So the last couple of weeks have seen a flurry of discussion in our MBA class Whatsapp group around Brexit, the referendum and currency exchange. Most of us believed the vote would be to remain, so it was quite unexpected to follow the vote counts today and learn that Brexit won the referendum. Naturally the pound has plunged in value, much to the annoyance of some of us who were keen on capitalising on the volatile pound prior to the vote and converted most of our available cash to pounds.
I must say that I'm definitely looking forward to classes and discussions with my fellow classmates if our discussions are anything like those we've been having on Whatsapp around the Brexit!
We've had discussions around the impacts and potential outcomes of the Brexit. Also around what potential negotiations with the EU might look like. Certainly there's much concern over how this will affect us in 2018 when we graduate, and in the shorter term, obtaining those summer internships. The general commentary in the group is that consultancies will be doing well due to the Brexit. After all, businesses will need strategies to cope with the impacts. Guess that would be where most MBA's are going to be headed!
The lawyers in the class assure us that from a legal standpoint though, the Brexit isn't guaranteed yet. There's still the Parliament vote, invoking Article 50, and then final negotiations with the EU. To be honest, although the world and corporates are reacting to the news now, I don't see there being much change in London in the short term. It'll take at least 2 years before anything even happens. In the long term, who knows? The dust would have settled and the markets adjust, and life will carry on BAU. This really good commentary on the Brexit by Alex Edmans, professor at LBS is worth a read.
So my long term plan of moving to work in London post-MBA still remains unchanged. After all, my belief is that if you're determined enough and willing to put in effort, then you'll be able to find a job regardless of market conditions. The LBS brand still remains strong and I'm confident they'll be able to maintain this. Still, the referendum outcome has definitely been a curve ball and we're looking forward to the interesting case studies that Brexit will present.
The silver lining? Our tuition at LBS just got a whole lot cheaper. Time to convert cash!
Showing posts with label currency conversion. Show all posts
Showing posts with label currency conversion. Show all posts
Friday, 24 June 2016
Thursday, 5 May 2016
Saving Money Paying MBA Fees in Foreign Currency
Since the value of the NZ Dollar is much lower than the Pound, foreign currency exchange rates and how to pay MBA tuition fees are obviously of much concern. London Business School's tuition fee of £70,800 translates to a whopping $150,000+. The great thing about LBS (and most MBA programs), is that they allow you to pay in installments.
For anyone interested, LBS's fee schedule for the MBA2018 class looks like this:
For those of us borrowing/earning in foreign currency, you start getting obsessed with currency rate fluctuations in the attempt to find the "optimal" time to make the payments by the deadlines. Other than chronically refreshing the exchange rate calculation button to save on the exchange, the good news is that you can also save by using a foreign exchange transfer service instead of going through normal bank transfer channels.
Do note though that there are 2 kinds of forex services. Both offer you far better exchange rates than the banks. However, the one I'm speaking of here is the one that saves you more money - and hey, when you're about to become/are a poor student, every dollar counts!
So the service I'd like to encourage anyone needed to make currency exchanges, especially in large sums, is one whereby they own bank accounts in several different countries so that the transfer when it happens is not an international transfer, but a local transfer. The way it works is you pay the amount in your local currency to their local account (in most cases this bank to bank transfer should be free). Then they transfer the equivalent amount in the foreign currency from their foreign bank account to the foreign bank so the bank to bank transfer is free too. Where they make their money is either in charging a small fee for the transfer and also in the exchange rates as they put a slight markup on wholesale (clearly not as much as the banks do though).
In this way you save by getting a) better exchange rates and b) no unknown fees for the transfer aside from the commission/fee that the transfer services is charging you. Another benefit is that you know exactly how much you need to pay and how much your recipient is going to get at the other end without having to "guess" how much extra you might need to transfer in case the fee at the recipient end winds up larger than expected. This is especially important when you're paying bills like MBA tuition fees.
After a fair amount of shopping around, I've signed up for accounts with the following two services. Two because it's always good to have one extra for comparison.
1. Transferwise
These guys have one of the best exchange rates and charge a pretty small fee for the exchange. Plus if you sign up using this link, you'll get a free £15 fee credit. They hold the rate they quote you for 24hrs, which means your quote would not be affected by the second-by-second exchange rate fluctuations. This could be positive or negative depending on how the market is moving. You can cancel the transfer within 24 hours after you book it (before you pay them of course) if you see that the market has moved in your favour so that you can re-book with the better rate. The downside is that Transferwise only deals in limited currencies so you might not be able to use them.
2. NZForex
These guys are good for large sum transfers as they don't charge fees for transactions over a certain value (for NZ this is NZD$10,000). Plus they deal in a wider range of currencies than Transferwise. The rate you get fluctuates based on the current market rate so if you get one that you're happy with don't wait too long to book as it might change within minutes. One of the great services they offer as well is an email or text alert when the exchange rate get to a preferred level you set. This way, you won't miss out on opportunities to save due to better rates. If you sign up using this link, you'll get an NZ$50 i-tunes gift voucher when you make your first transfer.
The best way to make the most of it is to get a quote from both services when you plan to make an exchange. Then pick the cheapest :)
For anyone interested, LBS's fee schedule for the MBA2018 class looks like this:
| Year 1 Commitment fee: £2,000 Reservation fee: £6,000 Installment 1: £13,700 Installment 2: £13,700 |
Year 2 Installment 1: £11,800 Installment 2: £11,800 Installment 3: £11,800 |
For those of us borrowing/earning in foreign currency, you start getting obsessed with currency rate fluctuations in the attempt to find the "optimal" time to make the payments by the deadlines. Other than chronically refreshing the exchange rate calculation button to save on the exchange, the good news is that you can also save by using a foreign exchange transfer service instead of going through normal bank transfer channels.
Do note though that there are 2 kinds of forex services. Both offer you far better exchange rates than the banks. However, the one I'm speaking of here is the one that saves you more money - and hey, when you're about to become/are a poor student, every dollar counts!
So the service I'd like to encourage anyone needed to make currency exchanges, especially in large sums, is one whereby they own bank accounts in several different countries so that the transfer when it happens is not an international transfer, but a local transfer. The way it works is you pay the amount in your local currency to their local account (in most cases this bank to bank transfer should be free). Then they transfer the equivalent amount in the foreign currency from their foreign bank account to the foreign bank so the bank to bank transfer is free too. Where they make their money is either in charging a small fee for the transfer and also in the exchange rates as they put a slight markup on wholesale (clearly not as much as the banks do though).
In this way you save by getting a) better exchange rates and b) no unknown fees for the transfer aside from the commission/fee that the transfer services is charging you. Another benefit is that you know exactly how much you need to pay and how much your recipient is going to get at the other end without having to "guess" how much extra you might need to transfer in case the fee at the recipient end winds up larger than expected. This is especially important when you're paying bills like MBA tuition fees.
After a fair amount of shopping around, I've signed up for accounts with the following two services. Two because it's always good to have one extra for comparison.
1. Transferwise
These guys have one of the best exchange rates and charge a pretty small fee for the exchange. Plus if you sign up using this link, you'll get a free £15 fee credit. They hold the rate they quote you for 24hrs, which means your quote would not be affected by the second-by-second exchange rate fluctuations. This could be positive or negative depending on how the market is moving. You can cancel the transfer within 24 hours after you book it (before you pay them of course) if you see that the market has moved in your favour so that you can re-book with the better rate. The downside is that Transferwise only deals in limited currencies so you might not be able to use them.
2. NZForex
These guys are good for large sum transfers as they don't charge fees for transactions over a certain value (for NZ this is NZD$10,000). Plus they deal in a wider range of currencies than Transferwise. The rate you get fluctuates based on the current market rate so if you get one that you're happy with don't wait too long to book as it might change within minutes. One of the great services they offer as well is an email or text alert when the exchange rate get to a preferred level you set. This way, you won't miss out on opportunities to save due to better rates. If you sign up using this link, you'll get an NZ$50 i-tunes gift voucher when you make your first transfer.
The best way to make the most of it is to get a quote from both services when you plan to make an exchange. Then pick the cheapest :)
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