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12 February 2016

Why Did I Bring Cash in US Dollar and Not Canadian?

I need to post this subject as it's one of the most important topics for us, new immigrants.

Here's an email sent to me by Ms. S.B.:
"You mentioned in your previous post that you brought cash. Is it in USD or in CAD$? We tried to check with BPI and HSBC but the rate is higher (~php 1 peso)compared to money changer. The only problem with the money changer is that they do not have CAD$ available on hand...

Can you share your experience on this topic? Thanks."
First of all, be careful in exchanging your currency.  If you are not going to a bank, go to a trusted money changer.   Yes, it's true that small-scale money changers have higher exchange rates but the risk is higher.

Anyway, once you find a good money changer, go ahead a compare their rates with the bank.  It's quite difficult though because rates change everyday.  You have to be at two to three banks and money changers in a day. If you have someone that can send you a message regarding the rates, that would be good.

The Exhange Rate?
On 2014, before we packed up for Canada, C$1.00 (Canadian Dollar) has an equivalent of US$0.90 (US Dollar) .  Philippine Peso (PHP) to Canadian Dollar (C$) was also high on that month.

PHP42.00 = C$1.00
PHP45.00 = US$1.00

For a family of 4, I need to have a Proof of Fund that can satisfy the Canadian Officers more than the amount of C$20, 654.  At that time, I need to have the money worth PHP867, 468.   It is also worth US$19,277.06.

I changed my Philippine and Singapore currency to US$22,000++ and brought it to Canada in Cash.

Why I Brought it in Cash Instead of Draft/Cheque?
I brought cash money in US$ and each in US$100.00 denomination. It can fit in a sling bag with a size of 2" thick x 4" width x 5 width.  I like the idea of the sling because it can be strapped like a necklace.

The sling bag was strapped around me for the whole trip.  If you want to get my money, Kill Me First, LOL!  I gave half of it to my wife to lower the risk of loosing everything.  She placed it in her handbag.

It's simple logic, cash is liquid, you can use it anytime.  Compared to cash, bank draft and cheques need more time to liquidate.  Bank drafts are designed for the risk involved during the travel.  Well, you don't count your dollars in public or speak about it during the travel.  If you can minimize the risk, then cash is really the answer.


You need most of the money upon arrival because you need to pay for the house rent, usually has 1 month downpayment and 1 month deposit.  And not only that, there are other expenses like groceries, opening a phone account, housewares, clothings, etc...

The next time you peep in your sling bag, the money will be half thinner.

US and Not Canadian Dollar?
You need a stable currency.  In fact, I'm still holding my settlement funds in US dollar today and use my salary, in Canadian dollars, for my expenses.

For me, US Dollar is so far the most stable currency in the world and is widely accepted.  Most of the airport money changers accepts US Dollar.  If ever we'll be stranded in an airport along our way to Canada, I still can use the currency.

My Decision Was Right!
If I bought Canadian Dollars for my settlement funds that time, it's now worth only PHP702,236 today.  I should have lost PHP165,232 (C$4,859) because of today's exchange rate of PHP34.00 = C$1.00.

Since my money is in US Dollars, I can now buy more Canadian Dollars for my TFSA.


Recommendation
Immigrants who are bound to Canada this year can enjoy the benefit of the low exchange rate.  I suggest that you buy Canadian Dollars instead of the US currency.  Here's why...

For a family of 4, you need a minimum settlement fund of C$22,603 and that is only PHP768,502. Compared to our settlement fund, that was PHP867, 468 (C$20, 654).

Given that the Canadian Dollar will rise soon as the market booms and reaches near the value of US Dollar, you'll be richer.

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Ben Alagnam - MeMovingToCanada