INFLATION & value of MONEY

The incredible shrinking of DOLLAR

How do we ensure that our saving are not eroded by inflation?

SIMPLY put, inflation is the increase in prices of goods and services over time,which mean it diminishes the purchasing power of today's dollar in the future.

While $1.20 buy you a can of coke today,you might need $2 in future. So we end up buying less in future with the same amount of money.

INFLATION could hit 5 per cent in the first quarter next year. This would be a 25 year historic high. The last time inflation hit a high level in July 1991, when it reached 4 per cent.

RISK-adverse investors
IT stands to reason then that conservative investors who put their money mainly in bank deposit will eventually end up worse off. Investing at 2 per cent while inflation is running around 4 to 5 per cent will see your wealth steadily eroded.

START early
Having a financial paln early on lets you take a long term investment horizon, which is beneficial on various fronts.
The best time is during the young age of course, as they stand to gain the most from compunding, dollar cost averaging, investing at the lower risk level and maximising of returns over the long term.