Aug 10 2022, 12:13 PM
QUOTE(Ramjade @ Aug 8 2022, 07:42 PM)
I will tell you what my teacher Hansel told me years ago. Don't hold Malaysian currency. It's a useless currency that depreciate yearly.
When a currency depreciate, you are losing purchasing power over time.
The only way to guard yourself from currency depreciation and loss in purchasing power is hold and earn foreign currency which are stronger than RM.
Preventing loss in purchasing power is a strategy to grow your wealth over time. Up to you to think how are you going to earn foreign currency. Lots of way to skin a cat. Choose the one which you are comfortable. Of course holding FD in Malaysia currency is certainly not the way to go.
And still got heck ton of KWSP fanatics on Lowyat maxing out their contribution every year.When a currency depreciate, you are losing purchasing power over time.
The only way to guard yourself from currency depreciation and loss in purchasing power is hold and earn foreign currency which are stronger than RM.
Preventing loss in purchasing power is a strategy to grow your wealth over time. Up to you to think how are you going to earn foreign currency. Lots of way to skin a cat. Choose the one which you are comfortable. Of course holding FD in Malaysia currency is certainly not the way to go.
KWSP portfolio value is not free floating, it's almost like a fixed deposit denominated in MYR. When MYR drops, you lose purchasing power, and you don't get the extra profits from exporting companies; when MYR rises, you can't lock in the profit and diversify into other currencies and assets before you retire.
I don't think MYR necessarily depreciates against other currencies, but ppl here are seriously thinking in MYR and not in actual purchasing power. It's extremely short sighted way to manage personal wealth.
This post has been edited by honsiong: Aug 10 2022, 12:16 PM
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