Why measure your personal net worth & savings in US dollars*
* or any other stable currency of your choice
During the last 1 year, many Asian and Arab currencies (like Egyptian pound, Pakistani rupee, Lebanese Lira, Sri Lankan rupee) have lost anywhere between 15 - 98% of their value against US dollar.
So if you're measuring your savings in any of these currencies or converting your hard-earned foreign earnings back into them, you're losing BIG time due to currency depreciation effect & erosion of real purchase value.
As an expat in the GCC region or any other part of the world, one feels a strong sense of security by earning in its foreign currency, while seeing its value increase against the home currency. Most expats send tons of money back home, especially when their home currency plummets in value, giving them the false hope of having made quick gains.
1) Convert & measure your savings / net worth in USD (or any other stable currency)
This gives you the chance to benchmark yourself against a worldwide pool of personal finance measures. It also helps protect you against most locally induced economic nightmares of your home country, where you have little to no control.
But you do control your money when it transforms into a globally recognized, stable currency form, helping you to rely on a secured asset base when the need comes calling.
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2) Reality check on a personal level
As I write this, 10 million Pakistani rupees is equal to no less than 35,000 US dollars!?
Forbes & Fortune share their billionaire listing in dollars terms, not in the billionaires' local currencies. Apart from standardization, both magazines do this to showcase the value of a person's financial worth in globally accepted terms.
World's leading countries keep their kitties / reserves in US dollars, as it has been an age old transactional benchmark of global trade.
Hints?
Monitoring your net worth in a global currency keeps you grounded on a personal level & aware of where you stand in the world's economy benchmarks
3) Protection against Economic headwinds:
Hallmarks of struggling economies include constant double digit inflation, foreign reserve gaps, balance of payments, GDP growth stagnation, among various other things. ?
Despite having no clue about these economic terms, the common man's life gets miserable with every passing day due to their trickledown effects. Keeping your nest well-protected against them becomes essential for long term asset growth & financial stability???
>> Feel free to leave your comments & suggestions in the box below
Content Specialist| Producer
1 年This is such an interesting read
Entrepreneur | Strategist | Energy Expert | Philanthropist | Social Activist
1 年Someone said it finally. I couldn't agree with you more. Many local corporate superstars have seen their balance sheets shrink in global currency despite being outperformers in PKR. As a board member I now like to see parallel version of all business plans in $. If you can't deliver a dollar-indexed ROI, you should invest in a global currency index and keep it there. Better slow down than being obliterated.
Digital Experience | Customer Experience | Customer Success | Business Development | Presales
1 年It's crucial to understand the true value of our financial assets and how they contribute to our overall financial health. While some individuals tend to focus solely on the numeric value of their savings in US dollars, it's important to consider the larger context of wealth, such as investments, property, and other assets. Great read Saadi Rauf! PS- Coudn't disagree more with the statement you began with, though. Totally defies basic economics. The only thing in excess (read unlimited) are human needs and wants. Everything else (read resources-land, labour, capital and time) are all limited. So, it was quite bold of you to start with the quote. But if eyeballs was what you wanted to catch with that hook, you surely caught mine. Great Strategy! ?? ??
Project Manager at Krank
1 年Excellent ??