Inflation=Wealth Biggest Enemy 2
Recently, I pay much concern about inflation as being ROBBER of wealth. Inflation steal your wealth silently and naturally without your concern. Inflation being your biggest enemy on your pathway to get rich slowly.
Price of goods increase double in 12 year times with inflation rate of 6% per year. In other words, your purchasing power decrease half with the same amount of money.
Okay, have you ever think of ‘do my salary increase double in 12 year times?’ Most people do not double their salary in 12 year times. So how are them encounter with the inflation occurring non-stop for 24 hours and 365 days a year? Even if they have double their salary, the increment just only compensate with the inflation occurring. Inflation have wipe out all your increasing salary and you actually still earning the same all these years!
I am so shock after finding the truth of the inflation. Does those employee working hard day and night find out the truth of inflation? I just understand why people go for business after working for several years to build of their modal.
If you want to be rich, you cannot forget the existence of inflation. My rule of thumb is once you have money, go invest it and the return of investment rate must bigger than the inflation rate surround you which steal your money slowly every second. Don’t be lazy to find out nice investment. Your value of money is deteriorate every seconds if you do not invest it!
I have wipe out big obstacle on the road of my financial freedom. Cheers!
That is why I always encourage my friends and relatives to invest as they will face more loss if they keep their money in savings account. Inflation will eat up their purchasing power.
[Reply]
Mrcoolku Reply:
November 30th, 2009 at 10:02 pm
I invest all my money for time being. I am still single so I skip the buffer fund. Since my investment is more volatile, I can sold it anytime when in emergency.
Just as Rich Dad said, saving is the biggest loser in today economy system.
[Reply]
sourplum Reply:
April 29th, 2010 at 10:14 am
is it volatile equal to high liquidity?
please advise
[Reply]
Mrcoolku Reply:
May 1st, 2010 at 7:44 am
No the same, volatile means the stock can rise and drop many in one day like drop a few dollars in just a few hours. Liquidity means how easy you can sell your current holding, low liquidity is just like property. You can’t sell it easily.