By Liz Anoushka
Opportunities for work, business, savings and investments are easily accessible to almost anyone anywhere in the world. Local currencies are favoured at home yet foreign currencies remain invasive and dorminant. For someone who barely travels nor does transanctions in a foreign currency, the topic of currencies may appear insignificant but it’s not.
When almost every young person dreams of becoming the world’s next Mark Zuckerberg, it makes sense that the financial goals of our future billionaires and millionaires are estimated in a currency that’s used across the world. Comparing one’s bank balance in shillings to a billionaire’s networth in dollars, pounds or euros doesn’t paint an accurate picture. The problem with local, unpopular currencies is the illusion of value they offer. Take the UGX and KSH for instance, 1 million UGX is worth less when converted to KSH. You seem to have a lot of money or feel rich with UGX because of the so many zeroes only to feel broke once that cash is converted to KSH. The feeling is worse should you further convert this to dollars or pounds.
If your goals are to favourably compete beyond your national borders, then having at least two accounts is strategic. One account can be in the local currency as any local expenditures or investments will be cheaper this way. The other account should be in a foreign currency. Bank charges for foreign currency accounts may seem high at first but you should be just fine if this is a savings account you rarely withdraw money from or if you keep the transactions strictly in the said currency to minimise on how much you lose in conversions.
Also, while your initial bank balance will appear much lesser, you will be happier to know that it holds more worth than the illusion of endless zeroes in a local currency.
When Travelling or Trading
Wondering what more a foreign currency account can do for you? Online and digital payments are a favourite everywhere and we don’t realise how much we lose each time a card is swiped for a purchase in a foreign currency. If you transact a lot in dollars, then a dollar account would help you pay only for what you are buying without losing any extra money in conversion.
Choosing a Currency
You need to be confident about your preferred currency and researching on it would be rewarding. Certain currencies are more stable than others regardless of inflation and other factors. Some currencies while stronger are not as popular and may therefore not be very practical should your business dealings or other interests occur in economies that favour a less stronger currency. It’s your money and your choice to make. A little research would make the decision easier for you.
Next time when considering a new savings goal, perhaps you could try setting the goal in a more stable, stronger and popular currency. This way a goal of becoming a millionaire in UGX by 2025 could change to a more valuable alternative of becoming a millionaire in USD or GBP by 2025. The local currency goal would flatter you but the foreign currency goal will paint a more realistic picture for you.
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