Now that you have your visa, wouldn’t it be lovely if you got a cash bonus for migrating; a plan whereby, when you landed in Australia or wherever you are looking to emigrate, your sterling was swapped into Australian dollars and you got a 5 or 10% tip just for making the move? Well that is perfectly possible.
It isn’t a matter of someone throwing cash at you. You do need to take some steps to gain your extra money but those steps are relatively simple. In the next 700 words, I will give you some really straightforward tips on how you can grow your bank balance while you plan your migration.
In essence, the best migration plan for you will come down to two things: timing and technique.
So who will you buy your Australian Dollars from? A high street bank or bureau de change will be expensive.
If you don’t believe me, just compare the ‘We buy’ and ‘We sell’ rates to any specialist currency broker; you may be shocked. The difference can be 10 or 12%, which means they are making 5 or 6% profit margin in comparison with the interbank central market exchange rate, no matter whether you are buying or selling.
This is where the real savings can be made. In an average month, the Sterling – Australian Dollar exchange rate will fluctuate by roughly 4.5%.
In the first 6 months of 2016, we saw a high of AUD$2.08 and a low of A$1.81. That represents a potential saving of AUD$27,000 for every £100,000 converted, as long as you have the means to capture the best of the market movement.
Capturing that spike in the exchange rate is far easier if you have access to relevant and timely market information. ‘Relevant’ because, when you are trying to emigrate, no-one has the time to trawl through millions of articles to find the news that relates to your transactions. ‘Timely’ because, even in this era of instant access, most news is historical. Being informed of beneficial market events while they are happening and while the exchange rate is attractive, will give you an advantage in capturing the best of the market.
However, what happens if that fantastic exchange rate is available in the middle of the night? The currency market is active around the clock and around the globe for 6 ½ days a week. That’s 156 hours of continuous trading in each week. When most high street banks only open their doors for 40 hours a week, there is a huge time void in which the exchange rate you want can come and go in the blink of an eye and you will miss it. That is unless you have the ability to capture it automatically.
Even traders who are within the market throughout the trading day use automated orders to ensure they do not miss out and are not susceptible to unexpected negative exchange rate movements (risk in other words). Orders placed with market makers that trigger automatically if the targeted exchange rate is available, are an essential tool for those trying to get the best of an exchange rate like the Australian dollar, which is most active through the night time in their part of the world.
Once the exchange rate suits you, whether you have an order triggered or book a live market rate, you will need to arrange to exchange your funds with your broker. Most currency brokers will allow you up to 5 working days for what are known as ‘Spot Contracts’. That means we could book an exchange rate with you on a Monday (for example) and agree that we exchange your sterling for the purchased Australian dollars on the following Friday. This allows for online banking and dealing with transfer matters and moving your funds between accounts to suit.
But if the exchange rate is fantastic before you are ready to exchange your funds, you can still take advantage of the good value the market is offering. Most brokers offer forward contract and gives you the ability to achieve the best exchange rate so much easier when you are in the midst of planning your migration. The timing involved in selling your home, liquidating assets, consolidating your pension funds, disposing of the car and any furniture you are not planning to take with you means your funds are unlikely to be available in one lump sum. So it makes things simpler and less stressful if you can grab an excellent exchange rate even if it is available before your funds are liquid. That allows you to budget and plan with certainty over the amount of funds you will receive on the other side of the transfer every time.
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