How to Not Let Inflation Kill You

Couple of days ago I posted about this on Twitter and got a fair amount of response. This is a chart of USD strengthening against MYR. With inflation concerns and the Fed raising rates, this trend is expected to continue. I think we will see MYR weakness for a good part of this year due to couple of factors:

  • Ukraine war and conflict in Europe with prospect of escalation
  • USD strengthening across the board, as the Federal Reserve turns hawkish
  • China struggling to contain Covid-19 outbreak, with massive gridlock in global shipping & supply chain

If you’re living and working in Malaysia, it’s hard not to feel discouraged. How to position yourself against this?

Hedge against weakness

Buy USD and save at above average returns. DeFi presents many opportunities for you to get higher than FD returns. Rates above 10% is not hard to find. The best bet is using Anchor Protocol where you can earn a whopping 20% annually using UST.

  • Upside: protect your net worth against depreciating ringgit
  • Downside: Foreign exchange risk, smart contract risk

Increase Earning Power

Learn a skill where u can earn USD as a freelancer. It’s not impossible to work from home and earn in a foreign currency. For example, skills that are always highly sought after include copywriting, video editing, digital marketing and UI/UX. With the advent of Web 3, many startups and new companies are hiring. Talent couldn’t flow into the space quickly enough. As remote work becomes ubiquitous, expect opportunities to exist outside of your comfort zone.

  • Upside: earn more in a stronger foreign currency (USD preferred)
  • Downside: odd hours, must have grit to push through

A Strong Defense is a Good Offence

Decrease expenses, save and invest the difference. Every little bit counts. Consider storing 5 – 10% of your net worth in hard assets such as Bitcoin and Ethereum. You don’t need fancy portfolio sizing knowledge, a barbell strategy works just as fine.

  • Upside: fight inflation, with potential for outsized performance
  • Downside: volatility and long time frame. Be prepared to HODL for years.

The World is Your Oyster

Learn to be a little bit better everyday. 1% improvement daily compounds over a year. You’ll be a different person in a year if you start today.

Stay mediocre and complaint.

Or be better and rise above the crowd.

The choice is in your hands.

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