There are two primary reasons why you would care about current exchange rates.  Either you’re planning to leave the country and need to budget the amount of money you have against the other countries economy, or you’ve done some investing and exchange rates dictate the profit you can make.  I’ve never had the pleasure of doing either but from a mathematics perspective, exchange rates fascinate me.

Exchange rates are determined on basic supply and demand principles.  For example, if interest rates increase in the United States, the demand to save money in the best US banks will increase, adding value to the dollar.  On the contrary, if inflation occurs at a higher rate in the US than in other countries, the demand for US goods decreases thus decreasing the value of the dollar.

Everyday, the value of a countries currency fluctuates and as of February 2012, we’re looking at the following currency conversions:

Currency	Converted to a US Dollar	A US Dollar Converted to
Euro	1.31750	0.75901
British Pound	1.58506	0.63089
Canadian Dollar	1.00106	0.99894
Australian Dollar	1.07009	0.93450
Mexican Peso	0.07720	12.95390
Swiss Franc	1.09354	0.91446
Russian Ruble	0.03311	30.20270
Indian Rupee	0.02034	49.16510
Japanese Yen	0.01314	76.12140
Israeli New Shekel	0.26796	3.73184

A common misconception is that purchasing power is equal among nations, so If I moved to Russia, I immediately increase my wealth 30 fold.  The McDonald’s dollar menu in the US could be the 30 ruble menu in Russia so anyone planning a move to a country simply because the dollar is “worth” more than the local currency will be in for a big surprise.

With all of the price increases in the United States, you’re probably thinking that the US is the most expensive country to live in but that’s not close to accurate.  Most economists would rank the US as the 10th – 15th most expensive country to live in and if your looking to blow your wealth as fast as you can, you may want to consider moving to one of these five most expensive countries.

1. Japan
2. South Korea
3. Russia
4. Taiwan
5. Norway

If you break it down even further, the United States only has one city ranked in the top 10 as most expensive and it’s not New York or Los Angeles as you might think.   Chicago continues to be the toughest city on your wallet but again, if you compare it to Tokyo or Moscow, it’s no contest.

Planning international trips can become very difficult if you plan to pay for everything with cash because some countries just won’t accept US currency.  This means that you’ll have to find a currency conversion center, which can charge a fee.  The smartest thing to do would be to find a credit card that is accepted worldwide but even that solution can cost you hefty international transaction fees.  Make sure you have a plan in place before leaving because ending up in a country with no way to pay for goods in services can be an absolute nightmare.

When you try and think which of our worlds 200+ countries are the largest, a few have to come to mind.  Immediately, Russia pops into your head because it just takes up so much of the globe and probably countries like the US and Canada but would think to include a few from South America and even one from Africa?

Below are the ten largest countries in the world, by area.  Surprisingly, this list might change very soon, so we’ll be sure to keep it updated.

1. RUSSIA – At over 6.5 million square miles, Russia is by far the nation taking up the most of the world’s area. Russia spans all of Northern Asia and 40% of Europe, and has citizens living in nine time zones. (And we in the US thought calling cousins on the other coast was inconvenient.)

2. CANADA – Our northern neighbors come in a distant second with 3.85 million square miles of land mass. Canada spans from the Atlantic to the Pacific, and also borders Alaska to the east. Canada also boasts ease of border crossing with the US, provided you have a passport.

3. UNITED STATES – The USA is a close third, having expanded from the original colonies of the Revolutionary War to its current area of 3.71 million square miles. The US also boasts the world’s largest single nation economy, although by some estimates the economy of the European union is larger.

4. CHINA – With 3.7 million square miles, China is the second largest country in Asia and the fourth in the entire world. It recently usurped Japan for the second largest economy.

5. BRAZIL – South America’s largest country contains 3.2 million square miles. It is also the world’s largest Portuguese speaking nation, having achieved independence from its Portuguese settlers in 1822.

6. AUSTRALIA – The only country with a continent all to itself, Australia contains 2.97 million square miles. Australia was first discovered by the west in 1606. At times, parts of Australia were used as a British penal colony.

7. INDIA – The booming South Asian nation has 3.3 million square miles to call its own. In addition to coming in seventh in size, India comes in second in terms of population. The Republic of India has 1.2 billion citizens.

8. ARGENTINA – The second South American country on our list spans 1.07 million square miles. In addition, Argentina is the largest among Spanish speaking nation, although other Spanish speaking nations are more populous.

9. KAZAKHSTAN – Somehow, the movie Borat neglected to mention that the titular character’s home nation spans 1.05 million square miles. Kazakhstan is in Eastern Europe and Central Asia, and is also the world’s largest land-locked country. The country is very diverse, largely because of massive deportations to the country by the Soviet Union during Stalin’s rule.

10. SUDAN – With just over 967,000 square miles, Sudan rounds out our list at number ten. This fact is bound to change soon though, as the Sudan will soon split into two nations: North Sudan and smaller South Sudan. South Sudan makes up about one-fifth of Sudan’s current area.

With the Sudan poised to split, Algeria will soon take up the number ten slot. After that, we can expect few changes in the order of the list. There’s not much like likelihood of takeover in the future, and there’s no unclaimed land left on the Earth. Although it’s not inconceivable that some countries could meld together, there aren’t any experts predicting any such shifts in the near future.

In terms of teaching financial literacy, parents today have it rough. Companies from every sector spend millions to aim their products at young people. Teaching a teen to save and manage money without impulsive spending is not made easy in the age of MTV Cribs.  Thankfully, parents may have a new tool in their portfolio to help educate their young ones about how to manage their money: MatchFund.com. Imagine a social networking tool that allows you to link up with your teen, set up a money management plan, and reward their savings with matched funds. MatchFund allows you to teach your teens the language of money with real funds. It’s a real, down-to-earth exercise in money management, augmented by social networking technology.

There are few creatures on this Earth more impulsive than the human teenager. For many teens, its difficult to develop the awareness that small spending today affects large spending tomorrow. You want to help your teen understand that spending money to go out to eat with friends means not saving toward a larger purchase down the road. But how to impress that upon them early?

Let’s run through a pretty standard teen-saving scenario. Your teen has three things to save for: an iPod, a college fund, and building up rainy day savings. You and your teen can sit down and develop goals for their savings. You can set the goal of $300 for the new iPod, for example. You can set up matching funds for these savings to reward your teen for managing small amounts now in the interest of big purchases later. You can also link your teen with other family members and invite them to help reward saving. It’s the same approach as saying, “Your grandmother said that if you save $250 for that new iPod, she’ll make up the last 50 bucks.” Now, it’s just online and adapted to suit the millennial generation. Friends and family can also contribute funds as birthday or holiday gifts.

In addition to fund matching and goal setting, MatchFund allows your teen to see what they’re spending money on. MatchFund links to a co-managed credit card and breaks down your teen’s spending habits, much in the way of many banking sites or personal finance sites such as Mint.com. In other words, it provides a graphic breakdown of how much money your teen spends on food, entertainment, clothes, etc. This allows them to see right away precisely how much they spend on certain things, and where they can cut back to make room for savings.  MatchFund also provides teens and parents with a way to invest in an interactive stock market. Parents and teens can compete to choose winning stocks. The site also shows updates on college loans, grants and scholarships.

Now, when your teen is considering spending and extra $10 on a movie, they’ll be more likely to consider how much that purchase might delay a larger purchase they’re much more interested in. To top it all off, MatchFund is safe and secure. While it may not result in cleaner bedrooms or better table manners, it can be a valuable tool for parents looking to lay the foundation of a strong financial education.

Lending money to family and friends is usually a complicated situation and one that most people try to avoid at all costs.  What? You mean you’ve already lent it? In that case, collecting on that loan really comes down to the type of relationship you have with the person and how serious you are about getting your money back.  Keep in mind, not all cases of lending money to family members go sour. In fact, you probably have plenty of examples of when they’ve turned up rosy. As with all relationships, it really comes down to communication and compromise. In most instances of family loans, you’re going to need a lot of both.

The best way to do this is to refer to a written agreement for the terms of the loan. You should have established these terms back when you were asking yourself whether or not you should loan money to your family or friend in the first place.  The contract, for lack of a better word, should cover issues like payment schedules, loan interest, debt settlement and so on. If you have one in place, you have a structured plan to fall back on. If you didn’t figure out the terms before, things could get a little more problematic.

Family and Money

Not all family dynamics and friendships are the same, so you can’t take the same approach with everyone. Yet there are a few universal steps to collecting on debt owed to you from your kin. Like all things involving money, cooler heads usually prevail, so keep your emotions in check.

1. Communicate: If you have concerns whether your family or friend isn’t as focused on repaying the loan as they should be, talk to them. Bring up the reasons why their actions are making you feel uneasy, but don’t make personal attacks. You shouldn’t feel uncomfortable approaching the subject considering the fact that you felt close enough to this person to trust them with a loan in the first place.
2. Be Reasonably Flexible: You need to remember this isn’t just a borrower who owes you a debt. This is a person with whom you share a personal relationship. The primary reason for the loan was to help them out of a tough spot, a situation they may still be dealing with. You need to be flexible and adjust your payment expectations while they get back on their feet. It’s okay to settle for a sign of good faith in lieu of a check for the time being if you don’t have an urgent need for the money.
3. Stay Composed: Money does funny things to the mind. It makes people say hurtful things they don’t mean and can magnify certain strains within a relationship. Don’t fly off the handle, even if your natural instincts encourage you otherwise–that’s the best way to lose your money and a relationship.
4. Seek Legal Recourse: The worst case scenario is when things go bad and you need to take legal steps in getting your money or some type of collateral back in return. If you had a written agreement in place, this may be easier to enforce. If you didn’t, you may not have a leg to stand on unless you have documents showing a transfer of funds and decide to take the case to small claims court. This is obviously the last resort.

Help You Help Them

Ironically, you’re actually in better shape if the borrower is still trying to figure out their finances. This means they’re still putting in the effort and plan to pay you back when they can. If, on the other hand, they’re spending freely and irresponsibly, chances are paying you back is not really a priority.  In that case, it may be time for a little tough love. This is important not only because they aren’t paying you back, but they’re also engaging in a lifestyle that forced them to have to borrow money in the first place.

Collecting Money from Family and Friends

Use a firmer approach to establish an understanding between you and your family member or friend. This will help them grasp the gravity of the loan repayment. If they’re taking your generosity for granted, it’s a betrayal of your trust and your relationship. The fact of the matter is that you helped them out of a tough situation, but now they’re putting you in one.  Unfortunately, as with all loans, you have to accept the fact that you might not ever get the money back. At that point, you’ll just have to chalk it up to a lesson learned. The only thing to do then is decide whether or not you want to maintain the relationship, because at that point, it’s not just about the money anymore.

This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide. Follow them on Twitter at @gobankingrates.

As the holiday season approaches (really, it will be here quicker than you know it), people are beginning to save and decide on their gift giving plan. With the economy having experienced some rough bumps this year, it is uncertain how successful retailers will be this season. One thing is for certain, there has been and will likely continue to be a decline in charitable giving this year. According to “Giving USA 2010: The Annual Report on Philanthropy,” released by the Giving USA Foundation and the Center on Philanthropy at Indiana University, total charitable giving in the U.S. declined 3.6% in 2009.

Total charitable giving in the U.S. fell to $303.75 billion in 2009, down from $315.08 billion the year before. Sad, but true, as many Americans have been forced to tighten their purse strings, their ability to give to others has declined. Despite the rough economic times, there are certainly still ways to give back this holiday season and make a meaningful impact. Some of these suggestions are worth considering and may even be more gratifying than you would have imagined.

Buy gifts which provide a percentage to charity – There are some ways to buys and still give back. Certain retailers and designers team up with worthy charities for the holidays either giving a portion of overall sale proceeds or proceeds from a particular item to a charity. In the past, retailers such as Tom Shoes or American Express have been involved with charitable giving during the holidays. Inquire about specifics with the retailer. Additionally, many charities are creating gift-like products so that consumers can satisfy the gift giving need while giving back. The Pancreatic Cancer Action Awareness Network has its own online shop which offers clothes, jewelry and home items while UNICEF has a store full of interesting, international gifts, including candles, journals, and books.

Buy Christmas/holiday cards which support your charity of choice – The holidays is often a time when we update friends and family about what has happened in our lives during the past year. Why not use this opportunity to buy cards which support your favorite charities.

Give your time – It is understandable if money is tight, however, time may not be. If you can’t afford to give financially, devote some time to a charity of your choice. Whether this means an afternoon at the soup kitchen, volunteering for a particular event, or even helping to raise money, your time can be very important. One afternoon can help make a difference.

Incorporate giving into a holiday event – Does your office normally have a “Secret Santa” party at holiday time? Rather than buy co-workers gifts, encourage employees to give the $20 amount normally spent on the gift to a charity of their co-workers choice. This will make everyone feel as if they’ve given back and it is possible to target several charities this way.

Set aside a little each month – If money is particularly tight at the holidays, plan ahead and put aside a little bit every month. You can save this money to give at the holidays or even give on a monthly basis. December does not necessarily have to be the month you write a check. Charitable giving can be a monthly part of your finances.

One thing is for sure, there are many charities and many people and organizations in need. Try to find it in your heart to give back in some small way during holiday season.

The hundred dollar bill is a highly counterfeited piece of US currency, but starting in February of next year, printing fake bills will get a little bit harder.  Back in April, treasury secretary Timothy Geithner announced a new $100 bill, one that would be considerably tougher for aspiring crooks to fake. According to a statement, the new bill, like its predecessors, employs the very latest technology to stop would-be thieves in their tracks.

For starters, the new hundred-dollar mark carries a special image of the Liberty Bell surrounded by an inkwell. No standard illustration, this imprint shifts color from copper to green as the bill is tilted against a source of light. (Ambitious Xerox armed counterfeiters, beware.)

Adjacent to the Liberty Bell in inkwell image is a numeral 100 that will also shift in color as the bill is tilted against the light. That might seem like a bit of a redundancy, but keep in mind that it’s one extra step a counterfeiter has to take to print a fake. So if you’re checking a bill, take note of both the bell and the numeral 100 in the bottom right corner of the bill’s front.

In addition to the standard center portrait of Benjamin Franklin, the right side of the bill will display a watermark image of the founding father. Hold the bill against the light, and you’ll see the faint image of Franklin formed in varying degrees of darkness and light.

The hundred-dollar bill will still feature the security thread seen for years in US currency. The security thread is woven into the paper of the bill. To check it, hold it up to the light and make sure you see a continuous line over the entire length of the bill. If not, the thread it is printed on, and the bill, is not genuine.

Next we come to the new bill’s most jaw dropping of new features: the 3-D security ribbon. That’s right: the same state of the art technology that had you leaping out of your theater seat in awe of Avatar will now help divert peddlers of phony bills. The 3-D ribbon will rest on the front of the bill. Worry not: you won’t need to carry a pair of those clunky, Star Trek convention goggles to spot a bogus bill. Tilt the bill just a bit, and images of bells and digits will come into relief.  Officials say you’ll know if the bill is a fake within seconds.

The rear of the bill bears a stunning image of Independence Hall, the famous landmark wherein both the Declaration of Independence and the Constitution were authored. The clock on the hall reads 4:10, with a clock face incorrectly labeled “IV.” (The real Independence Hall has a Roman numeral four written, “IIII.”

As stunning as the new bills may be, don’t get too used to them. According to Treasury officials, the average circulation life of a C-note is approximately five years. After that, the typical bill is replaced due to wear and tear. Hanging onto any mangled bills? Head on down to your local bank. Commercial banks will exchange overly worn or damaged currency for circulation worthy bills, provided that at least one half of the original bill is present.

For more information about upcoming changes to the $100 bill, check out the video below.

Mistakes. They are a part of life. We all make them. And mistakes when it comes to money are a fact of life. But like turning lemons into lemonade, we can either benefit from our mistakes and make the most of them, or we can run from them and pretend they don’t exist. This hit home for me recently in an email exchange I had with a reader. In a recent post that discussed peer to peer lending, I made a mistake. I spelled principal (as in principal and interest) with a “ple” at the end. Talk about a dumb mistake for a personal finance blogger to make who claims to know something about making money. So a kind reader sent me the following email:

Very good analysis. However, she has paid off some principal on the loan, not principle (although we all agree that, in principle, it is a good idea to pay off some of the principal).

I was mortified. I immediately corrected the error, and because a reader pointed out the mistake, I didn’t just delete the “ple”, but crossed through it so future readers will see the change I made. I then responded to the reader thanking him for pointing out my mistake. It was his response that became the motivation of this post. He wrote,

Hey, we all make mistakes, otherwise we wouldn’t be blogging, we’d be golfing or whatever it is that you’d like. You know, it is amazing how many times I find errors like that and how few authors accept the comment without getting all huffy over it. You got class.

The fact is that some of our best successes are born out of mistakes. I’ve made many mistakes with The Dough Roller, and most of them have allowed me greater success down the road. In one case I made a terrible mistake with a post in terms of Search Engine Optimization (SEO). I went from a #2 ranking and 500+ search engine visitors a day to virtually no ranking and about 20 visitors a day. But I learned several important and valuable lessons about SEO.

Of all the things we talk about on this site, learning from our mistakes is one of the most important. If you can learn from your mistakes, you can do just about anything. So here are a few suggestions on how to do that. (And I’ve made seven mistakes in the list; can you find them all?)

1. Acknowledge: The absolute first thing to recognize is that you will make mistakes. We all do. If you go into an investment or a business or anything without recognizing that mistakes happen, you’ll be in for a big letdown. If you acknowledge that mistakes are one way we learn and improve, you’ll be better able to take you’re mistakes and turn them into opportunities.
2. Accept: I know folks who refuse to accept they’ve made a mistake. Unfortunately, I know some politicians who do the same thing. Deep down, I think its fear and pride that keeps many from accepting that they’ve made a mistake. Whether its fear of rejection, fear of failure, or just plain pride, failure to recognize when you’ve made a mistake prevents you from learning and improving. If I didn’t learn from the mistakes I’ve made investing, I’d still own high-fee load mutual funds and would have no foreign investments.
3. Accept NOT: A corollary to accepting when you’ve made a mistake is NOT accepting responsibility for other’s mistakes. As a manager, I believe one must accept responsibility for the mistakes of subordinates, but thats not what I’m talking about here. I’ve known people who seem to blame themselves for everything. Just like refusing to accept responsibility for your own mistakes will keep you from improving, so will blaming yourself for mistakes others have made.
4. Analyze: Once you accept that you’ve made a mistake, you need to analyze what happened as objectively as possible. It’s difficult to be objective. I don’t look at The Dough Roller objectively. How can I? I’ve poured countless hours into this site. But I can do my best to assess my mistakes as objectively as possible. And the same is true at work, in relationships, and with investing. Have you ever found yourself enamored with a stock pick you made, even if it turned out to be a mistake. Read this–DON’T fall in love with your investments, they don’t love you!
5. Acquire:: This is critical–we can never stop acquiring knowledge. The most horrendous mistake is the one we don’t realize we’ve made. That’s why I was so grateful when a reader pointed out that I had misspelled principal. It’s the mistakes we don’t realize we’ve made that can do the most damage. So we can never stop learning and acquiring knew information and knew skills. I’m constantly asking myself what I can learn when it comes to blogging, internet marketing and SEO. Just this week I’ve learned new skills that I believe will make me alot of money online. We shall see.

So what about my stupid principle–principal mistake? Well, that reader and I have exchanged email since then. I got one from him just the other day. Had I ignored his correction, or worse, made the change in the article without acknowledging the mistake, I may have lost a faithful reader. I would have turned one mistake into several. Now that’s a mistake worth avoiding. And speaking of mistakes, did you find the seven I made in the list?

Photo Credit: Shahram SharifFear of change can be a powerful, all-consuming force in our lives.  It can keep us from pursuing our dreams.  It can keep us in a destructive relationship.  And fear of change can cause us to make some really bad investing choices.

I had to confront my own fear of change six years ago.  At that time I was partner at a very large law firm.  I had worked eight hard years to make partner and had “enjoyed” the fruits of my labor for two years as a partner.  And then I quit.  I quit because I was tired of choosing my career over my family.  So I took a six figure pay cut and accepted a job that wasn’t nearly as prestigious.  It was one of the most frightening things I’ve ever done.  I kept asking myself–am I nuts for doing this?  I went from a corner office to a windowless office literally the size of a broom closet.  I went from being the boss to being an absolute nobody.  And it was the best career choice I ever made.

The decision taught me a lot about confronting my fears of change.  From that experience, I learned 5 steps that can help anybody overcome a debilitating fear of change.  Here they are.

Step 1:  Recognize the presence of fear in your life:  So often we are held back by fear, yet don’t even realize it.  Sometimes we rationalize why we are making a certain decision, when deep down we really know that it’s fear that is dictating our choices.  If you want to identify fear in your life, ask yourself this question–if I knew that whatever I tried to do would be a success, what choices would I make?

Step 2:  Learn to distinguish between healthy and unhealthy fear:  Not all fear is bad.  In fact, healthy fear can protect us from making really bad decisions.  I’m afraid of touching a hot stove, and for good reason!  The key is to learn to distinguish between healthy fear and unhealthy fear, which takes experience and honesty.  Experience teaches us when fear is good or bad.  And being honest with ourselves helps us apply our experiences to the new decisions and choices that we confront each day.

Step 3:  Thoroughly research and consider your choices:  Once you’ve identified a fear that’s holding you back, thorough research of your choices can help alleviate the fear.  More importantly, it increases the chances that you’ll make the right decision.  It’s worth noting here that we all make mistakes.  And some decisions must be made with less than perfect information.  But research your options as thoroughly as the circumstances will permit, and you’ll go a long way to overcoming your fear of change.

Step 4:  Assume the worst:  I had to do this when I left the law firm.  I imagined the absolute worst case scenario.  For me it was landing in a job I didn’t like, and perhaps ultimately losing my job.  While I didn’t like the thought of that, I also didn’t like the thought of not watching my children grow up or having a meaningful relationship with my wife.  That made the decision easier.  Sometimes we make things look more frightening than they really are, and imagining the worst case scenario can actually take some of the fear out of the decision.

Step 5:  Don’t second guess:  Once you’ve made a decision, never look back.  There’s no point in second guessing your decision; it won’t do any good.  You can certainly learn from your mistakes, but that’s different than second guessing.  And if you are in a position of leadership, second guessing yourself is a surefire way to becoming an ineffective leader.  Analyze your choices, make the best choice you can, and then make it work.

The same is true with important life altering money decisions. Do you homework; listen to your heart; and then make the best decision you can. That’s what building wealth is all about.