INFLATION

haha. normally I post mostly rubbish stuff. But I think this is impt , esp as an econs student.

The Sunday times came up with an article on "HOW TO BEAT INFLATION" and came up with 10 ways to overcome the shrinking dollar

1 - Cut down spending, live within your means (reduce expenditure)
2 - Try to save 20% of your pay or more (pay urself 1st)
3 - Do not be overly conservative (invest instead of leaving all of it in savings or fixed deposits)
4 - Don't rely solely on guaranteed products (bonds tt have marginal protection against inflation in long term )
5 - Save regularly via an investment platform (start investing earlier via savings plan)
6 - Take on sensible level of investment risk (resonable spread of defensive and growth assets)
7 - Invest for returns that will beat inflation (gobally diversified portfolio of stocks and bonds)
8 - Understand the power of compounding (plan, save & invest early. Rule of 72)
9 - Invest in asset class that appreciate (eg. property. but invest within ur means)
10 - Limit exposure to depreciating assets (consumer goods like car)

However, if you examine it again, the one way mentioned by sunday times to beat inflation is to invest, invest and invest.

The annual rates of inflation by CPI in singapore was still okay for the past few years. BUT....

"Singapore's annual inflation rate hit a 25-year high of 6.6% in January, according to Department of Statistics (DOS) data released on Monday [25 Feb 2008]. The inflation rate, as indicated by the consumer price index (CPI), was the highest since the 7.5% hit in March 1982. In December, the annual rate was 4.4%."

FInding things to invest to beat this 6.6% would be quite difficult. Seems like everyone of us needs to be equipped of the knowledge of investing if we wanted to win the battle against inflation.

Well, I need to find a job first..... haha.....

Y