Itís Your Money > Money Exchanging

What to do with Stronger Dollar?


Splooge Magoo:
Since I received so much great advice from the forum, here's a little payback for those who have fixed income from the US and convert to peso's on a monthly basis. I don't mean to insult anyone's intelligence, but here are two ways to profit off the stronger dollar.

1. For those that fully convert the monthly income to pesos.

    You should be putting those extra pesos that you will receive aside and purchase assets or something that will last a long time. If you purchase locally produced items you should so that right away (new roof, extension, furniture). If you plan on purchasing something made outside the country, you will need to set aside the money and wait for the exchange rate to drop. If I want to buy a new TV, when the exchange rate goes higher, it will cost more in Pesos, so you do not gain anything. If you wait for the exchange rate to go down, you will have those extra pesos to make the purchase back at the normal price.

2. For those that convert to pesos as needed.

    Since you will need to convert less dollars to receive the same pesos, you will now have extra dollars sitting in your US bank. In this case, I would buy electronics and other long term items from the US.

I believe that the US dollar will be getting stronger over the next year as there are troubles in Europe with the economy, The Fed will have to start letting interest rates rise again and there seems to be some turmoil in China (Hong Kong) and the rest of the world.

If anything, I hoped I got you thinking about your money and planning.

Thanks Dan,  all good points. A raising dollar will allow many of us making ends meet on pensions enjoy life a little more. I have always been of the mind the conversion rate is the rate-- sigh. But if the dollar returned to pre-2007 rates; that would be a whole different picture. Many could do and save a lot more-- well if your getting dollars that is.  By the way, you have any lucky lotto number you want to share?  ;) ;D

Splooge Magoo:

Generally I agree with the rates are the rates and I never used to buy hedge contracts since we were consistently moving company money around. We would win some, lose some and I think come out even in the end. I still will not buy large holdings in pesos until I need it for purchases. But I plan on having fixed income each month and build up pesos when the dollar is stronger. When X balance is reached, I will buy something either labor based or produced locally.

We should always be putting away money from our normal income for currency issues and other emergencies, but I know this is unrealistic. If anything, put the difference in the emergency fund.

A few years ago, our company was acquired and I was under a great deal of stress. It was really bad. I would carry around a $10 scratch off ticket and keep it in my wallet. I represented hope and a way out and I would only use it when it was really bad (after losing, I would get another one). I don't think I ever recovered from those days which got me thinking about early retirement.

I still buy a ticket or two but only when the amount gets insane and then I start figuring out how to split it up with family.


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