Spending Abroad: Cash, Credit Card, Travelers Cheque – What to Choose?

Bank notes or cards? Which payment method should you use when you travel? The ideal solution would be a “mixed” of cash, credit cards and travelers cheque.

Each of these payment methods has its own advantages and disadvantages.

Cash

Although it is a useful means of payment across the world, it is recommended to limit the number of bank notes you carry.

Just a minimum that would suffice for the day can be enough. Otherwise, when you go out for the day, you only have to take what you need.

If you need to withdraw money in your destination country, is is recommended to limit the number of withdrawals to avoid unnecessary fees such as foreign transaction, withdrawal, etc.

Cash is certainly the least secure solution. This is because you will not be able to do anything in case of theft/lost or wear and tear. Even if you try to reach out police for any theft, they may not be able to help much.

Credit Cards

This is the payment method preferred by many individuals around the world because of the security, ease of use, benefits such as rewards points, air miles, lounge access, and more.

When you can pay by credit card, it’s a good option. It’s easy and safe. It’s ideal to pay as much as you can by credit. There’s nothing embarrassing about buying a pack of gum with your card. The main reason is – credit cards offer protection against fraud.

To avoid problems, it is suggested to bring two credit cards from different issuers (a Visa and a MasterCard, for example). If you’re travelling as a couple and you each have a different card, that’s fine.

Traveller’s Cheque

Yes, to the surprise of many, this payment method still exists and is recommended mainly because of its main quality: security.

Only the holder of travellers cheques can cash them and will not lose if they are lost or stolen, as travellers cheques can be replaced.

Final Conclusion

Since there are difference in fees between each of these payment methods, it is recommended to analyze each of the options taking into consideration the security factor.

No matter what means you choose, here are some basic advice:

  1. Separate your bank notes and credit cards between the people taking part in the trip. This will help as in the case of loss or theft, you will not lose everything as the other person will have some form of money.
  2. Write down the emergency numbers of your financial institutions in case of theft. Some also offer a collect telephone number for their clients outside the country.
  3. Watch out for pickpockets as they are present everywhere mostly in public places. And such places are most commonly visited by the tourists.
  4. Get a pocket that blocks RFID waves so you can put your passport and credit cards in it and avoid becoming a victim of fraud.

Also one thing to note, none of the payment option is safe. There are risks associated with each and so are the cons.

Trade War 2018: Impact of Biggest War in Economic History

The war has erupted between the two largest economies of the world – United States and China.

Tit-for-Tat economy scenario has begun as United States has started the “biggest trade war” in history. And to start with, the first country US targeted is expectedly the China – the world’s manufacturing power house.

Accusing the US of starting “the biggest trade war in the history of the economy” by imposing tariffs of 25% which is likely to affect more than 800 Chinese products worth $34 billion worth. The products largely going to get affected are industrial machinery, medical devices, solar panels, washing machines, and auto parts.

In immediate retaliation, with equal scale, equal intensity, China imposed tariffs on U.S. export goods – including cars and large agricultural goods such as soybeans and meat. These products are worth the same as U.S. affected Chinese products.

The United States is also ready to impose 25 percent tariffs on another $16 billion of Chinese exports in the coming months, and China has promised to retaliate against similarly valuable U.S. goods.

But Trump has said his government will respond to Beijing’s retaliation with much larger waves of tariffs, raising the possibility of worsening retaliation. Last Thursday, Trump suggested the possibility of tariffs on at least $500 billion more Chinese goods.

The main objective behind trade war is to safeguard national interests and the interests of people by strengthening manufacturing in their own country. In case of United States, the anger is largely over the $500 billion a year trade deficit resulting because of Chinese goods and another $300 billion because of intellectual property theft. Tariff is actually a punishment to the China for the alleged theft of US intellectual property rights, creating fake products identical to famous US brands, steal and share trade secrets with companies in Mainland China.

The trade dispute between the world’s two largest economies has shaken markets and prompted corporate warnings about the outcome of these policies and higher price for consumers.

The $34 billion tariff on Chinese products went into effect at Friday, 06 July @ 12:01 a.m. in Washington.

How will the tariffs be implemented?

U.S. and Chinese customs services will be responsible for collecting the new duties when imports pass through the port of entry. When the products included in the list of additional charges are declared to customs, the importer will pay the additional taxes.

Russia Jumps into Trade War

Similar to China, Washington imposed tariffs of 10% and 25% on imports of certain aluminium and steel products from Russia.

In retaliation, Russia imposed tariffs of between 25% and 40% on a number of U.S. products in response to the tariffs adopted by the United States on imports of Russian aluminum and steel. This will affect certain industries such as road construction machinery, equipment for the petroleum sector, tools for working metal and rock drilling, as well as optical fibre.

Russian exporters’ losses from U.S. tariffs are estimated at $537.6 million.

The Russian Government, like the other complainants countries, claims that the US tariffs violate provisions of the General Agreement on Tariffs and Trade (GATT) 1994 and the Agreement on Safeguards.

Bilateral talks provide both sides with the opportunity to discuss the dispute for 60 days and to find a mutually satisfactory solution without having to take another step in the WTO dispute. If consultations fail within 60 days, Moscow can ask the WTO to establish a dispute settlement panel, which the United States can block only once.

Trade war with other nations – Europe & Canada

Trump is also ready for a trade war with Europe with car import being the first to hit, which would essentially threaten another $500 billion.

Trump government is also fighting over the issue of trade with allies like Canada.

Impact of Trade War

According to the world’s leading Economists, if the situation of trade war stops here, the overall impact on both the economies will be minimal even though some industries will suffer. However the further spread of trade war will cost jobs and impact growth around the world.

It would also mark a new and damaging phase in a conflict that would shake markets, worldwide, resulting in a gloomy global growth prospect.

Chinese stocks have been hit in recent weeks, entering a bear market, as concerns about the trade war have been mixed with concerns about how the current debt control campaign will reflect on economic growth prospects.

Companies are postponing investment and hiring, because of uncertainty about what happens next.

U.S. stocks will be impacted.

The tariffs are already having an effect. As an example, Chinese companies are reselling US soybeans and Chinese companies are expected to cancel most of the remaining soybean orders they have committed to purchase from the US in the year ending 31 August, once the additional levies come into effect.

Some American businesses are preparing for the impact. U.S. manufacturers and business groups have said that tariffs could increase their costs and translate into price increase for consumers.

US is one of the two largest soybean sellers in the world, along with Brazil. And China is the largest buyer of soybean – with a 60% share of total imports. If tariffs are introduced, U.S. farmers will lose competitiveness in the export market and will immediately need to find other buyers. And this will definitely impact their businesses. American companies have started worrying about the impact of the trade war on their financial health and that of the economy, even though the Trump administration says that growth should not suffer. The U.S. Chamber of Commerce estimates that “about $75 billion” of U.S. exports have been affected so far by retaliatory measures by U.S. trading partners.

Tariffs will have an impact on U.S. businesses, workers, farmers and consumers as foreign markets will close to U.S. manufactured goods and prices rise in the country.

A 10% tariff on US trade that is fully passed on to the consumer could move the global economy into a state of stagnation and reduce corporate profits by 2.5%.

Countries such as Taiwan, Hungary, the Czech Republic, South Korea, and Singapore could also be as vulnerable or more vulnerable to the risk of trade dispute. Taiwan, for example, is a hub for the technology and semiconductor industry and is home to major electronics contractors such as Foxconn, which manufactures Apple’s iPhone, among many other important devices. Electronic integrated circuits accounted for 40 per cent of Taiwan’s total exports.

Hungary, whose largest trading partner outside the European Union is the United States, enjoys large investment flows thanks to a large manufacturing base, especially in the automotive sector. Cars and motor vehicle parts were Hungary’s two largest exports in 2016, accounting for 15 percent of the country’s total.

As the world is in a better recovery mode after the global financial crisis in 2007-2008, the economic uncertainty created because of trade war could put economic recovery at risk, worldwide.

Elon Musk: 10 Motivational Quotes to Start Own Business

This genius behind multi-million dollar companies like Tesla Motors, SpaceX, and PayPal has much to teach us about innovation, creativity, and efforts. This is his story.

We never know when the next child who changes history and breaks paradigms will be born. For our generation, that date was June 28, 1971, and that child was Elon Musk, the South African physicist, investor and entrepreneur who is today working on taking the human race to live on another planet.

Musk is credited not only with creating the first economically viable electric car, the Tesla Roadster, but also with creating SpaceX, the world’s largest private space exploration company.

And if you can talk about a visionary, you’re probably talking about him. His desire to change the world and humanity drastically is imminent in each of his speeches. Some of its goals are to slow down the process of global warming by abandoning fossil fuels for renewable energies, especially solar energy.

Also reduce the risk of a possible extinction of the human race by evolving into a “multi-ethnic civilization” through the creation of a permanent human colony on Mars of about one million people.

He is president of the Musk Foundation, which focuses its philanthropic efforts on science education and pediatric health, and is a trustee of the X Prize Foundation, which promotes the use of clean energy.

And all his achievements would not be possible without his tremendous commitment to everything he does. Musk has described himself as a workaholic who usually spends between 80 and 100 hours a week working at Tesla and SpaceX. On average, he sleeps between 6 to 6.5 hours a day, and on the rare occasions when he has free time, spends it playing with children.

These are 10 famous phrases by Elon Musk that every entrepreneur should read:

  1. Things are not done differently so that they are not the same, but so that they are better.
  2. Something can happen if you have first determined that it is possible.
  3. A human being’s biggest mistake is selling his own startup.
  4. I like to create things related to new technologies and that break with conventions, so that they say to me: ‘Unbelievable! How did you do this? How did you do it?’.
  5. The fact of achieving a great innovation and breaking with the established is not the result of a person, or of an advance, but of a whole collective that has allowed it to happen.
  6. I don’t believe in tricks for an innovative mindset. I think it’s a way of thinking along with the daring to make decisions.
  7. Failure is an option here. If things don’t go wrong, you’re not innovating enough.
  8. Persistence is very important, you must not give up unless you are forced.
  9. Work hard every hour while you’re awake, it’s what it takes to be successful if you’re starting a new business.
  10. The biggest mistake I’ve made (and still make) is to focus more on talent than on the character of my team. It’s important to surround yourself with people who are kind and have hearts.

Swiss National Bank offering Lowest (-0.75%) Interest Rate in the World

Parking your money in the bank earns you interest and is considered a safe haven amongst risk averse investors. However too much of money in the bank is not good for bank either, as they have to pay interest to the depositors. This is the reason banks keep on reducing the interest rate.

For e.g. when Reserve Bank of India (RBI) increased the interest rate the effect ultimately was seen on borrowers as banks also increased their interest rate on borrowings.

Since the interest rate on savings account is already low it is further making Indian consumers unhappy.

But do you know that similar to RBI, centralized banks across the world schedule meetings after a set time interval. And during these meetings, the decision to increase/decrease the rate is taken.

Recently (in Jun’18) Swiss National Bank (SNB) conducted meeting in which they decided to continue with the negative policy rate. SNB has maintained negative interest rate of -0.75%. This basically means that, account holders keeping deposit with the bank will have to pay interest to the bank. Strange isn’t it? Doing this, bank wants to entice consumers to invest more elsewhere and spend more with the money they had instead of depositing it in the bank. This rate is actually the lowest in the whole world.

Similar to Swiss National Bank, Bank of Japan has also followed the suit and has kept negative interest rates.

Reasons for Reducing Interest Rate

There are broadly two main reasons of banks reducing the interest rate as follows:

  1. Increase investment i.e. people will borrow more and hence more profit to the banks.
  2. Increase demand i.e. flow of money in the system. Since banks have more money they can lend more i.e. borrowing will increase. So consumers will start spending or invest in other investment products i.e. spend will increase and hence the employment will spurt. Ultimately economy will grow.

Listed in the below table is the interest rate charged by central banks across the world:

Name of Central BankInterest RateNext Meeting
Reserve Bank of India6.25%August 1, 2018
Bank of England0.50%August 2, 2018
European National Bank0.00%July 26, 2018
Federal Reserve2.00%August 1, 2018
Swiss National Bank-0.75%September 20, 2018
Reserve Bank of Australia1.50%July 3, 2018
Bank of Canada1.25%July 11, 2018
Bank of Japan-0.10%July 31, 2018
People's Bank of China4.35%NA

50 Most Influential People in Global Finance: Policy Makers, Bankers, Thinkers

The published report by Bloomberg Markets magazine on the annual ranking of the 50 most influential people in the financial world whose opinions are taken into account not only by the companies and organizations to which they belong, but also by the governments of all the countries, as their decisions influence the economy of the entire planet.

In times of crisis in the global economy, their presence is increasingly significant and their names are in many cases well known throughout the world.

Selection Process

In drawing up this list, account was taken of those men and women who are influential in the industries or sectors in which they participate, in governments and economies in general, and also those who have made it possible to achieve great results for their companies.

In making this selection, they have taken into account the most influential people in finance at the moment, rather than those who have been influential throughout their career.

The list was drawn up taking into account the opinions of reporters and editors in 146 different offices, reviewing the names that have appeared most frequently in Bloomberg’s news and consulting the different rankings published in the media.

The selection was made by dividing the 50 people into 5 categories:

  1. Policymakers
  2. Bankers
  3. Money Managers
  4. Innovators
  5. Thinkers

In this ranking you’ll find important names such as Christine Lagarde, Director of the International Monetary Fund (IMF), Steve Jobs, who has just left her position as CEO of Apple, or Jamie Dimon, CEO of JP Morgan Chase & Co.

So here’s the list:

Policy Makers

Ben S. Bernanke – Chairman of the Fed

Agustin Carstens – Director of Banco de México

Mario Draghi – Director Bank of Italy and next Director of the European Central Bank

Timothy F. Geithner – U.S. Secretary of the Treasury

Christine Lagarde – Director International Monetary Fund (IMF)

Ali al-Naimi – Minister of Petroleum of Saudi Arabia

Masaaki Shirakawa – Director, Bank of Japan

Wang Qishan – Deputy Prime Minister of China

Elizabeth Warren – Harvard Law School Professor and potential Senate candidate

Zhou Xiaochuan – Director, Bank of China

Bankers

Lloyd Blankfein – CEO Goldman Sachs Group Inc.

Robert Diamond – CEO Barclays Plc

Jamie Dimon – CEO JPMorgan Chase & Co.

James Gorman – CEO Morgan Stanley

Stuart Gulliver – CEO HSBC Holdings Plc

Anshu Jain – CEO Deutsche Bank AG

Jiang Jianqing – CEO Industrial & Commercial Bank of China Ltd.

Chanda Kochhar – CEO ICICI Bank Ltd.

Kenneth Moelis – CEO Moelis & Co.

Vikram Pandit – CEO Citigroup Inc.

Money Managers

Steven Cohen – CEO SAC Capital Advisors LP

Ray Dalio – Founder Bridgewater Associates LP

Laurence Fink – CEO BlackRock Inc.

Jeremy Grantham – Co-founder GMO LLC

William Gross – Co-Director of the Investment Office Pacific Investment Management Co.

Ho Ching – Executive Director Temasek Holdings Pte

Lou Jiwei – CEO China Investment Corp.

Mark Mobius – Managing Director Templeton Emerging Markets Group

James Simons – Director Renaissance Technologies LLC

George Soros – Director Soros Fund Management LLC

Corporate Innovators

Mukesh Ambani – President Reliance Industries Ltd.

Eike Batista – Chairman MMX Mineracao e Metalicos SA

Warren Buffett – CEO Berkshire Hathaway Inc.

Jeffrey Immelt – CEO General Electric Co.

Steve Jobs – Former CEO Apple Inc.

Mikhail Prokhorov – Founder Onexim Group (Russia)

Wilbur Ross – CEO W.L. Ross & Co.

David Rubenstein – Managing Director Carlyle Group

Carlos Slim Helu – Director America Movil SAB

Ratan Tata – Director Tata Group

Thinkers

Carson Block – Founder Muddy Waters Research

Martin Feldstein – Harvard University Professor

Jan Hatzius – Chief Economist Goldman Sachs Group Inc.

Daniel Kahneman – Professor Emeritus at Princeton University

Paul Krugman – Professor Princeton University

Jim O’Neill – Director Goldman Sachs Asset Management

Carmen Reinhart – Author of the book’This Time Is Different’.

Robert Shiller – Yale University Professor

Joseph Stiglitz – Columbia University Professor

Nassim Taleb – Professor New York University