The currency risk people underestimate
For many years in Russia there was almost no alternative for savings other than the dollar and the euro. But they also lose purchasing power: dollar inflation since 2000 has been about 47%, euro inflation more than 50%. Over the same period, the rouble lost value dozens of times over. Keeping savings “in currency” does not mean being “protected”. This is classic currency risk, and it is often underestimated.
Gold: hidden costs
This popular “safe-haven” asset in fact carries liquidity risk and the risk of transaction costs:
- Bullion: VAT on purchase and bank fees; the gap between the buying and selling price can reach 20–30%.
- Jewellery: even worse, as 50–80% of the value is lost on resale.
Real estate: more reliable if you manage the risks
Real estate is more reliable, especially if it generates passive income. It has risks too: falling rental demand, breakdowns, tenants who do not pay. But these risks can be managed. A few practical ideas with a business approach:
- renovate an old 2–3-room flat, divide it into studios and rent them out, for an indicative yield of 8–12% a year;
- rent out a garage as storage or a workshop: stable demand and a low entry threshold;
- rent out a country cottage near the city seasonally or all year round.
The key is diversification
And something people often forget: investing in experiences, travel and learning. These do not appear on a balance sheet, but they broaden your horizons and often open up new opportunities. From a risk management point of view, the best protection against any crisis is diversification, of both assets and personal experience.
Frequently asked questions
What is currency risk, in plain language?
It is the risk that the currency you chose loses purchasing power. Even the dollar and the euro lose value over time because of inflation, so keeping savings only in foreign currency does not guarantee they are safe.
Why is gold bullion considered a poor way to save?
Because of the costs: VAT on purchase, bank fees and a large spread between the buying and selling price (20–30%, and up to 50–80% for jewellery). This reduces real returns and liquidity.
From the risk register to management decisions
Check whether your risks reach the people who make decisions. The dashboard shows the status on one screen; the turnkey system makes it work in practice.
