I never understood people︀ that do that.
Putting money in a bank in Georgia or Cambodia or Kazakhstan etc︁ your risk:reward is very bad. In the best case you will make 2-3% (or 5%︂ in Cambodia) on your USD. In the worst case (and the odds of that are︃ not 0%) the bank will go bankrupt and you will lose 100% of your money.︄ These places are banana republics where the government won't bail you out.
You're risking 100%︅ of your money to make 2%, investing your money in whatever loans these banks will︆ do which you have no control over.
Why do that when Instead you can buy︇ a Index of Dividend Stocks like SPYD which currently pays 4.60% dividend in USD. There︈ is risk but it's limited and spread over dozens of strong companies, most of them︉ founded way before these Georgian banks were created. At the worst case you will still︊ not lose 100% of your capital, and in the long term (5-15 years) you are︋ practically guaranteed to appreciate your capital due to inflation PLUS get the 4.60% dividends paid︌ every quarter. You can buy and sell whenever you want and are not locked in︍ to a deposit.
PLUS the people that are more risk taking and lured by the︎ high yields in exotic currencies seem to avoid the fact that the currency risk is️ immense and can wipe out years of yield in a week. Just look at EUR\GEL graph to see how GEL lost 33% of its value in the last 2 years 60% of its value in 6 years. And I don't even want to think about people that did a deposit in Turkish Lira...
P.S. Buying dividend ETF also means you will not be invested in any tech bubble companies (since none of them make any profit therefore can't pay dividends), so your risk of bubble crashing and ruining your investment is lower as well
Putting money in a bank in Georgia or Cambodia or Kazakhstan etc︁ your risk:reward is very bad. In the best case you will make 2-3% (or 5%︂ in Cambodia) on your USD. In the worst case (and the odds of that are︃ not 0%) the bank will go bankrupt and you will lose 100% of your money.︄ These places are banana republics where the government won't bail you out.
You're risking 100%︅ of your money to make 2%, investing your money in whatever loans these banks will︆ do which you have no control over.
Why do that when Instead you can buy︇ a Index of Dividend Stocks like SPYD which currently pays 4.60% dividend in USD. There︈ is risk but it's limited and spread over dozens of strong companies, most of them︉ founded way before these Georgian banks were created. At the worst case you will still︊ not lose 100% of your capital, and in the long term (5-15 years) you are︋ practically guaranteed to appreciate your capital due to inflation PLUS get the 4.60% dividends paid︌ every quarter. You can buy and sell whenever you want and are not locked in︍ to a deposit.
PLUS the people that are more risk taking and lured by the︎ high yields in exotic currencies seem to avoid the fact that the currency risk is️ immense and can wipe out years of yield in a week. Just look at EUR\GEL graph to see how GEL lost 33% of its value in the last 2 years 60% of its value in 6 years. And I don't even want to think about people that did a deposit in Turkish Lira...
P.S. Buying dividend ETF also means you will not be invested in any tech bubble companies (since none of them make any profit therefore can't pay dividends), so your risk of bubble crashing and ruining your investment is lower as well
