Inflation

Rule No.1: Never lose money

Time might be the greatest asset you can have if you have a sound investment plan. That’s because longer time horizons give you years of compounding returns. 

But the ugly truth is that you’re losing purchasing power if you don't do any proper investments. This derives from the fact that inflation is always working against you over time. You’ve heard tales of gasoline sold for $0.50 a litre and such, right? The increase in prices over time is inflation, signifying that a dollar today simply does not buy as much as it once did. 

"Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man."  

- President Ronald Reagan


Source: Morningstar, Elroy Dimson, Paul Marsh, Mike Staunton, Triumph of the Optimists, Princeton University Press, 2002, Credit Suisse Global Investment Returns Sourcebook 2015 

Best-Case: -2.2% per year

Middle: -3.9% per year

What can I do? Realise a savings account is only a place to hold your money until you find a better investment. If you want to beat inflation, you have to look at other investment opportunities.

Be educated on basic investing skills.

  • Avoid get-rich-quick schemes

  • Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty. – Proverbs