Savings: currency?

[JR8]

Stop trying to take over Europe.

Can you do that?

Please, pretty please?

[JR8]

Nope you can't.


Therein lies the problem.

And it will, until the Germans change, But it never will, as 'the Germans know best' eh? That's why you want to take over the world eh?

[ginger_bread]

I put my S$ in some unit trusts that invest in Europe, in their S$ tranche, currency unhedged.

If Euro gets stronger, so does the portfolio. Of course the opposite scenario could happen as well.

[aster]

Stop trying to take over Europe.

Can you do that?

Please, pretty please?

Think you're addressing this to the wrong person. Did you actually think I was German? Lol...

I take great pleasure in watching German football teams lose in Euro competitions, especially Bayern. If there's one F1 driver whose race I'd like to see end in the pitlane with a faulty car, it's Sebastian Vettell. But when it comes to the economy and running a currency I believe there are no better hands to place your faith in.

I don't see them as "taking over" anyone, but rather towing the continent forward. They're funding a large chunk of the bill, which makes me wonder how a typical German voter can actually accept this...

[JR8]

I put my S$ in some unit trusts that invest in Europe, in their S$ tranche, currency unhedged.
If Euro gets stronger, so does the portfolio. Of course the opposite scenario could happen as well.

The downside with this is that you're paying for the oik fund-managers Porsche, and his offsprings' Eton school fees.

With an hour or two of effort on the investors part, they can sweep said-oik, out of the equation. That, say, 3% a year can make all the difference 20 years of compounding down the line. Would you rather his children went to Eton, or your own?

b) Don't forecast and speculate on outcomes. They don't know, and neither do you. They simply opine, invariably in fond terms, on things they wish to sell you. => Adopt 'Strategic ignorance'. Accept that you don't and can't know. But, invest in what has a proven track record. Example: HSBC would HATE to provide any surprises... they plod along at a 5.2% dividend, year after year. The likes of them, are your true friend, reliable, trusty, lucrative, and the market rewards that later by the Px going gradually up and up. => Decent income, base income also growing, base value also growing.

Don't speculate. Identify solid reliable performers and sit on them long term.

Sure, it gives no drama, no 'sense of activity'. But if you seek that a) invest your future pension in the likes of the above (there are plenty to choose from), b) have a sub-account and stick some play-money in penny-shares (and expect to lose it all, as for sure you will).

Accept that the prize, really does eventually come to the patient, as 'boring' and untold as that might be! It's untold, precisely because there is no money in anyone selling you that simplest no-fee strategy

[v4jr4]

Withdraw S$ cash from bank.
Go to Change Alley/Arcade, convert S$ to home currency
Take money home in cash, deposit in bank
Open (or have) stock-broking account
Buy a portfolio of reliable blue-chips yielding maybe 5+%*
Pretty much forget about it entirely (i.e. low maintenance), except ...
Reinvest all dividends, and after a few years watch it start really growing.
---
Another beauty of this is that SG only taxes on local income. So that portfolio 'back home' could be growing tax free. IF you're from a jurisdiction that taxes worldwide income (e.g. USA), then perhaps open the stock a/c from here in an offshore jurisdiction.


* Current examples (that most people may have heard of):
HSBC, at 5.2%
Royal Dutch Shell 4.8%
Tesco 4.9%
Vodafone 5.2%

I wonder if these practices are "pretty much okay" for Asians, since most of the people I know are planning to keep SGD instead (unless some "disturbances" happen)

[JR8]

I wonder if these practices are "pretty much okay" for Asians, since most of the people I know are planning to keep SGD instead (unless some "disturbances" happen)

No idea what that means?

Unless you mean, 'Indians here like to keep S$ over Rupees. Well fine and well, then just do as described, but within SGn shares. It surely beats earning, what, a local 0.25% in bank account interest, with inflation at 2.5% that has you going backwards at 2+% before you've even got out of bed?

[Brah]

Reviving this thread, not for the discussion on Greece and the EU, which should go to a dedicated thread, but about currency and savings.

JR8 mentions cashing out, exchanging locally, then repatriating it, if I understand his post correctly.

While the best in terms of conversion costs, I don't see that as practical as you have to carry cash overseas, there are limits to the amount, and you actually have to travel back to do it, which means you can't do it regularly.

So what are the best ways to a) not get beat up on conversion costs and b) not get beat up on transfer costs and c) have something regular and automatic, like a Standing Instruction, GIRO, etc.?

[JR8]

...
JR8 mentions cashing out, exchanging locally, then repatriating it, if I understand his post correctly.
While the best in terms of conversion costs, I don't see that as practical as you have to carry cash overseas, there are limits to the amount, and you actually have to travel back to do it, which means you can't do it regularly.
So what are the best ways to a) not get beat up on conversion costs and b) not get beat up on transfer costs and c) have something regular and automatic, like a Standing Instruction, GIRO, etc.?

Morning Brah
Yes, that was what I meant.
I think one has to be careful to define currency import 'limits'. For example in the EU...

-----
'What are the rules?
If you plan to enter or leave the EU with € 10 000 or more in cash (or its equivalent in other currencies) you must declare it to the customs authorities.

Who needs to declare?
Any person entering or leaving the EU with €10 000 or more in cash is required to declare that sum to the competent authorities of the Member State through which he/she is entering or leaving the EU.

What is cash?
Cash is not only currency. There are other items that are considered cash (i.e. bearer negotiable instruments).

How to declare?
If you enter or leave the EU with € 10.000 or more in cash, you must declare it to Customs. You must use the specific EU Cash Declaration Form for each Member State (except France, where you must use a national form).

Why this obligation?
The obligation to declare cash on entering or leaving the EU is part of the EU strategy to combat money laundering and to counter the financing of terrorism. [continues, with further explanatory links etc]
-----
'Cash Controls - European Commission'
http://ec.europa.eu/taxation_customs/cu ... dex_en.htm

So by making you report sizeable sums of money, they are seeking to control illicit funds. What they are not ultimately targeting is larger (beyond the reporting limit) sums of legally-gained funds.

What actually happens is when you arrive in the EU, you go through the Red customs channel, and then tell the officer why you are doing so. You can expect a brief 'shake down':
- How you came by the funds (their original source [work, investments?] etc)
- Why are you carrying them in cash, rather than doing a bank transfer? This actually provoked me explaining how tight the FX spreads are in Singapore, and how if we went outside to the Travelex kiosk we could compare the rates on my SGn receipt, and he'd see that by carrying it on my person, I'd saved a couple of £thousand.
- Then they ask maybe a dozen more questions; a process of triangulation. Why you were working/living in that country? How long for? What did you do there and for whom? Do you have a copy of your business card? What did you earn there? What do you intend to do with the funds within the EU? And so on...

If your funds are 'clean', then I honestly believe there is nothing to be too stressed about. IIRC I have posted about this before, perhaps some years back, and perhaps with more detail that time. After the questions, I was then asked to complete a declaration form, which pretty much repeated exactly what I'd just been asked. It also included things like my SGn and UK addresses. Specific bank account details from both countries. And so on... I'm sure you could Google that form.

Right at the end of the process the officer made some comment like [ominous tone] 'You know I can confiscate these funds, whilst we make further enquiries regarding what you have declared?'. My feeling today is this is to see how you respond. I.e. if you're couriering the funds for some gangland Mr-Big, the threat of having the funds impounded is likely to provoke something of an anxious response! I don't remember my exact reply, but along the lines of 'Well the funds are completely legal, and as I have declared, but if that's what you have to do...? [resigned look]'. And he accepted that, and I was on my way.

--- I don't think at that time I knew about currency declaration limits. I had the funds in a wad in my jacket pocket, and I was going through the Green channel x-ray as I normally would. Clearly, via the scanner they saw what it was, and they pulled me over, and then escorted me to the back-room of the Red channel area. So it's probably fair to say I started that trip's entry clearance on the back-foot, as they perhaps thought I was trying to avoid making a customs declaration.

Anyway, my point in explaining this is to underline that at least in the EU the import 'limit' as commonly perceived, is actually a reporting limit, and in no way should it be considered an absolute limit. I can understand that if your home country has 'currency controls' (i.e. including an absolute limit on personal physical import) then things might well be different.

And clearly the aim of what I describe was (and is, as I would do it again if I were in those same circumstances!) to save cost. So that trip was one I was making anyway, and not one specifically just to bank funds. After all, the cost of the latter would probably negate the point of carrying it in the first place, rather than simply wiring it.

Your closing questions. The trouble is smaller frequent transfers will incur relatively much higher fees. I think you need to weigh up any such likely gross costs of small transfers, vs depositing locally and earning relative peanuts, but then doing as I did when ever you get a trip home. Together with researching whether your home jurisdiction has a reporting limit, or absolute limit, on quantity.

[Brah]

Morning Brah
Yes, that was what I meant.
I think one has to be careful to define currency import 'limits'.
......

Your closing questions. The trouble is smaller frequent transfers will incur relatively much higher fees. I think you need to weigh up any such likely gross costs of small transfers, vs depositing locally and earning relative peanuts, but then doing as I did when ever you get a trip home. Together with researching whether your home jurisdiction has a reporting limit, or absolute limit, on quantity.

Thanks very much for the detailed reply. Clearly I have some things to consider with this.

As I don't travel back often, and as I have holdings in other countries which I might want to bring into Singapore, this gets tricky. And unfortunately for me, this stuff does not come naturally.