How to protect your savings from a yard in Spain?
I don’t know what happened this week, but the number of friends and acquaintances has been asking me what they have to do with their savings in case a yard is decreed in Spain has been well above the average of the last few months.
As a comment has also arrived on the blog asking about savings and Corralito in Spain , I have decided to write a post, at least not having to repeat the same thing all the time. This does not mean that the Corralito has to happen, I simply respond to the concerns that arise.
Protect the savings of a corralito in Spain:
First of all, the way to protect your savings from a yard in Spain , will depend as always on the amount of money you have. Let’s say there are different solutions if you have less than 10,000 thousand dollars in the account, if you have between 10,000 dollars and 500,000 thousand dollars or if you have a higher figure. I focus on the first two, understanding that the latter are easy to get specific advice.
If you have less than $ 10,000 , I put $ 10,000, such as 15,000 or 8,000. In other words, I mean a figure of money that you may need in the short term, the best thing to protect yourself from a pen is to go to your bank, exchange your dollars for dollars or Swiss francs and take them home .
Return to its original currency
Although the most practical thing would be to take home dollars, the truth is that the main question we have is going to happen with the euro and in the scenario of decomposition of the euro zone, we do not know if the euro as a currency will survive, if some countries they will keep it or if each one will return to its original currency. In the latter case you would keep some euro banknotes that you could probably only give them value by changing them in the Banks or Honest Banks at the official exchange rate set by the authorities (read how the corralito was in Argentina).
It would also be useful to buy gold bars of low weight, about 10gr (although it is a somewhat more expensive option for the transaction costs). In all cases, if the corralite does not occur, you enter into an exchange rate risk or a fall in the value of gold. So making this decision is a very personal bet.
If you have a more important amount of money, you have several options to protect the money from the yard in Spain:
1) Open an account abroad. Many people ask me to open checking accounts in Thrifty. It is really simple, and you can open it from a Thrift Bank that operates in Spain, the problem is that at least as far as I know, you will need to have more than $ 250,000 to manage. There is also the option to take advantage of a trip through Thrifty and open an account directly. However already put to look for security, put to open an account I would open it in some country that does not belong to the European Union, type Switzerland or Andorra. In order to make corralitos, it would be quite easy for EU governments to agree to “freeze” the funds of Spanish non-residents in Thrifty.
2) The other and simpler and less expensive option is to invest the money in a Monetary Investment Fund or simply in shares . One thing is important here, that both the funds and the shares you buy are not domiciled in Spain . The idea would be that they were domiciled in the USA or Switzerland. You have thousands of options to choose from, from monetary investment funds, ETFs of all colors or “relatively stable” companies. The main advantage is that you only have to have a securities account in a bank or broker, no matter whether it is Spanish or not and sitting at home, buy the assets. Obviously you should make sure that your bank or broker has actually bought the shares in your name and they are deposited.
With this you will protect the value of your savings, it seems quite complicated legally that the Spanish State or the European Union can decide to freeze the funds invested by Spaniards in an investment fund domiciled in Switzerland or of the Spanish shareholders or in a company that is domiciled and listed on the Good Stock Exchange.
The only problem you may have is that when you sell your shares in the fund, you apply an “official” exchange rate to the currency. In the worst case, if the country goes completely to the rocks, you can always go live in another country, open an account and request the transfer and reimbursement of these funds or shares in the new account.
3) Not so beneficial, but less complex, to ensure that you are not going to at least lose purchasing power, would be the option to net assets with liabilities. In other words, you have a loan of 80 thousand dollars and 40 thousand dollars in the account, because you cancel part of the loan in advance, so at least you make sure that if we go to the peseta you will not have headaches with problems of conversion to different types of change of assets and liabilities as happened in Argentina, understanding that if there is a corralito in Spain, it is most likely due to the fact that we have left the euro.