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Investing Abroad Using a Foreign Currency

What better way to feel like one of the locals than investing your money in your destination country?

I’ve already outlined how you can obtain foreign residency and how to apply for a visa. I’m strutting my stuff in Spain with a non-lucrative visa but lots of other great options available for the digital nomad physician.

Speaking of nomading, I’ve also outlined how to earn a location independent income. I do it through a mix of telemedicine and healthcare consulting or medical consulting. Though I am considering clinical work locally as well.

Here I am, in España, can’t even speak the language enough to order a goddamn coffee. But I can invest my money here like the best of them. Financial numbers are blind to your country of origin and don’t give a shit if you’re a lady or a dude.

Investing in Spain is rather similar to investing in the US. There are brokers you can sign up with to buy the same ETF’s you’re familiar with in the US. There is plenty of real estate to be flipped or bought as a rental income properties.

Rates of return might be lower in Spain but so is the cost of living. €1,500 per month can offer you a very comfortable lifestyle. Especially if your primary residence is paid off.

Spain has P2P lending, similar to Lending Club in the US. Money is lent to the locals here in Spain using peer-to-peer lending just like in the US.

Bonds are available here as well. Though the returns are abysmal. They still have some negative interest rates bonds here; like we had in the US after 2009.

The Money Transfer Problem

The first hurdle to overcome is converting your USD into EUR. My bank was of little help, offering me rather shitty rates. They don’t charge you a “fee” for the currency exchange but they skim off the top by offering you a terrible spread.

It’s better for the bank to just charge a fee instead of hiding it in the exchange rate. That’s the classic trick currency exchange shops use – so why my bank?

Transferring Money to Spain – ATM

I went to the ATM the other day because I needed cash, desperately. I had spent my last €1.10 on a café solo. I was jonesing for more mud and just had a few cents.

I stopped by a Deutsche Bank which is notorious for the lowest ATM fees. My luck, due to construction nearby, a brick had fallen on the ATM screen. I decided to try a different ATM nearby.

I went to Santander and these scoundrels charged me €25 to withdraw €100. That’s 25%! There was a fee on top of a terrible exchange rate.

A few days later I went back and the DB ATM was sporting a brand new screen. We said hello and I made off with €400 without any fees! None. And the exchange rate was very favorable: €1 = $1.119.


I can go back daily to DB and withdraw money from the ATM but at some point my US bank will put a stop to it. Or Deutsche Bank will stop feeding me money.

There is a company called Transferwise which has a transparent pricing structure. You send them USD and they will send you EUR. They will charge you somewhere around $50 for $10,000. And you get market rates on the Forex. Can’t beat that.

The Dreaded $10k Limit

There is this fear that many have with hitting that $10,000 limit when depositing or transferring money. You see, the banks have to report any transfer or deposit over $10k to the government under the FinCEN.

This is to make sure that you’re not engaging in any money laundering or other illegal activities. Some try to circumvent it by making two $5k transactions a few days apart. Nice try; that’s called a structured transaction and bank software looks for that.

Look, you’re always being watched, unless you got something to hide, why add that headache to yourself. You have to report any money you hold overseas to the US anyways – keep it simple.

The Currency Problem

When you invest overseas you also have to worry about the currency risk. Even if you make a solid return on your investment, you may lose it all if you have to convert your EUR returns into USD.

It all depends on how the markets perform. Forex trading is a whole religion in some circles. It’s why some countries offer 25% savings account deposits. Their currency is so unstable that within a few months inflation will eat up all of those returns.

Fortunately the Euro isn’t that unstable. Still, it’s yet another layer which you have to take into consideration if your goal is to earn in EUR and spend in USD.

Spending in Spain

If you aren’t planning on converting your money from EUR to USD and instead plan on spending it in Spain, you no longer have to worry about the currency factor. At least not from EUR to USD.

It’s fine to have a money stash in the US and one in Spain. Spend EUR in Spain and spend USD when you’re in the US.

The Income Factor

But… but… to add another layer of complexity to this, where is your initial money coming from? If you’re earning money in the US and converting it to EUR and investing it in EUR, you’re still taking on a currency risk.

Now, if you have enough investments in Spain that you’re earning your “income” from your Spanish investments, then you can curb the currency risk by making large, one-time deposits.

This still isn’t perfect. Having a good financial advisor walk you through this is a good idea. Tracking your returns is important when doing this so that you don’t end up with a negative return when it’s all said and done.

Getting Paid in Foreign Currency

Transferwise has a multi-currency account or Borderless Account, as it’s aptly pegged. You can hold multiple currencies in the same account.

They also allow your customers or employers to pay you in different currencies. This isn’t an option for me right now because my healthcare consulting clients pay me in USD. With this Borderless Account I can get paid in any currency I choose.

Investing Abroad – Spain

Peer-to-Peer Lending

One of the easiest ways to get started in investing is to start with peer-to-peer lending. You can lend money to businesses or to individuals. Many use P2P lending to secure a down payment for their mortgage or to buy their business or to renovate their home.

The rates seem to hover around 11% here in Spain. Some notes are a little higher but of course you get some defaults.

I don’t want to get into the weeds with this. I’ve done P2P lending before using Lending Club and it’s for you to decide if it’s the right strategy for you.

Mintos is a popular European based P2P investing platform. Though there are many others.

Real Estate Investing Abroad

I see 3 different real estate investment models in Spain.

Flipping distressed properties. By distressed I mean bureaucratic distress. There might be a loan or lien attached to the house. Maybe there are other legal issues with it. Navigating these matters is a nightmare in Spain, from what I understand. With the right team to can exorcise such properties and get them market-ready to turn a profit.

Traditional rental income properties. More families are moving outside of city limits in larger Spanish cities. Often times these homes need a little TLC to become rent-ready. They can be purchased for less than €50,000 even in large cities and can be rented out for a decent return on investment.

Short-term rental income. Whether you’re for or against AirBnb as a business model, short-term rentals are still legal in many Spanish cities. The demand for such properties is insane as of 2019. Some property managers will charge 30% and will handle all of the booking, turnover, and property management tasks. Despite this fee, you can still turn a decent profit from such units.

3 replies on “Investing Abroad Using a Foreign Currency”

Dr. Mo, what are you doing using these rando banks? Charles Schwab has no ATM fees, and no foreign transaction fees, worldwide. Even in the U.S., this is a huge relief – I can literally go to any ATM I want and not worry about the fee. Add to that that I can travel anywhere in the world and just stick my ATM card in and get that country’s currency, at the global exchange rate, and I don’t know why anyone would bank with anyone else.

Ugh, dude, I know. So I setup my CS checking but didn’t get the card in time and didn’t want the headache of having them ship it to my Spanish address. You can’t apply for it once you’re out of the country – I mean, you could but it’s against their policy and I don’t want to break any rules.

ack, that’s frustrating! well, you applied while you were in the U.S., so IMO, you haven’t broken any rules. you just need the card. presumably you can have it shipped to a u.s. address, and then have someone bring it to you?

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