Flipping America 583, Currency Exchange

By on May 11th, 2023 in Podcast

podcast 583 Currency Exchange, MoneyCorp, Kelly Cutchin

Kelly Cutchin, with MoneyCorp

As you are out traveling the world, you’ll quickly realize that not only does money make the world go round, the American dollar is not the money a lot of people want. You’ll need to convert to the local currencies. Today I’m going to talk about the best way I’ve seen to do that. 

Kelly Cutchin is a Country Money Manager for Moneycorp, moneycorp.com. She and her company can help you get money moved around and converted in the most efficient and inexpensive way possible. We will hear from her in a few minutes, but first the news!

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Quote of the Day

“It is not the man who has too little, but the man who craves more, that is poor.”

Ancient Roman Philosopher Seneca

Expected Air Date: Mon 1/23/23        

Guest: Kelly Cutchin

Transcript

[0:01] As you are out traveling the world, you’ll quickly realize that not only does money make the world go round, the American dollar is not the money a lot of people want.

You’ll need to convert that to the local currencies. Today I’m going to talk about the best way I’ve seen to do just that.

[0:15] Music.

[0:28] It’s time for Flipping America, the show that teaches you how to make money in real estate. Wherever you are, whatever your situation, there is an opportunity for you.

[0:33] Music.

[0:40] Thank you, Kathy Curtis, and hello America, and hello world. We’re glad you’ve joined us today. Really, I appreciate it so much.

Thank you for making the Flipping America show, one of the largest and fastest growing real estate radio shows and podcasts out there.

I am truly grateful to be your host today and excited to bring you another in our two-part series, it’s become a two-part series, on international investing.

We had the great Roman McMahon the other day, and today Kelly Kutchin is joining us to talk about currency exchange. She’s coming up in just a moment.

Kelly is a country money manager for MoneyCorp at MoneyCorp.com.

She and her company can help you get the money moved around converted in the most efficient and inexpensive way possible.

We’re going to hear from her in just a few minutes, but first we need to do the news.

[1:32] Music.

[1:38] I had a lot of news stories to get to over the last couple of shows and we didn’t have any time for it and we don’t have enough time for it today, but we’ll get to what we can. Surprise surprise, America needs housing. Housing is down.

Finished reading an article a little while ago from one of the many newsletters that I read, but I have an article, it’s in the show notes today, the,

city of Oakland is going to solve the problem. They’re going to build 36,000 houses over the next 10 years.

[2:06] There is so much I’d like to say. The article is a little bit, almost comical, as I find a lot of the articles written by the kids over at yahoo.com, they try to be serious, but I don’t think they have enough life experience to really be taken seriously.

The assumption is that the city of Oakland can do something that for-profit builders can’t seem to find a way to do in California, and that is build an affordable home.

We will see, but I can almost guarantee you the only way it’s going to happen is if the city of Oakland sets aside some of their own rules and a good number of California’s rules,

to be able to build homes that lower income people can afford.

[2:57] The only way that they could do this without doing all of that is to heavily subsidize the cost of these at the expense of the local taxpayers.

And that’s okay. All those rich people in Oakland have plenty of money to go around, right? Oh, wait, we’re on the wrong side of the bay.

Yeah.

Yeah, that’s funny. Hey, I’ve got another article from BizJournals, bizjournals.com. If you need office space, 2023 is going to work out to be a good time for you. There’s a lot of vacant office space.

Now this article focuses on San Francisco, but I am tracking it across the country. My team and I are tracking it.

And there is a lot of office space available around the country. And speaking of office space, Apple is investing $100 million into office expansion.

At their California headquarters? No.

Austin, Texas.

[3:51] Yeah, there’s been some interesting back and forth about the population flight out of California, New York, Illinois, and New Jersey, but I’m not going to get into that here.

Just pointing out where they chose to spend their $100 million in office expansion, not in California, but in Texas.

Home sales are down. This comes as no surprise from Calculated Risk.

Oh yeah, that’s the article, that’s the same guy that I was reading about the housing starts to. But home sales are down and this is something that we expected. We expected

a market correction and it’s happening. It’s not time to panic yet. Don’t worry. It is time to pay attention and be aware of what is happening. Now I know this next story also is going to impact a lot of our listeners. Real estate at $10 million or more list price,

in New York and Florida is just not selling. And I know you want to get out and play the the world’s tiniest violin for the people who are trying to sell something for more than $10 million.

But this is the beginning. The top end is coming off first. Prices will go down as demand goes down.

And that will trickle down to some of the other high-end homes. All right, that’s all the time we have for news today. We’ve got to switch over now, and we’re going to talk to Kelly Kutchin from MoneyCorp, MoneyCorp.com.

[5:15] Kelly Kutchen, welcome to The Flipping America Show. Thank you so much for having me today.

Yep. I know that you’re busy and you’ve taken time out of your schedule to join us. And I am so grateful for that. So excited to have you here because we’ve got to talk a little bit about money. Now, you know, the show is about real estate and real estate investing. But as we’re,

getting into a little bit more of international investing, there’s this whole thing, you know, these other countries don’t all deal in US dollars. In fact, most of them don’t. So that’s where you

come on. All right. I’m going to give you the 30 seconds for the elevator ride and the elevator pitch. You ready? Kelly, what do you do? Tell us what you do. Thank you so much, Roger. So again,

Kelly Kutchin with MoneyCorp. We specialize in currency exchange and international transfers.

So I say all the time that I help people from all over the world buy real estate all over the world, Because like you said, when buying a property in Europe, the UK, Canada, or anywhere outside of the US for that matter, in many of those instances, you’re not going to be able to,

purchase that property in US dollars.

So I want to help make sure that customers are out there getting the best possible rate of exchange.

They’re shopping around, they’re considering the fluctuations on the exchange rate and making sure that they get the most bang for their buck when it comes time to transfer money around the globe.

[6:39] Yep, and that’s moneycorp.com, C-O-R-P, moneycorp.com, if you want to go check it out. But if you’re listening right now in the car on your way to work, don’t go there right now. Do that later on, on your own time, please, not on your boss’s time.

But it’s moneycorp.com, and you can get started right there. And we’ll be saying that website again as we go through the day.

Now, I’m thinking, actually, we are looking at a beachfront property in Belize. I’m one of those guys that, you know, I go and do things and I think, well, I’ll figure things out as I go along.

But this is an instance where it’s pretty good to have things figured out ahead of time because if you’re talking about spending $1.7 million for a house in a different country,

the exchange rates could, well, the difference in what you could save with MoneyCorp could be substantial, right?

[7:35] Absolutely. times the savings that we can encounter for a customer will more than cover things like closing costs or flights and different types of expenses that are going to come out throughout that buying process. So definitely.

Comparing our rates of exchange or shopping around for the best rate of exchange is absolutely going to be a huge cost saving benefit if you take the time to do so. I can comment about buying a property overseas and kind of just talk about some of the ways things have changed over the years.

Yeah, let’s do that. I’ve been with MoneyCorp now for 16 years.

[8:12] And I’ll tell you that during the first 10 years, I think predominantly I was working with clients out of the UK and clients from Canada that were buying second homes or vacation rental properties here in central Florida. So I’m located in Orlando.

I can look out the front window and see Universal in the back window and see Disney. So I’m surrounded by international clients coming into the region here.

But fast forward. Well, let me just tell you, let me just jump in here and tell you this. I’m laughing because I just remembered we stayed in an Airbnb in Orlando years ago when when my son was playing AAU basketball, and it was owned by somebody from the UK.

I was gonna say, I wouldn’t doubt that it’s owned by someone from the UK that probably purchased that property back in the early 2000s or so, when the exchange rate at that moment in time was about two to one.

So one British pound would get you two US dollars. So that $200,000 property only cost them 100,000 pounds.

[9:11] So that’s why we saw. Yeah, we might come back to that, but finish the story that you were starting there. Yeah, of course.

So first decade, we saw those international clients coming in. Over the last three years, though, we’ve really seen the tables turn.

And now we’re seeing a lot of Americans actually consider buying properties abroad and specifically in areas in Europe.

So lots of Americans are doing research right now for buying properties in Paris.

We may have never thought we’d see the day, but yes, France and Paris specifically, and in Portugal.

[9:46] And then Italy and Spain as well, again, in Europe and in the euro zone. And part of the reason, whilst there might be a lot of different reasons someone’s considering buying there,

but part of the reason is certainly because the dollar has strengthened so much against the euro,

over the course of the last several years and even more specifically during COVID, where we saw the US dollar really strengthened because the dollar will remain a safe haven currency.

So the value of the dollar increased, the value of the euro decreased, and it opened up a lot of opportunity for Americans to buy overseas where historically maybe they didn’t think that was going to be an option. Yeah. Okay. Now, when we think about investing in the U.S., the type of,

investing I do is value-add investing. We’re buying something that needs work or it’s distressed in some way or another, and we’re adding value to it so we can turn around and sell it quickly.

But there are other ways to think about this, including just waiting for appreciation to take over. But on the foreign thing, you’ve added a new twist with the currency exchange because.

[10:55] Like you said, the dollar and the euro are about one to one right now. But it hasn’t been that way most of the time that I don’t really track the foreign exchange that much. But most of the time,

since the euro was created, it’s been not quite two to one, but almost, right?

[11:15] It’s been more valuable to the US dollar, certainly, probably closer to around that $1.30 mark. But yeah, just a couple months back, we were actually at parity. And now we’re closer

to about 0.95, right? So one US dollar will get you about 0.95 euros. But in the grand scheme of thing as you mentioned. It’s much closer than it historically has been.

Well, close enough for jazz if you’re going to buy something in Paris.

You got it. All right. Well, the thing I’m thinking though is if that euro value shoots back up to the dollar, and I am definitely, I’m not a foreign exchange currency trader, so I don’t know all of the

factors that contribute to the difference in that, but I do know that if the euro shoots back up in value, well, you could sell, convert that back into dollars, and you’ve just made yourself nice little pile of money with it, but really selling it for the same price you bought it for.

[12:10] That’s correct. So with those British clients, as I mentioned, that purchased back in the early, you know, 2000s and late 1990s, when the rate was two to one and properties were more affordable,

fast forward where the rate for the British pound even, I mean, today it’s at $1.19. Right? So big difference as opposed to 10 years ago. But not only the currency exchange benefit, but also

So those property values have doubled, even tripled in value in some instances.

So now they’re able to sell those properties, get the return on the investment just because of the property value, couple that with the exchange rate.

Hey, these people are in very nice situations as far as their ROI is concerned. So same goes for Americans that are considering buying abroad right now.

Their dollar is going further than before. So they’re getting, you know, they feel comfortable with their investment.

[13:08] But the long forecast does sort of predict that it is likely that the euro will recover. Right?

So you might go enjoy your European property in the south of France or in Paris or in Portugal, Italy, Greece, wherever you may go.

And fast forward a few years after you’ve maybe enjoyed that lifestyle or living experience or vacation for quite some time and you might be ready to switch things up.

And at that point, it’s probable that the euro will have increased in value. The property value is probably going to be the same, if not slightly more than what it is worth today, especially if you do put any investment into that property.

And then of course, selling that European-based asset and converting it back into dollars is going to leave you better off than where you started.

[14:00] Okay, and it’s not just for buying properties. There’s more to unpack about this, but we’ve got to take a quick break and we’ll be right back. Are you looking for the perfect Valentine’s gift for that certain someone?

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[14:49] Okay, we are back. I’m with Kelly Kutchin and she’s with Moneycorp.com, Moneycorp, where They facilitate the exchange of currency for a variety of things.

Now, we’re gonna come back to the topic for just a minute, but I need to throw you a curve ball. I know your son’s playing travel baseball right now, so all you need to know about a curve ball is they’re a little harder to hit than a straight fast ball.

[15:15] I’m not gonna do good either way. Yeah, but you’ll handle this all right. All right, basically we call it the random round table of questions.

And some of these are business related and some of them are personal, but not probing embarrassing personal, just like your own opinion. Okay, here’s first one.

[15:36] I would imagine when you were a little girl thinking about what you wanted to be when you grew up, currency exchange specialist was probably not on your list. What did you want to be when you grew up?

Actually, people ask me all the time how I started working with Money Corp. And I tell them specifically that when I was little, and I was thinking about growing up, I was definitely not,

thinking about being in the foreign exchange industry. So funny that you asked me that question.

I was definitely going to be a prima ballerina. I was going to be a performer. I was going to be on stage. Nowadays, I’m not on stage too often, but I still do enjoy public speaking and giving

presentations and like this being online or on the radio. So I guess in some way it’s performing,

just not what I thought I envisioned my performances would look like when I was a little girl.

Okay, I’m going to just go out on a limb here and bet you a dollar right now that I am the only 6’5″, 270 pound dude you have ever met who also performed in a ballet.

[16:45] That’s probably true. Yeah, that’s a story that I’ll tell you later on if you play your car. Can’t wait.

Yeah. All right. So a ballerina, that’s interesting. All right, next question. If you could have dinner with any person in history, who would it be?

Oh, and history. Yeah.

[17:03] Oh, history. I think I want to have dinner with Elon Musk, but that’s not really history. Well, that answers one of the other questions. One of the other questions asks you what business person you most admire right now. So, Elon can be that. All right, history.

Oh, I’d love to… I don’t know, can we come back to that?

[17:28] Yeah, just interject if you come up with another question. All right. If someone walked into your life right now and said, I want to do what you do, this sounds really fascinating. How could they get started in your business?

[17:41] Oh, you know, that send me an email. Let’s have a conversation because it’s difficult to find people actually that have experience in the foreign exchange industry. So there’s phenomenal,

employees that I have on my team that did not come from any type of financial services background actually. But you know, we have entry level positions, we love training new,

people, we’re excited about what we do. And so we’re passionate to tell people more about how to be involved in foreign currency exchange. So just just start. Even myself 16 years ago,

I started at a very entry level position with MoneyCorp,

having known nothing about currency exchange really.

I was working for an attorney, dealing with a title company, working in real estate transactions, but definitely nothing foreign currency.

My, one of my top performers here in my office actually used to work for Arabian Nights. And prior to joining MoneyCorp, she was back flipping on elephants.

[18:43] But again, she just had a passion for learning more about currency exchanges and now again, she’s one of our top performers. So if it’s something that you’re interested in, take a leap of faith and you never know where you might end up.

Yeah, back flipping on Elephant sounds like it might have the career span of the typical NFL running back, maybe four or five years.

But it’s a great conversation starter and people tend to listen to her once they learn that about her.

All right, you were really talking about there being a real entrepreneurial opportunity for people to jump in, unless you just wanna become a Forex trader, but that’s not what you do.

Okay, so.

[19:26] Let me ask you this, what are the business or economic trends that you’re tracking most closely as a part of your business and career? Sure. I think the important thing is that.

[19:39] The markets and economies are constantly fluctuating, right? And some things are predictable, right? And so we’re definitely going to watch things like unemployment rates and.

[19:49] Different types of economic data that’s released. We know when interest rates are are possibly going to be increased.

We know when presidential elections are going to take place. And we know all of those things that have somewhat of an impact on the exchange rate.

But then there’s all of these unpredictable things. Nobody predicted, to my knowledge, that COVID was going to happen, or at least when it was going to happen.

And that’s obviously a different conversation. But definitely no one determined or predicted the effect that COVID was gonna have on the exchange rate.

Nobody knew that we were all gonna fall in love with working from home and realizing, actually I can do this job while sitting on the beach in the south of France.

And so again, it’s trying to keep our finger on the pulse with all of those things that we know are gonna have an impact on the exchange rate, but then just keeping an eye on things that are happening around the globe,

because all things impact the currency exchange rates.

People ask me all the time, what are the factors that impact the exchange rate? And I tell people, the better question is, what are the things that aren’t gonna impact the exchange rate fluctuations?

[21:06] Because the list of things would be much smaller, in my opinion, than what actually impacts the fluctuations. Well, that was actually one of my questions on the list, not this list, but one of the questions that I was gonna ask you today.

All right, I’m kind of well known from among the people that know me for saying real estate’s one of those things that you can pursue without particular passion or creativity.

You don’t have to be passionate about real estate when you know how to be creative, you can just do what someone else has done.

And so I want, having said that, knowing that I believe that, there’s a lot of talk about pursuing your passion and using creativity.

How do those things fit into what you do?

[21:53] Well, I think someone’s passion could be food, right? But something that could tie into food is going to different places and experiencing different cultures, right? And so again,

it could tie back to real estate and possibly, you know, buying a property or renting a property, or even traveling and visiting different real estate internationally so that you can feed your,

food passion. Another obviously could be arts or architecture. And again, I think that it all has a link back to real estate, no matter what your quote unquote passion might be.

[22:28] So I think that what we’re seeing right now and part of the reason why we’re more than ever seeing Americans express an interest in buying overseas is that it doesn’t seem as unattainable as it was previously.

And I think there’s a few factors involved with that, but a couple of things are just social media and our availability to obtain information at this stage, right? So if I want to go to Italy, and I know nothing about Italy other than I hear that their food and their wine is great, I can find out everything online, I can know where to go, where not to go, where I can bring my kids where I can’t bring my kids, what shows that I should see, you know, where I should stay, what a good price, price to pay for a place to stay would be.

[23:18] And everything basically. In addition to that, so it makes us feel safer, right? Okay, I can get all this information, I feel safer in maybe taking that step that previously I was a bit nervous to maybe consider.

And the second thing is it’s become so common that you probably know someone that’s already done it,

who can just again reassure you that it’s okay or actually maybe before you take that leap of faith and invest yourself, go stay in my Airbnb that I already purchased there,

or come with us on holiday and experience what we’ve experienced to see if it’s the right fit for you.

So I think that just.

Things have changed and the people are coming out of the woodwork expressing interest in doing these things that previously We were intimidated to do but again, we see all of our friends on social media doing it. We hear about it

It’s it’s literally every other show on HGTV nowadays isn’t about you know, just buying here But it’s about the house hunters international buying properties abroad. Why are they putting those shows on TV because it’s relevant,

It’s what people are actively seeking or considering doing themselves.

All right. One last question in the roundtable, then I’ve got to get back to business for a minute and we’re running out of time. So make your answer quick here. How do you define true wealth?

[24:38] True wealth, gosh, happiness, honestly. I think that, you know, if you have all the money in the world and you’re not happy, then how wealthy are you really? Very good. And you have completed today’s roundtable of random questions.

So congratulations, you get a star for the day.

You can tell your kids that you’re in one.

All right, now.

[25:00] So, we’re sitting over in our condo in Malaysia and the rent is due and it turns out it’s only like $1,800, but we have to pay in ringgits.

So how are we going to get ringgits? And our options are we go to the local currency exchange and pay through the nose, or we can go to the bank and pay through the nose, or we could already have an account set up at moneycorp.com.

And then what happens? How does it happen? Step us through the process if you can in 45 seconds.

[25:35] That’s correct. So there’s something known as the interbank rate of exchange, and that’s the exchange rate that big banks are buying and selling currency at, but it’s not the rate that you as a consumer are ever going to obtain.

If you go to a currency desk like you were talking about, they’re probably going to take about 10 to 15 cents off of that rate of exchange and sell it to you at that rate.

If you go to your bank, they’re going to take a margin or a spread of somewhere in the region of three to eight percent.

So they’re going to keep about three to eight cents on every dollar that you transact.

At MoneyCorp, we work off of a less than one percent margin. So we’re going to get you really, really close to the true exchange rate.

So you’re going to get more bang for your buck, really. You’re going to end up with more ringgits using MoneyCorp than you would using your traditional bank or definitely don’t use a currency retail location to do any types of transactions like that.

[26:30] And of course, bear in mind as well that the bank is going to charge you a fee. That’s the transparent fee. That’s what they’re going to tell you about, right, which might be $25, $50, dependent on who you bank with.

But the true money making mechanism is the actual margin that they’re taking on the exchange rate.

So at MoneyCorp, no fees and far better rate of exchange than you’re going to get through some of those more traditional routes. Yeah, and if anybody’s out there wondering, well, how do they make money on the margin? Send me an email and I’ll answer that in a future show,

because we’ve talked about banking and the margins and how they really make.

[27:06] The incredible money that they make. All right. So if you have your MoneyCorp account already set up, when you need money, you just go to the website and log in and do something there?

[27:18] You have two options, actually. We certainly have an online platform meant for people that know what they’re doing and want to do it independently, but the more recommended route is to speak to your dedicated currency exchange dealer. Every person that opens an account with MoneyCorp,

is introduced to their personal currency exchange dealer. They are there to be used at your disposal to ask questions about exchange rates. They can monitor the rate on your behalf because remember,

between now and the time that your monthly rent is due, the exchange rate is going to go up and down. So your dealer can help you to book that exchange rate at the most beneficial rate throughout,

the month so that again, it’s costing you less US dollars. There’s a cost of thing to set up an account? No, it’s free to set up an account with MoneyCorp and we don’t charge any fees along the

way to use our services and make payments. That was my next question. You’re a mind reader. I was going to say, are there any monthly maintenance fees? So it’s free to set up and free to be ready to go. And then when you’re ready to start using it, then you pay the very modest exchange rate difference, the spread, and no additional fee on top of that. Did I get it right?

[28:27] That’s correct. MoneyCorp makes our money on the actual conversion of currency itself at a less than 1% margin, bearing in mind that annually MoneyCorp’s trading over $51 billion in foreign currency. So we certainly are not in a greedy business where we need to take 3%, 4% margins.

We’re doing substantial amounts of trades at tiny margins and staying profitable.

[28:51] Kind of like a grocery store. Depending where you go, but yes. Yes.

All right, she’s Kelly. I’m Roger. Thanks for joining us today, Kelly, and I really appreciate it very much.

My pleasure. Anytime. Thanks for having me.

[29:07] Thank you, Kelly, for joining us today. We appreciate it. And just remember, everyone, the ancient Roman philosopher Seneca said, it’s not the man who has too little, but the man who craves more that is poor.

That’s it for today. You know what I always say, or almost always? Keep your eyes open.

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