Inflation.....A threat?

When I was a lot younger, my dad used to give me RM2 per day for my daily expenses at school. That's the money that I used to buy the Hotplate Mee, sirap ais and some other stuff. If I can recall correctly, when my little sister went to school in the 2000's, it was RM5 per day. It is possible that some kid will need RM10 per day in 3-4 years time. Plus...I can still remember that you can get a cigarette at 30 sen per stick in the late 90s. Nowadays, it's RM1 per stick. Heck...I know of a makcik who now sells her kuih tart nenas for RM1.50 per piece!! Imagine if you order 20 piece of tart nenas from this makcik....it'll cost you RM30!!!

To me folks, these are what I call inflation.To be a little bit more technical, it can be further defined as a rise in the general prices of foods and services in an economy over a period of time. As inflation increases, every ringgit that we own buys a smaller percentage of a product or services. In a layman's term.....our purchasing power decreases.....

The most well know measures of inflation would be CPI (Consumer Price Index), which measures the percentage change in the cost of purchasing goods and services by consumers over a period of time

Our very own inflation rate at 31st July 2011 is 3.11% as reported from tradingeconomics.com. However, it is good to note that we have to calculate our very own personal inflation rate to have a better and clearer picture as to how inflation affects us individually...

Based on what I understand, there are 2 reasons for  inflation which is high demand, low supply and the rise in the production costs. Basic economic tells us that when there is a demand for a products or services but shortage of supply, the price will go up. If I can recall correctly, this is what we call demand-pull inflation. When the price of raw materials go up, production cost will increase which in turn will increase the price so that companies maintain their profit margin. Furthermore, their workers will demand higher salaries as the company will pass these costs to the consumers.

So when inflation increases, logic tells us that our purchasing power decreases. A RM1 may buy you a teh tarik 3-4 years ago but now, that's no longer the case. In fact, we may find that in general, the price of most products and services are rising by the hour. Just 2-3 days ago, it was announced that the telco's company will be charging 6% tax on the consumers. In fact, it's even worse when the interest rates going up as loans will cost more which in turn, we have to pay more.....

Hence.....how do we beat inflation (if possible)...

The ways to beat inflation that I can think of now would be:

1) Start investing in the correct investment

As we can see from the graph above, our current inflation rate is at 3.11%. So, for ease of reference, we have to be smart and ensure we invest in places that can give us better returns than 3.11%. What's the rate of return for FD nowadays? Is it 3%? So, a good place to start would be ASB, ASD and Unit Trust

2) Diversify

Almost everybody knows this rule of investing. Never, EVER, put all your eggs in one basket. In other words, you need to diversify your investments portfolio. You may have 40% property investments, 40% unit trust investments, and 20% other investments. You may also split your unit trust investments into equities or bonds or whatever....

3) Invest extra cash in hand to ASB or balance fund. Better still, invest in gold.

4) Debt management. It's time to reduce debt to a minimum level as interest rates usually increases in tandem with inflation. Perhaps, it's time to settle off those highest rate loans as quickly as possible....

So there you go, my brief thoughts on inflation. Obviously, there's more to it that I have just wrote but the bottom line is whether we like it or not, we just can't ignore the importance of saving money. Hence, do what you gotta do and have a nice day....

Funny

Sometimes we see and hear people talk about the glory days. They really talk with a lot of pride together with a pinch of arrogance. Stating this and that. How much they get, bla bla bla, you get the idea......... but when it matters most, they suddenly frooze like a little cat...they turned blank...as if suddenly hulk has turn from green to white....

so...lesson learnt is....always....ALWAYS be humble. Can't actually remember when Tan Sri Syed MOkhtar even said a word about how great he is in making millions in his businesses. Life is funny. Sometimes you're up...and sometimes you'll down in the drain.....

how to...........be an unsuccessful person

People always write about things to do to be successful. Let's take a look on how to be an unsuccessful person

1. Sleep and wake up late everyday
2. Lazy
3. Spend on unneccesary things (cars/bikes/hobbies)
5. Watch movies 7 times a month
6. Lepak at mamak stall and talk about the world, the sky and everything else except how to be a better person.
7. PHD (perasaan hasad dengki)
8. Attitude
9. Buy the latest and most up to date handphones, tv, etc...
10. Have 4 credit cards with 3 of em almost reaching credit limit
11. Watch reality shows/cerekarama/horror instead of reading books
12.Don't know what to do with life
13. Don't know what you want in life
14. Bad mouth others
15. Tidak apa attitude (No 8)
16. Depend on others
17. Blame it on other people when things go wrong
18. Doing things half-heartedly
19. Doing things that you don't know and don't have a clue about
20. Forget about god.


there are more actually.........

Words for thought

1. Up until we realize that we are not good, we will forever be where we are currently.
2. Don't deny the facts that we are not as hardworking as some other people.
3. We always thought the world as sunshines and rainbows that we forgets about the rain and thunder
4. 2 heads are seriously better then 1 but why are we quarelling with each other?
5. Change is good but until we decide to change, we will be who we are as yesterday.
6. Why is it, when some achieve success, we blame on others why we can't be as successful as the other person....
7. Why is it we always do something that it is not worthwhile doing?


errr................

Mid December..............errrrkkkkkkkk

wow...it's almost a year since I first wrote my first ever posting in this blog. Believe it or not, it felt like yesterday. To a certain extent, I felt that, I somehow grew along with this blog.

I have to agree that I don't always write. Writing for me involves lots of emotions and sometimes ideas. Sometimes, I felt like sharing something, eventhough it's not important. And some other times, I felt that certain things should remain private. Hehehehe

I do hope that whoever reads this blog would've gain something out of it. Me myself, I learnt that by sharing things thru my writings, I felt a lot happier and satisfied.

Anyhoos, for the last couple of weeks, like I mentioned earlier, I am now a bit busy in preparing the company's accounts for the upcoming audit in Jan/Feb 10. It's gonna be hectic and gonna be stressful. I'm pretty sure of that.

Last weekend, my sister got engaged. I thought it was a wonderful and simple engagement ceremony. Nothing fancy and nothing extraordinary. Just nice and simple. Congratulations Kak Uda!!!

In terms of golfing, I miss playing it regularly. Now I can only play about once in 3 weeks. I don't know why maybe kurang kaki kot. Hahahahah.

Anyways, i've been saying this over and over again, but I don't care I'm gonna say it again. Next year will be another exiciting year for me and the family. Lots of things to achieve and to be done. Just like in Dale Carnegie's method : Get things DONE NOW!!!.....heheheheh

Btw, a point to ponder, sometimes, a friend might come out of the blue to you and say something that might interests you. It could be anything actually. You know what, that little spark might be the thing for you to do some research on. Like I said, it could be just about anything. If you think that 'spark' really turned you on like a kid that wants a candy so badly, follow your instinct and find out more about it. errrr....you get what i'm saying?....

Have a good week ahead...