Kenmare ND - Upside Down Under

Real People. Real Jobs. Real Adventures.

Upside Down Under

By Marvin Baker, a new weekly column in The Kenmare News


Investing in the loonie...

Posted 9/26/17 (Tue)

Back in the late ‘60s, my uncle had a fancy calendar from the Royal Bank of Canada. It was one of those that you could manually change the date and the year so it was good to infinity.

At one point I asked my parents why he had that calendar and they told me that he once did business with the Royal Bank. This was my uncle who was a World War II veteran and was wounded in the Battle of the Bulge in Belgium.

When I got older and went to college, I became more interested in what my uncle had done. About the same time, the Canadian dollar had dropped to 73 cents against the U.S. dollar or less so it was a good exchange rate. But the rate fluctuated a bit each day.

I also discovered the Bank of North Dakota was trading the loonie at 70 cents so I started using my National Guard salary to buy Canadian currency from the Bank of North Dakota at 70 cents.

My Guard check didn’t amount to much back then, but for every dollar I spent, I was getting $1.30. I just kept accumulating the currency for my next trip across the border since it was such a favorable exchange rate.

It also seemed like a hedge if I got into a financial bind which often happens with college students.

There were a number of businesses in Grand Forks, Jamestown and Bismarck that accepted the Canadian dollar so it may have been an unusual method of saving money when I really didn’t have any money. And if I needed something, I knew where I could spend it to get the best exchange rate.

I saved the loonie regularly through my college years and had accumulated a tidy sum by the time I got out of college.

It would certainly come in handy some years later when I took an editor job at the newspaper in Langdon.

Just 17 miles from the border, 38 miles from Morden, Manitoba and 110 miles from Winnipeg, I frequented Manitoba quite often. In fact, there was a period of time in 1997 when I was making two trips a week to Winnipeg, one for pleasure  and one for business.

In 1998, I did all my Christmas shopping in Winnipeg and had plenty of Canadian dollars available thus none of the money spent on holiday gifts that year came out of my U.S. paycheck.

On one of those trips I decided to stop at the Royal Bank and see what kind of interest was available on savings.

It must have been my lucky day because there was a 9.5 percent interest on CDs if you locked them in for seven years.

I couldn’t resist that and signed on, depositing money in a Winnipeg Royal Bank mostly accumulated from the Bank of North Dakota.

A point that I think is important with the Canadian dollar is that for every U.S. dollar I traded during those college years, I received in exchange $1.30 and 9.5 percent interest was now being drawn on $1.30 rather than $1 had I put it in a U.S. bank at 5.5 percent, which was the best rate I could get at the time.

Of course, this had to be reported to the IRS every year and it sometimes confused the H&R Block folks, but it’s perfectly legal and we worked through it.

And all these years later I think back to the fall of 1984 when I first enrolled in college courses. Saving money was the last thing on my mind at the time. My priorities were working at the college newspaper, getting passing grades and making the cut to play on the college baseball team.

I stumbled on to the 70-cent loonie at the Bank of North Dakota when I took some U.S. currency in to exchange for a trip I was planning to Banff National Park.

Between Edmonton, Calgary, Banff and Jasper National Park, that money was spent on leisure, but on the long trip back to North Dakota, I couldn’t stop thinking about the possibilities of that 70-cent loonie.

Part of that thinking was the only disposable income I had was from the National Guard because the rest of it was borrowed money for college necessities. So I figured out how to cut into my military salary without strapping myself.

When I moved to Langdon in 1995, one of the first people I met was Cavalier County Commissioner Neil Romfo who said something to me that backed up my unusual method of saving money.

Neil was giving me a tour around the county and was telling me that it had been pretty tough economically but there was a silver lining, at least for him. He pulled a Canadian $5 bill out of his wallet and said, “You know something, I’ll never be broke.” I made the same promise to myself 11 years earlier.