Winnepeg

Thought I'd post the same question on the Germany section. Any help out there with an answer to the following situation:

I have a friend who lives in the States. His family has left him quite a nice sum in an inheritance. The money is sitting in Spain. He's offered to take me with him in the next few days to get the money if I can figure this thing out for him.

I need any currency traders out there to help me with the following dilemna.

I have been told by others that it advantageous to exchange the Euros for Canadian dollars and then exchange the Canadian dollars for US Dollars.

Does anyone out there understand it enough to explain to me how something like that works.

Or, is it even better to exchange the Euros for Australian dollars?

Thanks

Keith

There is no Germany section. You just posted a second message to Europe with "Germany" as a search subject.

Keith

Tat

It sound awfully like that
"'I am the former King of Nigeria and I want to share my billion dollars with you if you'll give me your account number'" thing ...

Winnepeg

No Tat, it is definitely legit.

He's a client of a friend of mine and he inherited nearly $400,000 from his grandmothers estate. It's in Euros. He's done well leaving it in Euros. Now that the exchange rate has started to move a bit the other way, it may make good planning sense to consider moving it to Dollars.

JonJon

Frankly, unless you are some sort of financial expert, and obviously you aren't or you wouldn't be asking a question like that on this board, I think the BEST favor you can do for your friend is advise him to consult an attorney or someone familiar with such strategies. I cannot imagine what kind of advice you'd get here from people who cannot decide what to wear in Europe, whether or not to stay in an air conditioned hotel in the middl3e of August in Paris, or who makes the best pizza in Italy.
And by the way, do your friend another favor and buy your OWN ticket to Spain.

Queenie

Wow -
Don't take the advice from anyone on a travel board - see a financial planner specializing in the tax implications of this.

Has your friend been paying US Federal taxes on this sum the whole time? He may need to - and may have a huge bill.

That kind of cash will raise eyebrows. He needs professional advice.

Tat

Why should he buy his own tickets if his friend offering him a trip ?
It is not like his friend worked his butt off for it at McD or so ?
People are so jealous to others fortune, I can't believe it !
If I had money I would be taking all of my friends to Europe every year no problem !

ira

Hi Winnepeg,

What your friend is trying to do is called "arbitrage", wherein you gamble on the relative values of different currencies.

It is not a game for amateurs. Besides, your friend doesn't have enough money to play with.

There was good advice about whether he has been paying his taxes.

travelerone

Taxes are definitely an issue! Also the manner in which it is "sitting in Spain" could complicate taking it out.
Suggest your friend contact a tax accountant as well as get advice from the nearest Spanish Consulate.
I've never heard of any advantage of transferring legitimate funds from Europe thru Canada on to the US.

alan64

With today's current official exchange rates, 1 Euro = 1.63983 CD. 1.63983 CD = $1.24835 US. Converting the 1 Euro straight into dollars = $1.24740, so technically it's possible that the double conversion could be in your benefit. HOWEVER, converting currency isn't free and it's probable that the conversion charges will outweigh the approximately $285-$300 you might be saving.

I agree with those who suggest professional advice, since the conversion question is just one issue. Where to get the best conversion rate w/ lowest fees is important, as well as tax implications.

Patrick

Maybe this is over simplification, but I know of no way you can exchange one currency to another without it "costing" something. So to exchange it twice would have to cost you more than exchanging it once. Wouldn't it??

Winnepeg

Thanks for all the advice and input. As with most everything else, shouldn't worry about shortcuts. Simply a waste of time.

I had simply heard from someone in Europe last year that they were getting more after exchanging by going from Euros to Canadian Dollars and then to American dollars. Didn't understand it then, and now I think that I asked a question that wasted alot of peoples time.

Sorry.

jsmith

I don't know what taxes people are referring to - an inheritance is not taxable tho the estate may have paid a tax.

It should not be necessary to go to Spain for the money. Banks regularly transfer funds. If the estate was settled in Spain the attorney there should be able to arrange it.

I'm sure that if it were possible to exchange euros for Canadian dollars then to US dollars then UBS, Citibank, Barclays, etc whould have been there before you. It's called arbitrage and any such discrepancies are quickly discovered by those paid to do so and acted upon in seconds. No free lunches.

rex

<<It should not be necessary to go to Spain for the money.>>

I totally agree with this. I would see what costs are incurred to re-locate the funds to the United States, and then plan a trip.

Best wishes,

Rex

bob_brown

Given that the Canadian dollar tracks closely with the American dollar with respect to the euro, and that international exchange rates change every second of the trading day, I see no way that double exchange could benefit you.

If you can find a currency pair in which one tends to move inversely to the other, then you might switch, hold in anticipation of movement in your favor, and then switch again. But correlation coefficients do not always predict 100%, particularly when it comes to currency exchange. And where major currencies are concerned, the market is frustratingly efficient in reflecting all collateral movements in value.
Every currency responds to the euro!!

StCirq

Yes, it's possible that you could locate a currency to which you could first convert your euros to, then convert them to dollars, and make a slight profit, but I suspect the research would not be worth the small amount of money you might make on the transactions.
As someone mentioned, every time you do a currency conversion of any kind, you pay for it. Thus, two conversions would cost you more than one conversion.
I don't understand why the recipient of this *windfall* even needs to go to Spain. A wire transfer to his account in the States is all that should be necessary, and that wire transfer will convert the euros to dollars. $400,000 worth of euros will be worth about $508,000 at today's exchange rate. I should think he'd be happy with that. The wire transfer should cost about $15.00.

No need for him, or you, to go to Spain, to deal with this.

Patrick

Why is this sounding like those emails from Nigeria where I can claim half the 25 million dollars if I provide my credit card details and life history?

ira

Hi winnepeg

As of this posting, the exchange rates between the euro, USD and CD work out like this

1000E = 1259 USD exchanged directly

1000E = 1650 CD which = 1258.77 USD

So, if you went the Canadian route you would lose money by paying for 2 exchanges.

Mucky

Wow !!
Easy solution,
Buy a holiday home in spain and spend 6mths a year there...good investment and no exchange !

Well this is a travel forum after all.

Failing that there is plenty of space in my account if you wish to donate.
Muck

Winnepeg

Thanks again for all the info.

It seems like all of these posts were from people that spent alot of time and thought to my situation. I appreciate that.

The sum of money is about $400,000. I am wondering if commissions and transaction costs can be reduced on an amount like $400,000.

Thanks again

Mark