fbpx

How to Take Care of Savings in Hyperinflation?

Several countries in Latin America are entering cycles where the national currency depreciates. These are the best tips to take care of savings in hyperinflation.

Woman with pink pig and a coin

Photo: Unsplash

LatinAmerican Post | Santiago Gómez Hernández

A few years ago, the world saw how Venezuela registered hyperinflationary levels never seen before. Up to 1370% in just one year showed how in a few months, with what was bought a house, then only a loaf of bread was bought.

However, and under other parameters, we have seen how several countries in Latin America are suffering from the depreciation of their currencies. And although this does not mean that it reaches the levels seen during Chavismo, it does end up being a phenomenon that affects people's pockets. This is why you have to seek advice to take care of savings in hyperinflation.

You may also be interested in: The most devalued currencies in Latin America in 2021

Buy real estate

A good possibility is to buy something root that serves you for 3 things: take care of your assets, generate profits, and generate income. Now, there are 2 opportunities, between buying an apartment, local, house, or lot in the country and waiting for inflation to stop and then being able to sell or buy real estate abroad and thus have an income in foreign currency and be protected in a market more robust.

However, it is also important to note that when you have real estate, taxes may also increase considerably.

Also read: Interview: Tips for investing in real estate in the United States

Buy shares

Another possibility is to be able to start moving in the stock market. Buying shares of financially stable companies will help to have relatively protected money. Many times this can also generate dividends, although taxes will still be paid when selling them.

Buy foreign currency

An alternative that is already widely used in Argentina and Venezuela is to buy dollars or euros or open bank accounts abroad with hard currency. However, this directly causes inflation in the country to increase and for this reason, local governments will try to put restrictions on the purchase of foreign currency.

Buy gold

Another good opportunity is to buy a precious metal such as gold. It has great benefits, for example, its ability to sell anywhere in the world, which makes it easy to become cash when needed.

The problem is that you must have a physical place to take care of it and prevent it from being lost or stolen. Likewise, you should also keep in mind that this saving will not generate any type of dividend, as it could be a share.

Buy cryptocurrency

Today there has been a lot of talk about cryptocurrencies, especially Bitcoin, as a speculative and risky market. However, if the national economy is in crisis, it may even be a better option than a bank. It is much riskier, but through good investments and constant vigilance, it can be an alternative.

Diversify

Likewise, no matter how you prefer to protect your money and your investments, a great tip from all investors is to diversify your wealth. Do not put all the eggs in one basket, in case it falls. When investing or buying stocks, you look to invest in various companies, but also in various industries.

For example, buying shares of Petrobras, Ecopetrol and Pemex will protect you when any of these enter into crisis. But if it is the oil industry and the price of a barrel falls, all your savings will go the same way. So it would be important to have invested in Microsoft, Tesla, Disney, etc.

Join with close ones

The question you are surely asking yourself is: if I do not have enough savings to buy real estate or to buy a Bitcoin, what alternative do I have? Well, you can join in partnership with people you know so that you can invest together and make larger investments. Instead of buying a monospace in Aguascalientes, or a house in Valparaiso, you can pay 20% for an apartment in Miami. The rest you invest with close and trustworthy people. This will allow you to have assets in stronger economies.

Save a little

Now, if you think you have no options to invest, there is also the possibility of buying today what you will need later. For example, if you know that your PC, your Car, or Cell Phone are old, you can already buy spare parts that you will need to buy or even buy a new device. If you want to carry out a study, try to pay it in advance or as much as possible, since later the program may become more expensive.