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Paying for US Shares

How can you pay for US Shares?

How can you pay for US Shares?

When you buy U.S. shares you need to settle this in U.S. Dollars. As an Australian, you probably only have Australian Dollars. The traditional way of buying U.S. shares is to open an account with a broker who has access to U.S. markets. That broker will operate in one of two ways:

1. You’ll need to send them USD before you can buy a share. This will require you to go to your bank and instruct them to convert your AUD to USD and send it to the broker. The banks will charge a transaction fee of around $35 for this, but this cost is insignificant compared to the fee hidden in the exchange rate.

Have you ever noticed that the exchange rate which the bank gives you is different to the exchange rate that you see quoted on TV? This difference is what the bank is charging you to exchange the currency and it can be as much as 3 to 5%. But once you do this, you’ll have USD available to buy U.S. shares with.

2. Your U.S.-enabled broker might direct debit your Australian bank account, as they do when you buy an Australian share. In this case, the information above about charging a hidden fee in the exchange rate will apply every single time you buy or sell a share. Capital 19 has revolutionised this space, offering its clients fair and transparent pricing. Once your account is open, you’ll need to fund it with Australian Dollars. You can then elect to transfer as much of these Australian Dollars into U.S. Dollars as you like. This transfer is done at a true wholesale exchange rate. This means the rate you’ll get will be the same as the rate you’ll see advertised on TV, with no hidden fees.

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This is an excerpt from the book ‘An Australian’s Guide To Investing In U.S. Stocks‘ by Matthew Jones.

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Disclaimer: Capital 19 Pty Ltd ABN 17 124 264 366 AFSL 441891 (‘Capital 19’) believes the information contained is reliable, however, no warranty is given as to its accuracy and persons relying on this information do so at their own risk. This communication is for general information only and was prepared for multiple distributions and does not take account of the specific investment objectives of individual recipients and it may not be appropriate in all circumstances. Persons relying on this information should do so considering their specific investment objectives and financial situations. Any person considering action based on this communication must seek individual advice relevant to their circumstances and investment objectives. Subject to any liability which cannot be excluded under the relevant laws. Any opinions or forecasts reflect the judgment and assumptions of Capital 19 and its representatives based on information at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future. The investment manager certifies that all the views expressed in this document accurately reflect their views about the companies and securities referred to in this document and that their remuneration is not directly or indirectly related to the views. Capital 19, its directors, representatives, employees or related parties may have an interest in any of the companies and securities in this document and may earn revenue from the sale or purchase of any financial product referred to in this document or any advice. Past performance is not a reliable indicator of future performance. Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this document is prohibited without obtaining prior written permission from Capital 19.
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