I had an idea yesterday for making some easy money, but it sounds so simple that I'm afraid it must be a stupid one. I have bank accounts in the US and Portugal. Last Summer, out of necessity, I had to withdraw money in the US using my portuguese debit card. I was able to withdraw between 500 and 600 dollars per withdrawal, and the fees were 3$ for the american bank and 1.7 euros to the portuguese bank. This was when 1 euro = 1.45 to 1.55 dollars, so it was a pretty sweet deal. Now suppose I do the same in Portugal whenever the dollar is strong and in the US whenever the euro is strong. With the kind of amounts I am allowed to withdraw per withdrawal, I reckon that the fees are basically neglectible and I could be making a lot of money. Am I missing something? By the way, this post has everything to do with coins, because the more money I make, the more coins I buy
Well right now the exchange rate is around 1.28 USD for every 1.00 Euro. I think the problem with your idea is that everyone takes the exchange rate into consideration. Lets say you take out 100 euro and get 128 dollars - 2 in fees so you get 126.00 dollars. So you then go out and buy say a coin for 126 dollars, but you probably only would have had to spend like 98 Euros on the same coin, so it would be like the same thing.
I think I wasn't clear enough. Say you had 1000 euros last July. You withdraw dollars at 1euro = 1.5 dollars and you pay a total of 20 dollars in fees (it would actually be less). You now have 1480 dollars. You wait. Now 1euro = 1.25 dollars. You withdraw euros, and pay again say 20 euros in fees. You now have 1164 euros. You just increased your euros in over 16% in 6 months without doing anything, basically. Also, and before you ask, I have an extra american debit card and someone in Portugal who could do that part for me.
The only issue is, if you switch back ito the Euro right now and the dollar gets even stronger... say $1.20, $1.10, or say parity.... You just lost 20%. Long term, the dollar is in the toiler, and will probly be $2 per euro... short term, the mass fear in the world is causing people to buy the dollar and yen.
You can make alot of money with currency exchange rates, but over a certain ammount, I think you have to have some kind of certification or paperwork or something. Not sure though. Talk to an attorney.
Nope. I didn't lose anything. I had 1000 euros and now have 1164. If the dollar keeps on rising, I'll just withdraw more euros. Eventually the tables turn and I withdraw dollars. The cool part is this: if the tables never turn, I can just spend my dollars in the US and my euros in Portugal. Locally, the prices are not affected by the currency rates.
Now that makes perfect sense. I can see how that could be a problem. I wanna bet, though, that it would be legal with reasonable amounts. I withdrew almost 2000 euros in dollars in a week (like I said, not as an investment, but just coz I needed) and I had no issues.
Your plan works as described. But there are a lot of IF's. I lived overseas for many years and was in the same situation with local and US accounts. It's still a roll of the dice. The trick is getting the world economy to cooperate with you. As they always say: "Buy Low, Sell High" and you'll never lose.
Are you talking about arbitrage or speculation? arbitrage - profitting from a difference in price of the identical commodity in different markets speculation - the act of buying a commodity in anticipation of its increase in price over time In arbitrage the purchase and sale are usually done simultaneously (or very nearly so) to take advantage of the difference in price. In speculation the purchase and sale can be days, weeks, months or years apart.
I guess I'd call it speculation, since it involves waiting for the currency exchange to change sides. I am aware that it can be within a 10 cent difference for large periods of time, but I don't see how that'd make me lose money. Right now, I need to focus on having more dollars and more euros to begin with
My old college roommate works for the IRS. While he often reads cointalk, I'll forward him this link to him. I'm curious to hear his comments regarding your scheme.
It's just currency trading. OP just has hands-on, easy access to two forms of currency. Yes, you could make money speculating on the currencies, but the fact that you're doing it through ATM transactions doesn't give you any advantage that I can see.
I think that most are not understanding what the OP is talking about. This is not Forex trading nor does the IRS need to get more involved than it already is with foreign earned income (that was a funny one). I can understand why he "declined" to comment - there is nothing to comment on. OP apparently has a source of income and a bank account in Portugal and a source of income and a bank account in the US. All he is saying is that as the currency fluctuates, take from the account that is the most advantageous. That's it. No funny business. It's just one of those things that's in front of your nose and you don't realize it. For example, I bet there are a lot of people who pay off their credit cards without taking into consideration the APR. You should be focussing on paying off the higher APR cards first - but does everyone do that? - just an example. Of course, the "scheme" (ha ha) only works well if you don't run out of money in one or the other accounts. One other assumption is that the exchange rate swings back and forth - in other words, the dollar will be strong for awhile, then the Euro, etc. Otherwise, the gains will eventually stop.
