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Transcription of interview with Jeremy Hess on May 13, 2013.
Douglas Goldstein, CFP�, Financial Planner & Investment Advisor
Jeremy Hess is the marketing and business development manager at IsraTransfer.
Douglas Goldstein, financial planner & investment advisor, interviewed Hess on Arutz Sheva Radio.
Douglas Goldstein: You�re in a business of transferring money and there are so many
different ways that people can move currency from one country to the next. Could you talk
about some of the choices and what are the pros and cons?
Jeremy Hess: In general, you have about three ways to move money from one country to another
and we�re obviously talking about moving money into Israel or out of Israel, that�s
our business as well. The first option is wire transfer and obviously we�re familiar
with this kind of transfer. It�s very reliable. It�s really probably the most secure way
to move your money to transfer your fund and that would be the main pros for wire transfer.
Some of the cons can be that a wire transfer can take a bit of time. Of course if you�re
using a service like ours, it can also be made to be a little faster, but in general,
they�re slower, international wire transfers and obviously the cost that you have upfront
for example the international wire transfer from the bank of origin is usually $40 let�s
say for the United States and then the Israeli side is going to charge you for receiving
the money and they�re going to charge you for converting the money.
The second way you can send the money over is actually with a check. You can actually
write a US check in Israel. You can go ahead and cash that at any local change place. The
pros there really is that�s very simple to use. You have your checks, you just write
one, go ahead and give to them and you get your cash up front. Of course with that ability
to do that it�s going to cost as well. You�re going to have usually a charge to accept the
check and then the price you�re going to get from the money changer is not going to
be as good as you would get from a different type of transfer.
The third way is the simplest probably and it�s basically bringing cash. If you wanted
to bring a suitcase of cash which is probably not the safest thing to do, you can definitely
do that and you can go to your local money changer and changes just like that. Of course
security can be an issue. You worry you might lose the money or something like that so those
are basically the three main methods for transferring money. You have your online methods if you
use Paypal. You can also use Western Union type of transferring as well and of course
those have their own pros and cons as well.
Douglas Goldstein: Let�s talk about the difference between wiring and writing a check.
Let�s say for example you live in Israel and you want to buy a house, you�re not
going to go to your local change place and write them a check for half a million dollars
and walk away with all those shekels. So that then also doesn�t really become an option
for big purchases.
Jeremy Hess: Checks are definitely mostly used these days for smaller payments. A lot
of people on fixed income in the United States were retired. For example, they get their
checks in the US so they get their money into their bank accounts in the US, $2000-$3000
a month from their social security for example and they will simply write that $2000 or $3000
check and give it to their local change place and get the money upfront there.
Douglas Goldstein: Several years ago, the US Social Security set up a system where people
living in Israel could have their social security payments directly deposited in shekels into
their Israeli bank account. Is that a good idea?
Jeremy Hess: It sounds like it would be. I�m not as familiar with that process. It seems
like it�s something that could definitely be a good option if you can. My guess is that
if they�re working with a bank, whatever bank they�re working with, they�ll probably
going to be charging you a little bit more than you would, otherwise, be charged even
if you brought a check into Israel and give it to your local change place. I�m not as
familiar with that but it sounds like a pretty safe option.
Douglas Goldstein: The issue of transferring money by wire as you said sometimes it takes
time, why does it take time? Shouldn�t it all happen at the speed of light?
Jeremy Hess: I would definitely agree with that sentiment. Of course, we want our money
right away and if we�re being honest if you look at from the bank�s perspective,
it really is a touch of a button so as soon as you want to transfer money, the bank can
really just click on their computer and at the receiving bank, they have a notification
that there�s money ready to go. There are certain things in the back end of the bank
that do cause us to take some time. It could be that they�re trying to work on some internal
movements and it could be for their feeling of safety that they�re making sure everything�s
happening properly on there and so they give you a bit of a time frame.
In general through, it really should be instantaneous. Unfortunately, most banks don�t like doing
that and the same thing applies with in terms of the way money move through banks, it can
be a little confusing. Sometimes international transfer will move through an intermediary
bank and so when you have money moving from origin to intermediary to destination. That
also causes a bit of a hiccup in terms of the amount of time it�s going
to take.
Douglas Goldstein: One of the things that I found is I had gone to my bank with a check.
I wrote a check for my US brokerage account and I deposited it and because I was broker
on the account also, I could see in a day or two the money had been debited from the
US brokerage account. I went to the bank and I want to spend it and it was 4-5 weeks to
clear and I say �Wait a second, you�ve already cleared the check. You have the money
and why don�t you credit my account.� Why is that the system works that way?
Jeremy Hess: Check clearing is a really interesting system on its own right. Check clearing really
has to do with the clearing companies. The banks aren�t actually clearing your check.
It�s being cleared through a third party and they have to verify all sorts of [inaudible
00:07:48] to verify the information on the account that�s coming from, match it up
with the account that�s going to and with the amount of checks that they have to deal
with, I still think that a lot of banks probably still have a lot of manual processes in here
that they deal with. People actually have to look at the check and make sure it�s
right and then they do all sorts of background checks as well. On the person who�s doing
it, make sure there�s no funny business going on. Those are certain factors that can
definitely cause the time lapse there.
Douglas Goldstein: You�d mentioned before about intermediary banks, some wires go by
a system that�s called swift and some by the federal funds wiring system. Is there
a difference to the client and to the institutions while there are different models?
Jeremy Hess: It was just a standardization type of thing. Swift transfers, I don�t
remember exactly which organization it was but it�s basically an organization that
has set up the Swift transfer as a model that everyone should hopefully use at some point.
I think they just wanted to standardize that model in order to have banks, everyone�s
fall in line and making it a lot more simpler but it�s hard to say exactly.
Douglas Goldstein: If you found when transfers go through intermediary banks that creates
more problems or is it just a normal transfer?
Jeremy Hess: Actually, I wouldn�t say it creates more problems. It is a normal transfer.
What I would say is that in those cases, the recipient would end up with slightly less
money because the intermediary bank itself also takes a small cut so one thing to be
worry of at least when you�re making your transfers is to see that your originating
bank has a direct relationship with your receiving bank and that they can transfer without using
an intermediary. If they do use an intermediary, there are ways to try and recoup it if you
can but usually it�s something that people have to deal with sometimes.
Douglas Goldstein: You�re in the business of currencies and there�s a lot going on
and you deal mostly in dollars and shekels?
Jeremy Hess: I would say that we deal in varied currencies. We deal with most of the major
currencies and that would be the Pound, the Euro, the US dollar, the Australian dollar,
and Canadian dollar. Douglas Goldstein: The question that people
are always wondering about when they move to Israel is should they move their money
to Israel as well? Is it better to be in shekels or better to be in their home currency where
they originally started from and one of things that people look at is how the currency moves
up and down. As in general, what do you think that indicates about the economy as a whole?
Jeremy Hess: In general in terms of the actual shekel exchange rate or any exchange rate,
that really is a reflection on an economy of that country. For example, we�re talking
about the shekels if you live in Israel. Right now for example the shekel rate being slightly
lower versus other currencies, in general, it really shows that the Israeli economy is
quite healthy. There�s a startup economy in Israel that�s attributed to this. There�s
the gas field for example that we just recently started pumping from the Tamar natural gas
field. On top of that, you have the other economies outside of Israel that are just
kind of deflating so all those are causing the shekel right now for example to be quite
strong. That�s one of the reasons why you may have the Bank of Israel jump in and start
buying loads and loads of US dollars because they need to effectively keep the rate at
a stable enough level to keep everyone happy.
One thing to keep in mind is that exports in general take up about 40% of the GDP of
Israel and that�s quite a big chunk. If the rate of the shekel dollar for example
is really low, those buyers in the US are not going to purchase as much, they may stop
purchasing altogether from Israeli exporters because now they just can�t afford it. Their
dollar is weakened compared to what the shekel is at and if they can�t pay for their goods
anymore, they can�t afford to pay for their goods, they have to cut contract and that
overall could have a negative impact on the Israeli economy.
Douglas Goldstein: How can people follow you and your company?
Jeremy Hess: They can go to www.isratransfer.com. We have a blog there as well, the Shekel Exchange.
If anybody has any questions, they�re welcome to email as at info@isratransfer.com and we�re
also happy to take any call.
Douglas Goldstein, CFP�, is the director of Profile Investment Services and the host
of the Goldstein on Gelt radio show (Monday nights at 7:00 PM on www.israelnationalradio.com.
He is a licensed financial professional both in the U.S. and Israel. Securities offered
through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, NFA, SIFMA. Accounts carried
by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company.
His book Building Wealth in Israel is available in bookstores, on the web, or can be ordered
at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
Disclaimer: This document is a transcription and/or an educational article. While it is
believed to be current and accurate, divergence from the original is to be expected. The original
podcast can be heard at https://sites.google.com/site/goldsteinradioshows/. All information on this website is purely
information and should not be used as the sole basis for making financial decisions.
The opinions rendered herein are those of the guests, and not necessarily those of Douglas
Goldstein, Profile Investment Services, Ltd., or Israel National News. Readers should consult
with a professional financial advisor before making any financial decisions. Please see
the complete disclaimer at https://sites.google.com/site/goldsteinradioshows/.