playing the fool's game of trying to time the market. Periodically convert A to B (how often depends on what kind of fees you pay to convert and/or transfer: e.g. if there is a fixed cost like a wire transfer fee, try to make that fee take up no more than 1% of your transfer amount). This can loosely be called Dollar Cost Averaging.

insoluble10y ago

> should I move my money to currency B before A loses its current power?

Just like with investing, the more knowledge you have on why the recent changes have occurred, the more prepared you are to predict whether now is the time to "cash out" on the difference. This assumes, of course, that you have solid awareness on the future of those factors driving the recent changes.

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