The currency risk people underestimate
For years there was almost no alternative for savings in Russia other than the dollar and euro. But they too lose purchasing power: dollar inflation since 2000 is about 47%, the euro more than 50%. Over the same period the ruble has depreciated many times over. Holding "in currency" does not mean "being protected": it is the classic, often underestimated, currency risk.
Gold: hidden costs
A popular "safe" asset actually carries liquidity and transaction-cost risk:
- Bars: VAT on purchase and bank fees; the gap between buy and sell price can reach 20–30%.
- Jewellery: even worse — on resale you lose 50–80% of the value.
Real estate: more reliable if you manage the risks
Real estate is more reliable, especially when it generates passive income. There are risks here too — falling rental demand, breakdowns, non-paying tenants — but they can be managed. A few practical, business-minded ideas:
- split an old 2–3 room flat into studios after renovation and rent them out — yield roughly 8–12% a year;
- rent out a garage as storage or a workshop — steady demand with a low entry threshold;
- rent out a cottage near the city seasonally or year-round.
The main thing — diversification
And what is often forgotten: investing in experiences, travel and education. They do not appear on a balance sheet, but they broaden your horizons and often open new opportunities. From a risk-management standpoint, the best protection against any crisis is diversification — of both assets and personal experience.
See how resilient your business really is
13 questions, 5 minutes, free — results on screen and by email.
FAQ
What is currency risk in plain language?
It is the risk that the chosen currency loses purchasing power. Even the dollar and euro depreciate over time due to inflation, so holding only in currency does not guarantee the safety of savings.
Why is gold in bars considered poor for savings?
Because of costs: VAT on purchase, bank fees and a large spread between buy and sell price (20–30%, and for jewellery up to 50–80%). This lowers real return and liquidity.
