After our recent trip to Turkey I thought I would write a note on travelling with South African Rands. People say, “just don’t convert” but it is human nature to compare and the cost of travelling in more developed countries tends to be a bit depressing. I thought Turkey would be cheaper than it was, but it turns out that anything vaguely associated with tourism is priced in Euro’s!
In an ever-evolving global economy, financial decisions carry substantial weight. One crucial aspect of personal finance is the choice of currency in which to save money. While South African rands may seem like a natural choice for those residing in South Africa, the benefits of saving in hard currency cannot be overlooked.
The South African rand is subject to volatility due to various domestic and international factors. Economic uncertainties, political instability, and general perception of the country can lead to fluctuations in the value of the rand. Such fluctuations can erode the purchasing power of savings over time, affecting both short-term and long-term financial goals.
In contrast, hard currencies, often backed by stable and robust economies, (despite some interesting choices in leadership) tend to exhibit lower volatility. Currencies like the US dollar, euro, or Swiss franc are frequently sought as safe-haven assets during times of economic turbulence, making them a more reliable choice for preserving and growing savings.
Furthermore, hard currencies facilitate international travel and transactions. When saving in rands, fluctuations in the currency exchange rate can impact the cost of traveling abroad or purchasing imported goods. Hard currencies eliminate or minimize these exchange rate uncertainties, granting savers more control over their financial activities on a global scale.
For those with aspirations of financial stability and retirement planning, saving in hard currency offers a more solid foundation. The ability to preserve and potentially grow savings in a stable currency reduces the risk of unexpected financial setbacks caused by currency devaluation or economic turmoil. This stability becomes particularly crucial during retirement when the focus shifts from active income generation to relying on accumulated savings.
While saving in South African rands may seem like a patriotic choice, it’s essential to consider the practical implications for long-term financial security. The benefits of saving in hard currency—reduced currency volatility, inflation protection, broader investment opportunities, and global accessibility—far outweigh the short-term comfort of sticking solely to the national currency. To maximize spending power, safeguard wealth, and embrace a more secure financial future, considering the merits of hard currency savings is a step worth taking.
The hard truth about our soft currency
After our recent trip to Turkey I thought I would write a note on travelling with South African Rands. People say, “just don’t convert” but it is human nature to compare and the cost of travelling in more developed countries tends to be a bit depressing. I thought Turkey would be cheaper than it was, but it turns out that anything vaguely associated with tourism is priced in Euro’s!
In an ever-evolving global economy, financial decisions carry substantial weight. One crucial aspect of personal finance is the choice of currency in which to save money. While South African rands may seem like a natural choice for those residing in South Africa, the benefits of saving in hard currency cannot be overlooked.
The South African rand is subject to volatility due to various domestic and international factors. Economic uncertainties, political instability, and general perception of the country can lead to fluctuations in the value of the rand. Such fluctuations can erode the purchasing power of savings over time, affecting both short-term and long-term financial goals.
In contrast, hard currencies, often backed by stable and robust economies, (despite some interesting choices in leadership) tend to exhibit lower volatility. Currencies like the US dollar, euro, or Swiss franc are frequently sought as safe-haven assets during times of economic turbulence, making them a more reliable choice for preserving and growing savings.
Furthermore, hard currencies facilitate international travel and transactions. When saving in rands, fluctuations in the currency exchange rate can impact the cost of traveling abroad or purchasing imported goods. Hard currencies eliminate or minimize these exchange rate uncertainties, granting savers more control over their financial activities on a global scale.
For those with aspirations of financial stability and retirement planning, saving in hard currency offers a more solid foundation. The ability to preserve and potentially grow savings in a stable currency reduces the risk of unexpected financial setbacks caused by currency devaluation or economic turmoil. This stability becomes particularly crucial during retirement when the focus shifts from active income generation to relying on accumulated savings.
While saving in South African rands may seem like a patriotic choice, it’s essential to consider the practical implications for long-term financial security. The benefits of saving in hard currency—reduced currency volatility, inflation protection, broader investment opportunities, and global accessibility—far outweigh the short-term comfort of sticking solely to the national currency. To maximize spending power, safeguard wealth, and embrace a more secure financial future, considering the merits of hard currency savings is a step worth taking.
Asset Class Returns
The table below represents a rolling year view of the major asset class returns that we track. It offers a view of the asset classes we use to diversify your portfolio.