Inflation is the silent killer of third world savings. It does not make a sound. It just eats your money year after year until that comfortable nest egg is worth bus fare (and I do not mean a nice bus).
In Ethiopia, official inflation is around 20-30%. Have 100,000 birr in a savings account earning 7% interest? Congratulations, you are losing 13-23% of your buying power every single year. Your bank balance goes up. Your actual wealth goes down. This is the math they do not teach you in school.(what do they even teach us in school man, can’t say shi honestly was probably smoking weed in the toilet or fighting with other school gangs, mom if your reading this I am sorry, plus you was there to all the time lol)
What to do about it:
-
Get your money out of local currency. Convert some to USD, EUR, or GBP. Cash or a foreign currency account. The local currency will always lose value because the government prints more when it runs out of money (and governments always fucking run out of money, for some reason lol).
-
Buy gold. Physical gold holds value across decades, across regimes, across economic collapses. Small bars or coins. Hide them. Tell no one. Gold works anywhere in the world.( I once saw a person close to me sell the gold they bought 15 years ago for 200x the price, wow)
-
Real estate is the best long-term bet. Land does not inflate away. In Addis, land prices keep going up even when everything else is crashing. If you can buy land, buy the goddamn land. (until they take it away for Limat (renovation))
-
Do not buy crap and call it an investment. That new iPhone is not an investment. That car is not an investment. They lose value the second you buy them. Inflation hedges hold or increase value. They are boring. They work.
The rule: If you have savings in local currency that you will not touch for 6 months, you are losing money. Convert it. Invest it. Put it in something that does not depend on the government’s ability to manage money (spoiler: they cannot).
Coming soon: The Foreign Currency Question