Who or what do you think is the number one enemy of your hard-earned money except yourself? It is not other people but sometimes it can be if you already have a family or spouse who will spend it as much as they can.
I will give you a hint, it starts with the letter “i”. Yes, you’re right, it’s inflation. This word is becoming popular these days because we frequently heard it from TV and radio.
The question is what really is inflation? Inflation is a price increase of commodities and services in a given area while inflation rate is the change in inflation which is normally expressed in percentage.
Why Inflation is the Number One Enemy of your Money?
I believe you are aware of increasing prices of goods and services nowadays. When you are still in elementary days, it is still OK to have a P5 allowance for the day. However, not anymore today, with that money you can’t even ride a Jeep. Inflation is always sure to occur, you can’t avoid it since you are still alive but you can prepare and take necessary actions to fight this using some proven and effective methods.
Inflation is the worst enemy of your money because it reduces your buying power. Your one hundred pesos last year is not the same P100 today. Its value decreases as the time goes by, it is unavoidable. But the good news is there are ways to combat inflation, you just only need to learn these ways and make proper actions.
If you are saving money in the bank, you will know and realize that your money is unproductive, close to zero return because of 0.5% interest per year. There are other alternatives than putting your money on the bank which will give you a decent return.
Basically, if you put all your money in savings account alone, you are actually losing some of your money because of inflation since inflation rate is around 4% while savings account interest rate is only 0.5%.
When you invested in these vehicles , your money will give you more profit and higher interest than inflation rate and interest rate from the bank, thus, you can beat it. Some of these investments that you enter to are UITF, mutual funds and stocks but of course, you should research and study it first before you place your money in them. It is also important to save regularly even a small portion of your salary or income so you can have money that you can use for other things like investing.