Skip to main content

MONEY TALK: 5 Things You Need to Know About Inflation

1. Definition


Inflation is the rise in the prices of goods and services in a country. It is translated to the decrease in the purchasing power of a currency. For example, your 500 pesos now can only buy 80% of what it can buy last year.



2. You actually lose money when you save with a piggy bank or under your bed sheet. (I mean long term saving here.)

Having a piggy bank is what most people do to save money. But unfortunately, your money inside it will be eaten wholly by Philippine’s high inflation rate.

Saving for long term in a piggy bank or under your bed sheet is simply outdated and impractical nowadays.



3. You actually lose money when you invest in a bank account due to inflation.

Typical bank savings accounts in the Philippines have an annual interest rate of 0.5 to 1 percent. This is very far lower than the average inflation rate in the country which is 7.48 percent (average from 2005 to 2008). Time deposits though can be up to 4 to 5% but still beaten by the country’s inflation rate.
Note : Data from National Statistics Office (NSO)

4. There are investments that beat inflation. 


Among them are the following:

a. Land usually appreciates. It is one asset that increases in value over time. The problem though with land properties is its liquidity. You can’t just simply sell it in case you need cash for emergency.

b. Treasury bills usually give 10 percent or higher interest rate. The problem though, with treasury bills is that it usually comes in a price limit of 50 to 100 thousand pesos. Can you afford that?

c. Depending on the type of stock or mutual fund, it can also beat inflation but depends much on the investor’s decisions.



5. Computer and other electronic devices generally decrease in price.

Because of the increasing rate of production, the cost of producing electronic devices generally goes down. This results in the decrease in its prices. Look how much laptops cost today; you can buy a decent one for only 20 to 30,000 pesos. Compare this two or three years ago when low-spec laptops costs 50 to 100 000 pesos!

And talking about cellular phones, can you remember how much it costs to buy Nokia 3310 when it first came out in the Philippines? 11,000 pesos! Imagine that? Now, it was already phased out but you can already buy a basic phone, more powerful than Nokia 3310 for only 1300 pesos.

Electronic gadgets are not good investments.

Comments

Popular posts from this blog

SCAM: My First Scam Text This Year; 850000 Pesos from GMA Kapuso Foundation

It's a brand new year for everyone, including local scammers. And despite all the efforts by PLDT and Globe Telecom to curb text message scammers, from time to time, they still creep out and show up in our inboxes. And as hard to believe as the messages of winning some great amounts of money is the fact that there are still people who believe them. I personally know someone and that scam text message triggered events that turn her life upside down. So my point is, we still need to be careful regarding these scam messages. The danger is real! So without further ado, here's the scam message I received a few days ago. On Sunday, January 7, 2018 at exactly 3:33PM (PH time), I received this message from a certain Atty. Jhon Acosta with phone number 09552962911 Congratulations! Ursim# Hadwon PHP850,000 From(GMA KAPUSO FOUNDATION) To Claim Send Ur (NAME/ADD/AGE) &Call Me Now Im Atty;JHON ACOSTA DTI#0391s2018 Thankyou,  Do Not Ever Reply Obviously, this is a

How to Set an Appointment with SSS Online?

To avoid long lines in SSS Offices, you can use their online services to set an appointment before going there. Here's the steps to do it. Note: SSS stands for Social Security System, a government owned and controlled corporation serving as a statutory insurance service for private individuals. 1. Log-in to www.sss.gov.ph . In the login tab in the menu, you can select SSS Login and you'll be greeted with this interface. Use your username and password to login. In case you forgot either or both your password and your username, just click the appropriate link. In case you haven't registered for an online account, click the appropriate button to register. 2. Once you have entered your account, hover over to Members Profile and select the Appointment System link under it. 3. Select from the drop-down menus the Purpose of your visit, the Region , and the SSS Servicing Branch you wanted to visit. 4. Select a date from the calendar provided and

FREE Calls to Your Favorite Fast-food Chain on Globe Phones

In the age of mobile apps and ordering via internet, people are increasingly going from "calling" to "tapping and clicking" their fast food orders. The arrival of Honestbee , Foodpanda and just recently, Grab Food is a testament to how much this trend is growing. The visual effect these apps provide has a huge advantage over voice only "call". In an apparent attempt to pull back some users in using the hotlines, Jollibee Group teams up with Globe Telecoms to allow free calls on their Globe handset to order from their favorite fastfood. Yes, even without a load , you can make a call to the Hotlines. Here's the promotional poster. Just dial these numbers to order: Jollibee - #87000 Mang Inasal - #71111 Chowking - #98888 Greenwich - #55555 Burger King - #22222 For more information check this link http://business.globe.com.ph/news-and-events/jollibee-to-expand-express-delivery.html