Live Richer For Less: Turn Currency Exchange Into a Wealth-Building Strategy
The U.S. dollar rules the world—for now. But what if you could flip its dominance into your personal gain? In a system where currencies rise and fall, here’s how to make it work for you. What if simply holding U.S. dollars and living in another country could significantly boost your purchasing power and stretch your wealth further?
Whether you dream of retiring abroad, traveling long-term, or just exploring financial opportunities outside the U.S., understanding how currency exchange rates work can open the door to a smarter, wealthier lifestyle. This post explores how earning in USD while spending in a weaker currency—like the Colombian Peso (COP)—can stretch your money further, whether you’re retiring, traveling, or living abroad.
First, a quick understanding on exchange rates: 1 USD doesn’t equal the same value everywhere. Take Colombia as our example. As of today, 1 USD is worth approximately 4,100 COP. Back in 2012, it was just 1,700 COP. That means if you exchange $1,000 USD today, you’d get about 4,100,000 COP to spend in Colombia—roughly 2,400,000 COP more than you would have in 2012. That’s a significant jump, and it’s the key to unlocking this financial opportunity.
Below is a chart of the USD vs COP:
Since 2012, the USD has surged 148% against the COP—echoing how it outpaced the Mexican Peso in the ‘90s or the Argentine Peso in 2001. But we can’t ignore inflation. Over the same period, Colombia’s inflation rate has been roughly 110-120%, meaning prices have more than doubled—what cost 1,700 COP in 2012 now costs around 3,500 COP.
How This Impacts Your Cost of Living
Now how can you use this to your advantage? Let’s say its 2012 and you lived in the US your whole life and built your nest egg here and now are retiring. You decide you wanted to move to another country or just travel for a few years exploring the world. Lets say Medellin, Colombia is one of your stops and want to live there for a few years before going somewhere else. How does that effect your life long nest egg?
Here’s the kicker: your USD buys 4,100 COP, while goods hit 3,500 COP after inflation—a 16-17% gain in real purchasing power. It’s not just savings; it’s an asset. In practical terms, your expenses feel 16-17% cheaper than they would have in 2012, assuming your income or savings are in USD.
Imagine this scenario: It’s 2012, and you’ve built a nest egg in the US. You decide to retire or travel, landing in Medellin, Colombia, for a few years. With your income in USD and expenses in COP, the exchange rate works in your favor. As the USD strengthens relative to the COP, your dollars buy more over time, effectively lowering your cost of living.
The Cost of Living in Medellin vs. the U.S.
Medellin, known for its "Gringo-friendly" atmosphere, is a prime spot for this strategy. English is common, and international residents are flocking there, driving growth. Sure, some areas are best avoided—like any major city in the U.S.—but the city’s appeal is undeniable. And the cost of living? For a family of four, it’s 114% more expensive in the US than in Colombia (111% for a single person). Put another way, living in Colombia costs less than half of what it does in the US when your income is in USD.
Lets take a look the average cost in the United States and compared to Medellin and its everyday goods:
And now lets look at Medellin:
Consider an annual income of $100,000 USD. If you maintain that income but live in Colombia, it’s comparable to having over $200,000 in US-equivalent purchasing power. As long as the USD continues to outpace Colombian inflation and remaining strong against the COP, your expenses could keep shrinking.
Taking Advantage of Real Estate Opportunities
The strength of the dollar doesn’t just apply to daily expenses—it also applies to major investments like real estate. With USD, you snag bigger homes, prime spots, and luxury in Colombia—think a $400,000 villa vs. a U.S. condo. It’s not just a house; it’s a legacy your kids inherit or rent out.
For example, just outside Medellin, you can purchase a high-end property for around $400,000 USD—a fraction of what the same home would cost in the U.S. This kind of value highlights the perks of currency arbitrage.
Below is a property currently is going for just over $400,000 USD and is 45 minutes from city center. For the full listing and photos, you can see it here.
The Bigger Picture: A Global Strategy for Building Wealth
The U.S. dollar’s dominance isn’t just something governments and big businesses benefit from—you can use it to maximize your wealth and create financial freedom. Whether you’re considering retiring abroad, becoming a digital nomad, or just investing in international real estate, understanding currency trends can be a game-changer.
By strategically leveraging a strong currency like the U.S. dollar in countries with a lower cost of living, you:
Stretch your income further.
Lower your cost of living without sacrificing quality.
Invest in real estate and assets at a discount.
Protect your wealth from inflation in the U.S.
This strategy shines while the USD stays strong, but currencies shift—think Argentina’s 2001 crash or Venezuela’s bolivar today. Spread your wealth across international markets or stable currencies to balance the risk or securing value with commodities (like gold).
A Legacy That Stretches Further
Turning dollar demand into a wealth-building strategy isn’t just about living cheaper today—it’s about crafting a legacy that endures tomorrow. History shows currencies shift; the USD’s strength won’t last forever, but while it does, you can stretch every dollar into a tool for your family. This isn’t a savings account that sits idle or a stock that might crash—it’s real purchasing power you control. Grab that Medellin property, launch your next chapter, or set your kids up for success—all while your dollars stretch further than ever.
At Eagle Legacy Planning, we teach you to rethink wealth beyond borders. Doubling your income isn’t magic; it’s math, mindset, and a move. Ready to make the dollar work harder for your legacy? Join our Cashflow Group, subscribe to our blog, or schedule a call at eaglelegacyplanning.com. Build wealth that doesn’t just grow—it lasts.
Disclaimer:
This newsletter is for informational purposes only and does not constitute financial advice. The author is not a financial advisor. Always do your own research before making investment decisions.