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To Exchange It All or Not?
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I was asked this question recently from one of my Currency Exchange Planner customers; his name is Robert from California.
Will you exchange all IQD or some and hold and wait if it comes out low?
Now I see 2 sides to this question, I’ll tackle the easy side first, if the value comes out low, for example $1 to 1 Dinar, I would only change a few notes and wait for the value to go higher before changing the bulk of my notes. How much YOU would change would depend upon how many notes you hold?
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Now, let’s say the value comes out to $4 right away, would I still change all? Again, I would still only change a few and wait for the rate to rise higher and then change more. I already have my personal target in mind.
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OK let’s turn this question around, and change the focus from the rate to this: Will you exchange all IQD or some?
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Now, I know myself and my limits and limitations, but the answer to this question would be determined by YOU and how well you trust yourself. I am going to give you a few scenarios and the main purpose of this article is to give you several vantage points for you to consider and think about.
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I have written several articles about the greatest enemy that we will encounter with this currency investment, and that is Sudden Wealth Syndrome, S.W.S. It will eat us up alive and why is that? Because we failed to plan effectively. It has proven itself, time and time again, and the statistics proves that, not me. Statistically speaking 70% of people who receive sudden wealth blow through it within 2 years. That is the statistics.
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And for those who have been reading my articles you’ll remember that I talked about having a Work Free and Worry Free lifestyle. Work free is clear, you’re a multi-millionaire, right? So who needs to work? BUT how can we have a worry free lifestyle if we are constantly worrying about SWS? Does that make sense?
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I covered in my past article, Precious Metals - My Plan B, you can find the article on my website, that one way to provide a worry free lifestyle was to have enough gold and silver as a backup.
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You can find that article and read it again on my website, so I won’t go too much into it here.
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What if, we were to use some of our currency as a backup? But how can we do that, if we already exchanged it all? That’s the thing; if we exchange all of our currency then it is bye, bye baby. She’s all gone, so should we really exchange it all? So let’s address this and carefully think it through. There is so much talk of higher rates and contract rates and that we need to get as much as we can get from the go and there’s nothing really wrong with that thinking. It’s logical. But would it have been worth it, to seek after higher rates and only to then blow it all in 2 years? So it wouldn’t of matter if you received an exchange rate of $4, or $10 or $28, the more you have the faster you might have blown it all away. Only time will tell on that, and your ability to plan.
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Let’s get back on track here, and if you decided to withhold some of your currency to exchange later on, for example, 5 years from now, if required, first we need to understand the demonetization periods of the notes that we hold. Meaning the time frame that these notes can be exchanged before they expire. For the Dinar, we have been told by the previous Governor of the Central Bank of Iraq that the period will be 10 years. So let’s say you exchanged ¾ of your Dinars, leaving ¼ in a safe deposit box or safety deposit box, just in case SWS kicks you in the butt and you lose it all in 3 years. It’s not like you’ll find some guy still selling on eBay for $50 a note, right? So not a problem, you had a safe guard in place, as you have ¼ of your Dinar stashed away in your box but when you go to exchange it, you find out that Iraq lowered the demonetization period to 2 years! So now, you’re S.O.L.!
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Remember, when they Re-Instate their rate, they must officially post it on their website, so knowing the exact demonetization period WILL BE VERY IMPORTANT.
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Now how can we avoid this? It’s very easy actually, by changing the old 25,000 notes to the new Dinar notes and store the new Dinars in your safe deposit box. The new Dinar notes will not have an expiration date on them. So this is the worry free way to go about it. We are worried about the old notes expiring but we wouldn’t need to worry about the new notes, unless of course you left them in the box for 25 years and forgot about them. That’s another story!
So the point to get across here is that you can change some of your old dinars for the new dinars and store those away. Just in case the rainy days comes around.
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And I hear some of you saying, ¼ of my Dinar is a few millions, Muhammad. Just leaving that to sit in my box seems like a waste. I could exchange that and put it in a fixed deposit account and make 5% per year and keep that as part of my worry free backup plan.
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And I would say, well of course you can, but your money may be locked in a fixed deposit for 1 year; if the currency was in the box then you can liquidate it at any time.
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And then you will say, What If I deposit some the IQD in an Iraqi Bank fixed deposit account and leave some in the box. Then it is all still in Dinar, right?
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And I would say, hmmm now you’re thinking. We know that many of the Iraqi banks are opening locations around the USA, Europe and Asia, so we may not need to go to Iraq to open an account. You’ll need to further investigate this option.
So we could play Devil’s Advocate and go on and on until we’re blue in the face and believe me, I have done this with myself many times. It’s actually fun, cause it really gets you to think. And best of all if you used my Currency Exchange Planner, it’ll help you see the numbers in black and white, instead of in your head. Getting the numbers out of your head and onto paper should be your priority. I still have my CEP on promotion price so if you haven’t picked up your copy of it yet, you can save some money on the purchase price right now.
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What I suggest for you, on where to start is, take a blank paper, and write on it, in large print. WORK FREE – WORRY FREE LIFESTYLE. And stick it up somewhere that you’ll see it every day. And that is where your planning will start. If you can truly plan towards a work free and worry free lifestyle then S.W.S. will never find you. There are other things that you can do, it just depends upon your creative mind and how you think things through.
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The idea behind this lifestyle is that you can travel, where ever you want to go and not worry about money, you can invest and lose and not worry about money, and you can even help others and not worry about money. Worrying is not an option for you. To have a TRUE work free – worry free lifestyle will depend upon how much currency you hold now. Do you think you can do that with a few notes? Probably not, but you may be able to achieve one or the other, either work free or worry free, that is possible but it all depends on you and your exchange plan.
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Part of my Work Free plan is to have several bank investments, in low, medium and high risk categories that provide me a stable monthly income. How much I invest and how much you invest would be determined by the amount of currency we each hold. Everyone’s plans will be different, so just work with what you have.
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Part of my Worry Free plan, is to have cash reserves to back up my investment capital and also to have gold and silver to back up my investment reserves. This way, if my Wealth Manager mismanages my high risk trading account, then I am not worried at all as I have reserve funds as needed. Trading can continue but with some changes. Like I said, the ultimate goal of the Worry Free plan is that you can travel and do other things and not have to worry about money. If your Wealth Manager takes a 2 week vacation and there’s no one monitoring your account, etc., we do not need to be concerned about it. We want to be enjoying our lives and not have to be checking charts and watching our account balances go down. We’ll have safety measures in place for that and we just go fishing. The amount of reserves you allocate would depend upon you and to the extent that you want to live worry free.
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If you have no plan then you’re probably going to fall prey to the S.W.S statistics of the 70% will lose their wealth in 2 years? I was also made aware that 85% of the millionaires from the Kuwait raise in value lost their wealth in less than 6 months. That’s even worse! I waited 14 years for this RV/GCR and I don’t want to lose my wealth in 2 years or 6 months! And I don’t want my new wealth to stress and worry me out to my grave. Our new wealth could either be a blessing or a curse and I choose the first.
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So please think carefully on what you want to do and I hope my article brings awareness to you and opens the creative tunnels in your mind towards beating S.W.S. That is the name of the game after all.
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All the best with your planning, and please use my software, the Currency Exchange Planner and the Companion Edition.
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Muhammad Ali
www.CurrencyExchangePlanner.com
The No. 1 Planning Tools for the Dinar community.