Tip of the Week - Inflation is an invisible thief
Inflation is an invisible thief. You may not see it or hear it, but slowly and surely, it is stealing your future from you.
Rising prices in everything around us, from a simple plate of chicken rice to your million-dollar condominium, reduces the purchasing power of our money over time.
Do you know that at an inflation rate of 2.5%, $100k saved in the bank over 20 years would only be worth about $60k! That is a 40% loss in purchasing power!
On the other hand, $100k invested in the S&P 500 (comprising the top 500 companies in the US) would have grown to $318k during the same period.
There's no guarantee that you will make money from investing, but you are guaranteed to lose money by doing nothing!
Long gone are the days where our grandparents stashed their hard-earned savings into biscuit tins. Banks came along, and it became commonplace to open a savings deposit account instead as they used to pay a decent interest rate.
Today, whereby interest rates are close to zero, keeping your money in the bank is no different from keeping them in biscuit tins.
So in the most literal sense of the word, savers are losers. Every day, your money in the bank is losing its value.
Do not sit back and do nothing - overcome inflation by putting your money to work. Park your money in productive assets that generate a positive cash flow - be it an endowment savings plan, company shares, bonds or real estate.
Investing is the only way to a financially secure future. Inflation is the common enemy.
How are you protecting your money from the invisible thief?