hey everybody Qroo Paul here welcome to the channel in today's video i'm going to
be talking about exchange rates in particular the current exchange rate between the us dollar
and the mexican peso now i know that some folks who are watching this may already be thinking
to themselves where is paul going with this is he going to start telling us about forex
the foreign exchange market and then you know how we can trade currencies like stocks or something
what is he doing here no i won't be talking about that but what i will be talking about is how i
take advantage of favorable exchange rates to make my retirement income go
much further in mexico i'm going to show you how to do the same thing so you'll have
more disposable income to play with okay let's start by looking at the current exchange rate
i'm using xc's site for this i really like their interactive graphs so over here on the right side
that shows the current exchange rate at the time i'm filming this video it's at 21 pesos to one
us dollar as you can see we're on an upward trend this graft is showing the rates for the last year
as you can see historically this is a good rate if you plan on turning dollars into pesos back
in june um on this dip here it was down to 19.54 pesos which was a low for the year that would have
been a terrible time to exchange dollars for pesos now the last time that we saw a high where we're
seeing today was back in march of this year and before that it was back in december of last year
so that's a pretty good rate generally what i look for is anything above this level 20.74 and that's
when i start paying attention to exchange rates now i know that some of the skeptics out there are
already doubting that fluctuations in the exchange rate of only a peso or so
can really benefit anyone financially well let me explain how this works and i'm going to show
you some figures as we go through this so you can see it does make a big difference i'll tell you up
front that this strategy is only useful for people who earn income in a foreign currency in this case
we're focusing only on u.s dollars and who spend money on a regular basis in mexican pesos for
example retirees from the u.s who move to mexico and collect social security or get an annuity or
even digital nomads who live in mexico but earn income say in u.s dollars my first piece of advice
for any of those folks that are in that boat is to keep a bank account back in the states and
keep the majority of your assets there however you also need to have a bank account in mexico you're
going to be transferring money from your u.s bank account to your mexican bank account at key
times okay and this is the money you're going to use to cover your expenses in mexico for you
folks who are on social security or you get some other retirement benefit you know at some certain
time of the month and you get it through direct deposit it's important that you do not have that
direct deposit sent to your mexican bank account that needs to be sent to your u.s account this
way you can control the timing and the amounts of the transfers to get the most pesos for your
dollars well this is where the difference of that peso or two against the dollar can really make an
impact because of the size of the transfers we're talking about for example lynn and i were living
in akumal mexico for several years during that time we had a monthly budget of 3 000 usd okay
to cover everything we wanted to do that covered all of our living expenses reoccurring bills
gasoline for the car everything and any money that we had left over after paying all those essentials
is what we use to you know pay for travel and take staycations and basically just live life
to the fullest for example we would routinely stay at luxurious all-inclusives in the area
and we'd fly around mexico to explore new areas we were living extremely well in mexico
on a budget of three thousand dollars a month now just because that was our budget didn't
mean that we would just plan on transferring around you know three thousand dollars u.s
to our mexican bank account every month as you can see from the history of the exchange rate
that would not be to our advantage to do it that way instead all we did was pay attention and any
time we saw a significant upswing in the rate we would take advantage of those opportunities
to move money from our us account to our mexican bank account so i would make the transfer using an
app from a third-party transfer service called wise it was formerly called transferwise and
i could check the rate on there keep up with it and make transfers easily you know in response to
real-time data i would typically move about a thousand dollars at a time if the rate went
up a little further i'd move another thousand went a little further i'd move another thousand
or so over the course of a particularly high upswing like the one we saw back here in november
i may end up moving as much as ten to fifteen thousand dollars altogether that money would
carry us through the months where the exchange rate was not as good right we've already locked
in those pesos we transfer them they're in our bank account they're not going anywhere
sometimes something huge happens that affects the exchange rate uh for example back when covet
hit the dollar went from 18.56 pesos to a record high of 25.54 pesos to the dollar that means that
almost overnight i was receiving 31 percent more pesos for the same amount of dollars
i actually moved enough money during that time to carry us through the entire rest of the year
i didn't make another transfer that entire year that was an unusual circumstance but
let's look at this under normal conditions okay here's a chart from the end of may of 2022
through today as you can see the rate was not favorable at the end of may and into early june
that was a terrible time to move money uh it hit a yearly low of 19.54 pesos to the dollar
now compare that with what we're seeing today at 21 pesos to the dollar so let's play with some
numbers and see what kind of impact that would actually make as i said the better the rate the
more money i transfer let's say i was planning on making a transfer of six thousand dollars u.s
basically two months of our budget let's look at that same amount being transferred on may 6th and
that same amount being transferred today on july 14th this is just for example purposes so i'm not
factoring in additional transfer fees and things like that those things would reduce the final
amount of pesos i'm just trying to keep it simple to show you what kind of a difference even less
than two pesos can really mean so on may 31st that six thousand dollars would have yielded me 117 240
mexican pesos that does sound like a lot of pesos doesn't today july 14th the same 6 000 would have
yielded 126 000 pesos that's a difference of 8 740 pesos which is roughly the equivalent of about 416
personally i find that to be a significant amount of money i'm not talking about getting 10
off coupon or something i mean that's a lot of money that 8 740 pesos would more than cover my
condo expenses for one month and even part of the next month that means that linda and i would have
more disposable income to spend on fun activities so you see how it works now all right i just want
to talk briefly about how to actually move the money to mexico you can use the international
transfer service through your bank at home or third party service like xc remittly or wise
no matter what you choose they all make money off of transferring your money to mexico even
if they say there are no fees involved that no fee thing is a really popular claim made by banks
but do not be fooled by it they are making money off you and the way they're doing
it is offering you a lower exchange rate and then they're pocketing the difference
the simplest way to know which one's best for you is to look at the bottom line how many pesos are
you gonna get for example i go to transfer five thousand dollars how many pesos am i going to get
with wise how many pesos am i going to get with my bank how many pesos am i going to get with xe
etc that'll help you choose the best service which transfer method you choose to go with
may also depend on the amount you're actually sending some viewers have told me that wise
was the best for transfers under 5k or so but then charles schwab was better for much larger
transfers i just encourage you you know to go out there and do your own research
well folks that's it for today i hope you found the video informative if you did don't forget to
give me a thumbs up just helps me with that whole algorithm thing and until next time hasta luego