Back in the late 19th century and early 20th century, the US dollar suffered from a devaluation that is similar in impact to what the Egyptian Pound is going through today.
It looks like the world’s strongest currency had its down moments too. The purchasing power of the US Dollar had significantly dropped, let alone its weakness compared to other strong currencies at the time.
“Rockefeller’s advice stands true 100 years later.” Forbes Magazine
We cannot claim that what applied back then should apply directly to Egypt today, but it is safe to say that it will help. Forbes Magazine asked John David Rockefeller for help.
The Rockefeller family is an American industrial, political, and banking family that made one of the world’s largest fortunes in the oil business during the late 19th and early 20th centuries, with John D. Rockefeller and his brother William Rockefeller. The German-origin family is also known for its long association with and control of Chase Manhattan Bank (now part of JPMorgan Chase). They are considered to be one of the most powerful families, if not the most powerful family, in the history of the United States.
“The most important thing for a young man starting life is to establish a credit – a reputation, character. He must inspire the complete confidence of others,” this is what John D. Rockeffeller told Forbes magazine in an article dating back to 1917 which they shared on Snapchat last week commenting that his advice stands true 100 years later.
Rockefeller gives a controversial yet golden advice, “SAVE NOW!” He simply advised people not to buy any goods because with the high inflation, goods are at their highest prices and will relatively cost people more than ever. If one would wait, one could buy more and more with the same one dollar.
One hundred years later, does this apply to Egypt today? Should we save and wait for prices to eventually go down? In theory, every year prices will increase.
So if I buy an item for EGP 100 today,
Its price will be around EGP 130 next year (inflation is around 30%).
My money would increase by about 20% (highest bank interest rate).
So this means the item’s relative price increased by only 10%.
The currency & purchasing power are at their lowest levels now,
Meaning they have only one way forward: upward.
Meaning the value of the EGP and what you can buy with EGP 120 will increase.
Or inflation will decrease, even if prices increase.
So if I saved money, instead of buying expensive goods, chances are I will increase my wealth by doing so, according to Rockefeller.
If we would add anything to Rockefeller’s advice, it would be to Invest, not just to Save.
This would apply very well to the US economy because it had a solid foundation to stand on back then, even during its darkest moments, however, the Egyptian economy is at a much riskier situation. So if we would add anything to Rockefeller’s advice, it would be to Invest, not just to Save.
Rockefeller realized very well what made the American economy great even during its darkest moments: business. He never missed a chance to share a business advice. In fact, here is what he called Forbes called Success Essentials.