By Ify Aronu-Okafor
Recently, I made a post on Facebook encouraging my followers to share “one lesson 2023 taught them” and one of the things I mentioned personally was “If you must save money, save in dollars (USD or USDT)”.
Many indicated interest to understand how that works. In this article, I will do my best to explain it as simply as possible.
YOU CAN DO IT YOURSELF: Saving in dollars isn’t rocket science and you don’t really need to inform people about your plans to avoid losing your precious money in these times. Decide that you are going to handle the process and keep it as private as possible. If you must tell anyone, it must be one you really trust.
FOLLOW THE EXCHANGE RATE: Before you begin, you need to start paying attention to the dollar to naira exchange rate. There was a time when it was N150 to 1 dollar, N250 to a dollar and it kept increasing till now that it’s over N1,000 to a dollar. Imagine, if you had started saving only N10,000 yearly in dollars back then, by now it would have appreciated so well.
HOW TO SAVE IN USD (DOLLARS): Decide how much you want to save, any amount. You may decide to take the naira equivalent to trusted currency dealers (usually hausas’) you’ll find them in most major markets. Be very careful while doing this. They’ll simply give you the dollar equivalent of the naira you have. For instance, if you decide to save N11,000 now, you’ll get about 10 dollars. Someone asked if it is possible to save 50K in dollars, now you know that you can save any amount, right?
CHALLENGES: For most people, buying dollars isn’t an issue, rather hiding the dollars safely for years is usually the challenge. Another concern is consistency, making the decision to buy and save dollars at intervals on a continuous basis. Once you can troubleshoot these challenges, you are on your way to accumulating dollars over time.
***Notice that I didn’t mention saving your dollars in domiciliary accounts because of government policies that change like the weather. Sometimes when there’s high dollar demand, you may be unable to withdraw your dollars from your domiciliary account. Saving dollars in the bank might work if you just want to save on a very long term.
HOW TO SAVE IN USDT: If you are worried about safe keeping of your physical dollars, you might want to consider buying dollars in cryptocurrency called USDT. It’s the same thing as dollars but it’s cryptocurrency and gets saved on your digital wallet on Trustwallet. You can also buy and save USDT on exchanges like Binance, Kucoin etc. To do this effectively and safely requires some crypto education.
CAN YOU START SAVING IN DOLLARS NOW? This is the big question that everyone’s asking. I don’t know if buying dollars now is timely because of the present exchange rate of over N1,000 to a dollar. You may want to take this as a long term lesson in case things go back to normal and the exchange rate normalises somewhat. It’s better to buy and hold dollars when the naira is a bit stable then forget about the money for years.
But someone asked me recently, “what if this trend continues and we witness N2,000 to a dollar, even the person who buys at N1,000 to a dollar will be in massive profit. My response was, “that’s true but the person should be ready incase it goes the other way round say N500 to a dollar. It can go either way, you never know.
Caveat: This is not a professional financial advise. It is based on my personal observation and convictions.