How Inflation Affects Us?

        I know you heard about Inflation in a T.V. news or you read it in a newspaper, but maybe you don't care and did not try to understand what it is. Now this is the right time, na dapat makialam ka na at alamin kung anu ba itong Inflation and how to defeat this inflation. Before we go to the topic, I give you a definition of Inflation from Investopedia & Wikepedia;

From Investopedia;
"The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum."

From Wikepedia;
"In economics inflation is a persistent increase in the general price level of goods and services in an economy over a period of time."

         Sa madaling salita "Inflation" yun tinatawag na pagtaas ng mga bilihin from basics needs hangang sa mga iba pa nating pangangailangan sa ating pamumuhay.

         Did you know how Inflation Affects us?  I know you feel the effect of inflation, but you just keep quiet and let it pass year by year. Maybe one reason is because your company gives you an increase every year, that's why you didn't care for it anymore. But if you realize it, the increase in your salary is just a money illusion. Why? They gave you increase, but the price of your basic needs also increases. 
         It means, yun karagdagan suweldo sayo ay sapat lang upang makabili ka pa din ng mga pangangailangan mo kahit na tumaas na ang presyo ng mga ito, katulad ng pagkain, pamasahe, kuryente, tubig at iba pa. The question is? May nagbago ba sa sitwasyon mo ngayon na tumaas ang suweldo mo, wala di ba? paulit ulit pa din dahil ang totoo hinde naman nadagdagan yun kita mo kahit na every year ka nagkakaroon ng increase sa suweldo.

          Inflation is silently pulling you down you never notice or expect it, but it slowly brings you down. Even your money in your own regular savings account in the bank also cannot escape from this inflation. See image below from the National Statistics Office (NSO) report of average inflation rate. 

         I know you will ask and so How this will affect me and my Savings in the bank? I'll give you a simple example.

         Let say monthly you save Php 1,000.00 in one year you have Php 12,000.00 Wow! ang laki na ng naipon mo. Let say with interest of 0.375% per year sa loob ng isang taon ang kinita ng pera mo ay Php 45.00. So you have now Php 12,045.00 yan ang pera mo sa bangko sa loob ng isang taon. Pero ito ba talaga ang actual value ng pera mo? Let consider the table above for the average inflation rate for the year 2012 which is 3.2% . To get the actual value of your money for 1 year we add the interest and deduct the inflated cost. [Php 12,000.00 (Total Amount of Saving) + Php 45.00 (interest @ 0.375) - Php 384.00 (Total Amount of Saving x 3.2% inflation rate) = Php 11,661.00 (actual value of your money)].

Note: This is a rough computation it is for illustrative purposes only to show how inflation can affect your savings.

        So you see in the sample computation na bumaba yun tunay na halaga ng pera mo and your money is actually beaten by inflation. I just want to emphasize that don't just let your money sleep in a bank, invest it slowly in any investment vehicle that is convenient to you, so that your money truly grow and beat inflation. Start asking & learn the different type of investment option that can truly defeat Inflation. "We cannot avoid Inflation but we can fight back and defeat Inflation by learning how to Invest & where to Invest".    
                                                                       

       Hope you learn something about Inflation through my blog and see you in my next post. Thanks for reading & God Bless to you....

Disclaimer: I’m not a financial expert adviser, I’m the same as you looking for the best option where I can put my money to make it grow and I found out through investing and now I’m at the stage of studying & learning the different investment option.      


Read Also:
Why We Should Invest?
Money Saving Tips
How to Start a Savings?
Money Saving Issue for Pinoy

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P.S. By the way I joined truly rich club, dahil sa club binuksan nila ang aking kaisipan about investing, saving at iba pa. They guide me and motivate me to reach my financial goal, iniimbitahan ko din kayo to join us click here....

Why We Should Invest?

Photo credit: pinoyofwsmartinvestment

Invest Invest din pagmay time! Wow! Anu ba talaga itong investing at bakit ko kelangan maginvest? This is the simple reason why “Investing is making your money work for you” this is the great thing about investing and not only that investing makes your money truly grow. Money does not get tired, it does not get sick, and it does not get burned out.  Money only needs a good master who knows how to invest or a committed master that is willing to learn how to invest.

Not only that, we need to invest to fight “inflation” sa madaling salita yun tinatawag na pagtaas ng mga bilihin from basics needs hangang sa mga iba pa nating pangangailangan sa ating pamumuhay. Every one of us is affected by this inflation.

Photo credit: nscb.gov.ph

An example, last year nung nagbakasyon ako ng pilipinas paakyat ako ng hagdan ng MRT station sa may kamuning ng maisipan ko bumili ng candy. “Pabili nga po ng candy sabay dampot sa candy tatlong piraso at kasabay din nun ibinigay ko yun bayad ko na 1.00 peso” Nagulat ako sabi ng tindera sakin “kulang ito 2.00 peso na ang tatlong piraso ng candy kung gusto mo isang piraso 1.00 peso”. It means bumaba na ang value ng ating peso at darating ang araw na wala na talaga mabibili ang 1.00 peso bill natin. So as years go by, the prices of food, transportation, rent, electricity and other necessities will continue to increase. Maaring hinde natin nararamdaman sa araw araw but as the years go by mararamdaman natin yan.

Photo credit: alpha.propinoy.net

And even you are in a good company giving a salary increase per year still not enough to say na hinde mo na kelangan maginvest. Why? Dahil yung increase sayo ay minsan sapat lang  para makabili ka ng pangangailangan mo, binigyan ka nga ng increase pero tumaas naman presyo ng pagkain, pamasahe at iba pang mga pangangailangan mo. So, still you are in the same situation working hard trying to beat this inflation.

Below is an excerpt from the e-book of J3 Patiño (Stock Market Jump Starter).

“This is inflation. It moves us financially backwards little by little. We know it exists, but we ignore it. We just keep on working hard for our dreams, but what we don’t realize is that inflation is pushing us back further and further away from it. If your dreams cost P1 million now, it will cost P1.2 million in five years. In ten years it will cost PhP1.6 million, and in 20 years, it will nearly triple to PhP2.8 million. The good news is that we can fight inflation. This is by learning how to invest”.

I want to remind you that, Investing is not a get rich fast idea. Taking control of your money is depends on you, investing take effort, determination and learning skills. After all, no one is in a better position than you are to know what is best for you and your money. There are groups or institution na nagtuturo ng basics step by step how to invest. For me, I joined Bo. Sanchez Truly Rich Club he guides me how to invest and teach me how to gain financial wealth and spiritual abundance at the same time. So, I'm inviting you to join too.

Disclaimer: I’m not a financial expert adviser or a license stock broker, I’m the same as you looking for the best option where I can put my money to make it grow and I found out through investing.

Subscribe to my blog to receive my latest post directly to your email Inbox it's free>>Subscribe to My Personal thoughts About Life ..

P.S.1 The idea of this topic was taken from Investing 101 & Stock Market Jump Starter e-book by J3 Patiño.

 P.S.2 Do you want to gain Financial wealth & Spiritual abundance at the same time? 

 Join us at the Truly Rich Club now founded by Bo. Sanchez, its purpose is to "help good people  become rich". Because of the guidance I get from the Club, I’m now investing in the Stock  Market! I’m inviting you to join the Club too. If you’re interested, click the link here Truly Rich  Club.