10 March 2011

Financial Management: The Power of Inflation to Make Our Money Useless

So, what is the inflation rate last year? 5 percent? or 10 percent? If you ask me, I would suggest you calculate it yourself. In this post, I am going to record my experience toward this matter, inflation, in my life.

First of all, let's take my favorite bread as an example. I still remember, five years ago, when I was a high school student, the bread cost me $1.00. Guess what, it costs me $2.20 now!!! Only five years, my money has been diluted more than 100% !!!! In other words, can you image that if your salary is not increased 100% within 5 years, you can only eat the half of a bread now, compared to 5 years ago. Unfortunately, it is quite impossible that our salary will be increased 100% in that limited period of time.

Next, let's look at my expenses during my Bachelor Degree. During the first semester, if I took a taxi from my university to bus station, which cost me only $5.00. After 4 years, the fare was $8.00, at least!!! But, guess what, my scholarship did not increase owing to this effect. In other words, the price was increased 60% within 4 years. Thirdly, let's look at the meal expenses. Again, it only cost around $3.00 during my first year of study. Now? Yes, the price was $5.00, at least. Or, it increases around 70%.

As you can see, it is so horrible. Unlike WMD, weapons of mass destructive, this weapons simply make the poor poorer, the rich richer. So, what we can do is to invest our money wisely and let it grows with the rate of inflation.Besides, it is cannot be denied that the inflation rate is also different in different locations. Therefore, it is our duty to spend our money wisely.
That's all for today. Feel free to give me a comment about this topic or any suggestion about Xaivier Blog. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. Therefore, do subscribe our feed, look at our sitemap or simply visit our Homepage.

Written by: Xaivier Chia

Note: Different countries have different inflation rate. This is just dependent on the economy development of that particular country.


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