Protecting yourself from a weakening currency

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DrewChan

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I am a financial layman,

I occasionally fear the value of our currency may weaken to such an extent that it collapses and we are all left in poverty.

How could one protect there income (in terms of investment) in order to ensure that should this happen you are not left stone broke.

What are the chances of the above happening?
 
I recall the Russians started buying fixed assets like crazy when the sanctions kicked in and the ruble took a tumble, problem is most of them depreciate faster then their currency :p

If you want to preserve the value of your currency gold is a good option as far as I know, the analogy of 1 kruger Rand would buy you a well tailored suit in 1910 and in 2010, and 10 kruger Rands would buy you a basic car in 1910 and in 2010

But that's just from basic observations and opinions I've come across :)
 
What I have started doing is saving my money in a foreign currency (GBP) - the Pound is pretty strong and much stronger than the Rand will ever be. So I know my money will either increase in value (In Rands) or remain the same as when I deposited the money into the account. Of course I do have a bigger plan in life and that is to leave SA one day; so the savings in my UK account will help with that move.
 
Tander said:
What I have started doing is saving my money in a foreign currency (GBP) - the Pound is pretty strong and much stronger than the Rand will ever be. So I know my money will either increase in value (In Rands) or remain the same as when I deposited the money into the account. Of course I do have a bigger plan in life and that is to leave SA one day; so the savings in my UK account will help with that move.
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Very few people have access to open overseas bank accounts. I see you are listed as being from the UK? That makes thing easier.
 
Freaksta said:
Very few people have access to open overseas bank accounts. I see you are listed as being from the UK? That makes thing easier.
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No, not from the UK. I am currently here though. Granted, yes, easier to get an account while you're here.

For those of you who can't open a overseas account easily, there is another option. A site I have used in the past and has the same benefits really, just with less interest and slightly more fees. Take a look at: https://www.neteller.com/en
They allow you to transfer money into an account in the currency of your choice. You can also withdraw it to a registered bank account and also get a card for in store and online purchases.
 
Freaksta said:
Very few people have access to open overseas bank accounts. I see you are listed as being from the UK? That makes thing easier.
Click to expand...

I opened an overseas bank account with Barclays. It was 30 min paperwork and I had my account opened in a few days, and there was no minimum deposit requirement. The only hassle is when you start sending out more than R1bar/year - then you require tax clearance and it gets more complicated.
 
JayM said:
I opened an overseas bank account with Barclays. It was 30 min paperwork and I had my account opened in a few days, and there was no minimum deposit requirement. The only hassle is when you start sending out more than R1bar/year - then you require tax clearance and it gets more complicated.
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So I assume you too stash your money in a overseas account? How has it worked out for you so far? (I will be using mine properly when I get back into SA)

Also what about the fees to send the money out to begin with; how do you minimize them ?
 
Tander said:
So I assume you too stash your money in a overseas account? How has it worked out for you so far? (I will be using mine properly when I get back into SA)

Also what about the fees to send the money out to begin with; how do you minimize them ?
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I got a substantial amount out at GBP1=ZAR18.3 so I'm happy so far. The interest on the account is piss poor though.

Exchange4Free has no fees at all and gives good rates so long as you transfer at least R100k at a time.
 
DrewChan said:
I am a financial layman
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Well you should understand that you're adding risk exposure here. In the sense that previously the investment either went in your favour or against you. Cross border you're now exposed to be risk on the investment *and* the exchange rate. So you could have both of them move against you (or in your favour).

As JayM said, expect near zero interest on the overseas accounts.

Opening a foreign denominated trading account will be easier than bank account. Just make sure they accept Swift transfers else you can't pay into it.

I wouldn't do gold tbh. Don't like the way that market behaves personally.
 
You can open an investment or normal bank account in another country. You are allowed to move R1m per year for any reason (Single Discretionary Allowance) and up to R10m for investing overseas (but you need to get a tax clearance certificate in this case - quite easy to get if you don't have tax issues).

I also believe the ZAR will only weaken in the long run. ;)
 
JayM said:
I opened an overseas bank account with Barclays. It was 30 min paperwork and I had my account opened in a few days, and there was no minimum deposit requirement. The only hassle is when you start sending out more than R1bar/year - then you require tax clearance and it gets more complicated.
Click to expand...

Care to elaborate a bit more? Can you link us to the product that you are using with them?
 
Tander said:
What I have started doing is saving my money in a foreign currency (GBP) - the Pound is pretty strong and much stronger than the Rand will ever be. So I know my money will either increase in value (In Rands) or remain the same as when I deposited the money into the account. Of course I do have a bigger plan in life and that is to leave SA one day; so the savings in my UK account will help with that move.
Click to expand...

Started moving of my money to GBP also.

Was quite easy with a fnb global acccount.
 
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