Having the right information

Kia Ora,

In reponse to one of my blogs a mate put on face book that he would transfer the $50,000 from Aussie to NZ & make $13,000 on the deal.

On the face of it that looks good, but then you have to look at it closer.

To get that $50,000 there I suspect it would of being transferred from NZ, so you loose in the exchange by what is called arbitrage. That is the difference between what the official exchange rate & what entity you put it through is giving.

For example recently the NZ$ was trading at .74, but if you went to the bank on that day you would get .78 one way & probably .70 the other. In other words either way  you loose some money on the transaction.

Therefore if you transfer money across to another country then back you loose each time.

Then there is the issue of all the money being printed means each day that amount becomes less in value.

So then you have to look at where you would get a better return on your money.

Again that is where the education comes in because to most people the best investments look risky, but as Robert Kiyosaki's Rich Dad would say " the most risky thing is lack of education" or words to that effect.

That is financial education not school education.

It doesn't matter what someone tells you, you have to educate yourself.

With each example don't dismiss it or accept it at face value if you really want to have financial literacy then you have to dig further.