May 192016
 

Triple Digit Returns on Currency Investment

There are lots of waysĀ to make money in the world. It’s up to us investors to find them. šŸ˜‰ A couple of years ago I blogged about my investment in Zimbabwean dollars. I purchasedĀ someĀ uncirculatedĀ $100 trillion Zimbabwean banknotesĀ on the internet and paidĀ CAD $5Ā for each one. šŸ™‚

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Back then I even made a predictionĀ that these notes would be worth $25 each in 2016. Boy was I wrong, lol. It’s now been about 3 years since I purchased myĀ investment. Here are some recentĀ ones that actually sold on eBay within the last day!

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Holy mackerel! šŸ˜€ Each of my Zimbabwean banknotes isĀ worth over CAD $60 today. That’s at leastĀ 1,200% return on investment in just 3 short years. Financial independence – here I come! šŸ˜€ If the people whoĀ read my previous blog post purchased 15 or 20Ā of these notes, then they could sell their investments today and be thousandaires! šŸ™‚

Due to runaway hyperinflation what you can buy for a Zimbabwean dollar these days is absolute non-cents. Around the year 2000 the government enacted a policy to redistribute land and resources. Foreign capital stopped flowing into the country. As a result the Reserve Bank of Zimbabwe printed huge amounts of money to pay for labor and services. TheĀ value of the Zimbabwean dollar dropped due to an oversupply of currency and prices began to rise. By 2008 prices of food and other goods were literally doubling every 24 hours! At its highest point the annual inflation rate was 230,000,000%. Savers were wiped out. And businesses didn’t know how much to pay their employees or charge customers because there was no price stability, including for labor. All this turmoil caused the country’s GDP to fall 18% inĀ 2008. By 2011, aboutĀ 72% of the country’s population lived below the poverty line.Ā If theĀ first president of Zimbabwe, President Banana, was still alive today, he would probably be very upset by all damage his successors have done to theĀ nation’s economy.Ā (yes, that’s his real name)

The Zimbabwe currency was abandoned by most people in 2009. Since then the country hasĀ stopped printing the currency, andĀ consumersĀ have been using the U.S. dollar and the South African Rand to conduct financial transactions. Last year the government decommissioned the Zimbabwean dollar completely and anyone who still had some could exchange it forĀ American dollarsĀ at the official exchange rate set by the government: $1 USD = $35,000,000,000,000,000 ZWD, lol.

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Jan 072014
 

Last year I wrote a post about how toĀ invest in foreign currencies and how I personally bought a lot of U.S. dollars and ChineseĀ Yuan. Luckily those decisions are already paying off šŸ™‚ $USD gained against $CAD in 2013, and the Yuan is now trading higher than when I bought it. Don’t worry if you didn’t pull the trigger last year because today I will tell you about another investment opportunity in the currency markets. It is the Zimbabwean dollar šŸ˜€

14-01-cheapmoneyzwdA long time reader recently asked me about it, so I thought I’d share my views. Initially the Zimbabwean dollar was worth more than the U.S. dollar atĀ 1 ZWD = 1.47 USDĀ in 1980.Ā But the $ZWD quickly began to lose its value. Inflation rose to 32% annually by 1998. Hyperinflation was out of control by 2008 at 11,200,000% annually, Ay Caramba! šŸ˜Æ Finally in 2009 the Zimbabwean dollar was suspended indefinitely. Today, the country officially uses $USD, ā‚¬EUR, Ā£GBP,Ā and the South African rand as acceptable currencies.

I bought some $100 trillion Zimbabwe banknotes on eBay in 2012 for only $4 CDN each!Ā But since Zimbabwe banknotes are no longer being printed, finding them is becoming difficult as the currency becomes more rare which ironically is sending its value back up due to shortage.Ā I bought more in June 2013 at approximately $5 each, including shipping. A few months later in October Anne from Unique Gifter mentioned these $100 trillion notes were selling for $6 each.Ā Finally I checked once more earlier this year, 2014, and the cheapest ones I found were selling at $9 each. Goodness gracious. Look at that trend!Ā I’m making a higher return (percentage wise) from these Zimbabwean dollars than from the stock market! I predict these same notes will be worth $25 each in a couple more years šŸ˜€ Financial independence, here I come! Below is aĀ picture of some $ZWD banknotes I purchased last year.

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Jun 222013
 

Guess what I found on Ebay. Money! But not just any money. It’s a 1923 one dollar bill.Ā Spent $30 but I think it’s well worth it Ā (悜āˆ€ć‚œ) I scanned both sides of it below right. Click to enlarge.

13_06_1923banknote1dollarThe face value is a dollar, meaning worth the same as a loonie if I decide to spend it. But back in the 1920’s $1 could actually buy approximately $13 worth of stuff in today’s dollars.Ā Interesting to see the effects of inflation over many decades.Ā  The market price of this banknote today is $38 according to one banknote pricing guide online. Since its value appreciates faster than inflation, this banknote isĀ sort of a long term investment in a way šŸ˜€ Returns aren’t great but at least it’s tax free.

This is by far the oldest thing I now own lol. People over the years have exchanged this particular piece of paper for food, services, and other goods. It’s still in fine condition but the fact that it’s been well circulated gives it character šŸ˜€ During the economic boom known as the roaring 20s it could have been used to start a million dollar business. During the great depression when the unemployment rate was over 20% perhaps this dollar was used to buy food for a starving family so they could have something to eat that day. Who knows how many countless hands have touched this banknote, maybe even someone famous. It’s probably traveled around the whole country, and now it’s with me šŸ™‚

The 1923 banknotes were eventually replaced by a new design in 1935 but during it’s time of circulation the world was a very difference place. Black and white movies like “Metropolis” were the pinnacle of cinema, even though they had no sound, lol. Jazz was the hippest music to listen to šŸ™‚ And the first radio station to broadcast programs in all of North America was a Canadian station in Montreal. Women also fought and won their right to vote. Before this period in time women couldn’t even hold public office (appointed positions.) Here’s a look at what life was like in the 1920s. Continue reading »