Smart money tips for the avid—and not so avid—traveler

Travel is a luxury that everyone can have access to. Proper budgeting, smart destination choices, and patience are what visitors need to explore foreign places in the best possible ways they could. Of course, time is a serious factor to consider, especially that most people are full-time employees and seldom have absolute control of their vacation schedule. This also translates to the need for smarter use of money. Because vacays are ‘rare’ for the busy employee, he must ensure that every cent he spends is worth it.

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Foreign currencies

Not all destinations make widespread use of credit cards; in fact, many only accept cash. Therefore, it is oftentimes necessary to bring some physical money to pay for services such as a subway ride or products like sidewalk snacks. This also means that one will have to go to a foreign exchange company to have some of his money converted into the currency of the country he plans to visit. The amount of foreign currency he will get will depend on the exchange rate being offered by the converter. Getting the best deal does not end there. Some companies have high commission charges, while others do not charge such fee but offer not-so-competitive rates. Most crucial of all, it’s best to monitor the market and strike while the iron is hot. Exchange rates constantly change and nobody wants to miss out on opportunities. It’s also wise to check if banks offer preferential rates for their own customers.

 

Credit cards

Credit cards, as is always suggested, must be used with utmost caution. The convenience that cashless transactions offer often dangerously translate to heavy—and often unnecessary—spending. In short, how one can make meaningful use of his card will depend entirely on his discipline. As for traveling, it would be best to use credit cards that were specifically designed for overseas use. Such cards, as compared to everyday credit cards, offer smaller charges (foreign exchange fees, ATM withdrawal fees, etc.) and can be accepted in more shops, restaurants, or hotels.

 

Traveler’s checks

Although they are no longer as popular as they used to, traveler’s checks can still offer some great advantages for vacationers. They are very secure to use and can be replaced easily when they get lost.  However, they do come with a high cost, especially when factoring in commissions and some flat fees. Traveler’s checks, therefore, are best used when dealing with larger amounts.

 

Prepaid cards

Prepaid cards (pre-loaded bank cards) have the security feature of a credit card as well as the ‘controlled spending’ advantage of cash. They are ideal for the budget traveler as they often do not come with some commissions, annual fees, or late charges (except for application fees, of course)—helping them stay on budget while enhancing protection from theft or loss.

 

Of course, regardless of which payment option one uses, everything would still boil down to his financial health. It is not practical to spend a lot on travel if it will cause an imbalance in one’s budget. Traveling can certainly offer plenty of self-improvement, cultural, and social opportunities but it must not be done at the expense of one’s credit rating, educational fund, retirement nest egg, and overall financial well-being. When the vacay is still several months (or years) away, it would be best to build the travel money using income-generating instruments such as mutual funds, treasury bonds, or a personalized investment portfolio. Never act on impulse when there are airfare promos, too!

What will a Trump Presidency mean for global financial markets ?

The markets where brieflly shaken on historic Trump election by quickly recovered and rallied to new highs on the opening of the US markets. Republican control of the House and Senate has ended of political gridlock a chance at a balanced growth policy.

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Discounting some of Trumps more populist comments, like building a wall (albeit if Mexico pays!) His potentail business and tax changes could ignite growth not seen in decades.  We might be in for a heady growth period we have not seen since President Reagan ignited America’s inner business spirt in the 1980s.  Reagan was castigated in a very similart way by washington and media elites.

What might we see:

Massive Infastructure bill to upgrade America roads, air, rail and energy highways – attached to this bill will be incentive for US companies that hold an estimated $2.4 Trillion offshore to reprataite funds at an attractive tax rate (10-15%).  This alone could raise $300 billion dollars to fund infrastructure projects.

We could see long term tax relief for US companies to bring corporate tax rate in line with rest of the developed world; at 35% it stands as one of highest.  A Twenty percent rate would spur investment, R&D and profits.

Roll back of over regulatory aspects in banking (Dodd Frank) to allow smaller bank to expand lending,  Healthcare (under Obamacare) may benefit.  Energy industry could benefit from a lighter regulations and renegotiation of the Iran oil deal, which would help stablize prices.

The defense industry could also benefit as Trump and the Republican party are historically pro-defense. Trump has said he would see other countries pay more for defending their borders rather than living free under America’s defense umbrella. Stocks such as Lockheed Martin and General Dynamics will benefit.

With government fiscal policy in full swing you would see less reliance on monetary policy and as such the US Federal Reserve will be able to gradually raise rates – look for .25% in December and an additional 1% in 2017 calendar year.

What all this means for US equity markets is strong earnings and growth in 2017 in many different sectors.

An outlyer investment might be the Emerging markets  as a stronger US economy will mean better growth in developing countries. Investors with should keep an eye on near term entry point as many emerging market stocks such as  Mexico and Southeast Asian have tumbled sharply on trade and currency concerns and may recover favourable on.  Investment in a diversified emerging market fund might be the best approach.