Because of the geopolitical tensions going all around the world and the US government has stopped printing more money, the USD is becoming stronger and stronger. Today, in this article, we will understand about the effective ways to fight against currency depreciation.
Basically, when the currency depreciates against US dollar, the purchasing power of the governments and citizens goes down. And as a result, the products and services we buy become more expensive since the world-trade is largely reliable on US dollar.
As a ripple effect, the inflation rate across the world has gone up significantly.
Let me explain with an example.
I am writing this article in October 2022 and currently, the price of $1 is equal to 82.6 INR (Indian Rupee).
A year ago, $1 was equal to 75 INR.
Let’s say, if you are doing an international business, you would require to buy products from the US, or any European country, you will make the payment to the supplier in the USD.
Assuming that, the amount that you have to pay the supplier is $1,000.
In 2021, when you make a payment, you paid 75,000 INR ($1,000*75). Now in 2022, you would have to make the payment of 82,600 INR ($1,000*82.6).
It has been only a year and you paid almost 8,000 INR more.
You can relate this example when you buy any software subscription and pay in US dollar.
This is the simplest way to explain why the currencies depreciate.
But the real question is,
How do we take advantage when the currency depreciates?
2 Effective Ways to Fight Against Currency Depreciation
As an individual, it becomes extremely difficult to save money when the inflation is touching new highs and the currency keeps depreciating.
The most effective way, we all can do is, start exporting your own services.
You export your services that means you sell something to outside of your country and you make money in US dollar.
For instance, if you are good at coding, you can sell your IT services by leveraging your coding skills. If you are good at web designing, or UI/UX design, video editing, photo editing, and so on, you can make money by selling your skills.
You can start by creating your profile on freelancing platforms like Fiverr and UpWork where you can make a profile and list the services that you offer.
Also, I highly recommend to use Instagram dms (direct messages), emails and LinkedIn to reach out to other freelancers and businesses. You can tell them about your services like this,
I came across your LinkedIn profile and found that you are a real estate agent and also share financial knowledge on Youtube and Instagram.
As a content creator, I have also made valuable content and you may also like it.
Feel free to checkout my LinkedIn profile and Fiverr profile as well.
If you need my help, please let me know.
This is how you can leverage platforms like Linkedin and Instagram.
I also work as a freelancer and based on my experience as a freelancer earning in USD, I am writing this article.
There is no need to spend money while doing all these things. The only thing that you must is have is Time.
It will take at least three weeks or a month to build everything from zero and start approaching people to get the first project.
Also read: Declining Population: Is it really a big issue?
2. Invest in USD
By investing in bluechip US stocks, you make sure that the investment that you are doing is safe in the long run. It will give you dividends and decent Return on Investment (ROI) as well.
However, according to the article from the Economic Times, an India rupee has been depreciating on an average 3-4% annually since 1995.
That means, if you have an investment in USD, you make 3-4% annually because of the depreciation of rupee.
If you are fully aware about currency depreciation and how it kills your purchasing power, you would easily know how it impacts the quality of your life directly. Therefore, if you have earnings in USD (doesn’t have to be a large amount. Small amount also matters), you can take full advantage of currency depreciation and make a little bit more money.