The unspoken killer has been always everywhere. Average people feel it, investors play the waves with it and rich people want to dictate it. However, no one has ever caught nor touched it and all of them always face the fear of it.
Oops! I did not mean to be poetic or something. I was just in the mood to figuratively describe what inflation is for me.
Have you ever wondered why there is the not-so-funny inflation here on earth? How about questioning the importance of goods and services rising as the heavens above over time? If you have asked those questions, congratulations! Just congratulations!
We always hear inflation everywhere. People have became more aware of its effect to the lives of each and everyone whose capable of eating and living. Actually, my fear of inflation defy the kitten out of me to enter the world of investments.
When I saw this picture last year in a seminar about stocks, I just found myself nodding and thinking how the value of Mr. Money can depreciate without him telling me. How dare him!
Inflation happens when a country prints more money than what it actually earns. Of course, as a result every one will lose some value of their money when inflation as a hidden tax strikes.
Reference: Saving Your Future
Here is the recent chart of the inflation rate of the Philippines:
Let us get the inflation rate in February 2015 which was 2.5%. That means your 100 pesos today will be worth 97.50 next year so putting your money in a bank account with a flat return is a losing strategy.
Lets say that you have 12,000 pesos income per month in today’s value. Your 12,000 pesos with the average inflation rate of 2.5% has the same buying power as 15,361.01 pesos 10 years later 17,379.58 pesos 15 years later and 19,663.40 pesos 20 years later .
I know. Don’t cry. You are not alone. It is still not too late and still not too early to start (’em tapping your back dude) knowing the crappy things around you. The good thing is, there are a lot of ways to fight inflation. I will be spitting them on my future blog posts. The most important thing now is that you know who the unspoken killer is. I tell you with my eyes being teary, when you already learn how to fight inflation, you will be able to conquer the world. Let’s rock!
Rock to the world! Cheers!
Disclaimer: Photos are not mine.
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