What is your store of value?

in #hive-1679222 years ago

Reserva de valor 1.jpg

Source by Pixabay

A hard-working saver who takes a long-term view of resources needs a guarantee that their saved resources are not worth less and less so that the goals they set for themselves over the long term will be successful. These goals can vary from personal projects, vacations or leaving a legacy to your children. It is in this case that the question I pose in the title of my post comes into play.

A store of value is an asset that keeps its price as stable as possible avoiding devaluations or large fluctuations over time. These assets are used to protect wealth or investments in times of crisis, instability or when inflation rises. In this era of change it is imperative to select a store of value that meets our needs so that we will ultimately succeed in our objectives and not incur large losses and disappointments.

I will illustrate with an example how important it is to properly select a store of value. About 22 years ago a couple of grandparents wanted to secure the future of their beloved grandson. He was their only grandchild. When things in Venezuela became dangerous for any investor they decided to leave for their home country but not before leaving the sum of $30,000 in a bank as a trust to be managed by their grandson once he came of age. That would happen only 13 years later. The problem is that by that time in a Venezuelan bank there was a strict exchange control in which a natural person could only deposit bolivars, so that's what they did.

At that time 30 thousand dollars was 20,100,000 Bs. We are talking about eight figures which was a small fortune at that time. It was the year 2000. From then on, both the economy and the stability in the country collapsed and after two large devaluations, by the year 2013, when the heir was expected to have access to the resources, the trust was valued at only 10,000 Bs and nowadays those 20 million bolivars from the beginning are only 5 dollars approximately.

A good reserve of value would prevent these grandparents from suffering this enormous loss and be able to give their grandchild what they wanted so much.

***reserva de valor 2.jpg

Source by Pixabay

Having established the importance of the store of value of the assets we own, it is now time to decide what is the safest way to safeguard the economic resources. For many years poor nations have taken refuge in stronger currencies such as the euro or the dollar, there are those who invest in real estate and works of art, which are the least liquid assets, others in gold and finally there is a group that trusts in Bitcoin as a store of value.

Everyone should decide how they want to safeguard their assets, but it is important that we think about this issue especially if we want to save for the future. Everyone's opinion varies, but what we all agree on is that we do not want our resources to be worth less and less, but rather to appreciate in value and take the least possible risk. The risk-benefit ratio plays a key role when deciding.

If we say well, it is likely that after these times of return crisis and downturns in the markets we will be very well positioned and with a stable capital ready to use it to achieve our goals.

Reserva de valor 3.jpg

Source by Pixabay

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