The Hidden Costs of Currency

On my recent flight to Manchester I saw the airport trolley sign priced at 1 pound or 2 euros. With the current exchange rate hovering around 1 GBP to 1.15 euros, it got me thinking — how often do we expats overlook the little things related to currency?

The Underestimated Power of Exchange Rates

It’s not just about the price of a stupid airport trolley. Think about your daily expenses, your online shopping, your investments, or even your pension. We often fixate on returns, fees, and the obvious costs. But lurking beneath is the silent game-changer: exchange rates.

Take banks and credit card companies, for instance. They can often charge hefty fees for international transactions, and the exchange rates they offer might not be the most favorable. You might think you got a great deal on that online purchase, but add in transaction fees and a poor exchange rate, and suddenly, it’s not so rosy.

Investments? Don’t Forget Currency Impact

When thinking about investments or pensions, especially those in different currencies, it’s easy to get lost in the potential returns and forget about the currency impact. Say you’ve invested internationally, and it offers a return of 10%. Fantastic, right? But what if the currency it’s based in devalues by 15% against your home currency? Suddenly, that promising return doesn’t look so promising.

The Volatility of Currencies

Having lived in Dubai for 20 years plus, as a well known and experienced financial adviser, I’ve seen currencies movements can be swift and significant. A slight shift in the GBP to dollar rate can mean a difference of hundreds, if not thousands, when you’re transferring large sums or dealing with investments. This applies to the many a different currency parings expats have.

Lean on Expertise

With currencies, staying updated is key, so having a seasoned financial adviser in your corner can be invaluable. They can guide you through the jargon, help you spot hidden fees, and ensure your money gets the respect it deserves.

In a Nutshell

That airport trolley got me thinking, and I hope it gets you thinking too.

Whether you’re an expat, a traveler, or someone with cross-border financial interests, remember to look beyond the obvious. Exchange rates might seem like background noise, but they can play a lead role in your financial story.

Life’s a journey, filled with financial twists and turns. If you ever need a guide, especially in the maze of exchange rates and finances, give me a shout.

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Association of Professional Sales (F.APS), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.

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Blog published by Mike Coady.