We have spoken about what Asset Protection is, also about diversification and about new topics such as negative interest rates. In this article I would like to take another look from a bird perspective on our wealth. Which currency we will find as a mature or maybe as the one in it? Probably that one in which country you will live.
It does not matter how your wealth is allocated, it will only matter in which currency is that Asset held or in which currency your return on your investment will be paid. For example an investment funds, most of them which are found in clients portfolio are the once in Euro. Real estates are bought in Euro, sold in Euro, rents are paid in Euro and all other modernisations will be paid in Euro. Of course this picture is quite simple, but let me ask you. Do you have a currency account? Or did you ever thought to sell your real estate with the intention to get paid in British Pounds?
The chances are good that your answer is no.
To have a mature part of your assets in the currency in which you are paying your bills are understandable. Anyway the world is growing together, in this it is an easy to buy goods from USA, to make some studies in another country or to travel in countries which we could not imagine a couple of years ago. So we are living in a more and more globalised world, but our assets stay national focused.
Under the aspects of asset protection the question could go more likely in the way, what would be if we have a change in the currency, high rising inflation, other forms of value loses in the currency or simply other countries are growing faster the yours. Maybe also political issues. Then we will have fast a falling currency, take a look to Russia, Turkey, USA or United Kingdom.
I am with you that any currency change will not affect you in short but if this holds on over some months or years, then we will feel that change in our daily prices.
At this point we come around the circle from the currencies and asset protection. The protection of your assets mean we have to evaluate from where any danger is coming. Then we have to look which one of them are so serious that you want to protect yourself against them. You see asset protection is all about danger and which one of them you see as so serious to protect yourself against them.
I think you will agree with me a diversification also into different currencies are for everyone an add-on in their asset allocation.
In the following part of this article we will take a look into the forms of how you can do that.
It does not matter how your wealth is allocated, it will only matter in which currency is that Asset held or in which currency your return on your investment will be paid. For example an investment funds, most of them which are found in clients portfolio are the once in Euro. Real estates are bought in Euro, sold in Euro, rents are paid in Euro and all other modernisations will be paid in Euro. Of course this picture is quite simple, but let me ask you. Do you have a currency account? Or did you ever thought to sell your real estate with the intention to get paid in British Pounds?
The chances are good that your answer is no.
To have a mature part of your assets in the currency in which you are paying your bills are understandable. Anyway the world is growing together, in this it is an easy to buy goods from USA, to make some studies in another country or to travel in countries which we could not imagine a couple of years ago. So we are living in a more and more globalised world, but our assets stay national focused.
Under the aspects of asset protection the question could go more likely in the way, what would be if we have a change in the currency, high rising inflation, other forms of value loses in the currency or simply other countries are growing faster the yours. Maybe also political issues. Then we will have fast a falling currency, take a look to Russia, Turkey, USA or United Kingdom.
I am with you that any currency change will not affect you in short but if this holds on over some months or years, then we will feel that change in our daily prices.
At this point we come around the circle from the currencies and asset protection. The protection of your assets mean we have to evaluate from where any danger is coming. Then we have to look which one of them are so serious that you want to protect yourself against them. You see asset protection is all about danger and which one of them you see as so serious to protect yourself against them.
I think you will agree with me a diversification also into different currencies are for everyone an add-on in their asset allocation.
In the following part of this article we will take a look into the forms of how you can do that.
