Is inflation your friend or foe?

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There has been many disagreements about inflation numbers. The man on the street will say that inflation numbers are actually higher than what the government says. The government will say that the inflation numbers are based on a basket of goods and it’s not a number plucked out of nowhere. Very high inflation numbers are not good for the people. It meant that our money gets smaller too fast. Thus, our ability to afford things get worse too. However, a small inflation is okay. Say 2%? Okay, more realistically, 3%? Our inflation numbers on average was 3.4%. Image as below.

By the way, inflation is really based on a basket of goods and the inflation number debate happens in most countries where the people have the freedom to say what they want. We are one of those countries. As for the question of my thoughts on inflation, I personally think of inflation as an enabler.

Will there be a day where the inflation ceases to exist? What happens if there are no inflation? For one thing, everything will stay stagnant. Prices will not move at all. If the price of goods and services stop increasing, may I know why do we need salary increments…? Salary increments are not given only to those who perform exceptionally well. It’s given to all if the company could; have profits.

Companies do not want their staffs live a worse life this year versus last year… If the price of meals, price of properties and price of everything remains exactly the same, then our life will be very stable. Is this really possible? Well, no countries in the world has been able to achieve it yet.

Cause of inflation? Salary first or inflation first? We do not know whether inflation is the cause of people being paid higher, or people were paid higher and thus inflation happened. That does not matter. What we needed to know is that because people have a higher pay, they could then afford to pay more for goods and services. That includes for properties too. This is why it’s best to save some of our salary, buy a property and then wait for someone else’s salary to move up and buys our property instead. It usually works as proven in many countries, especially the advanced ones. Happy understanding that inflation could just be a friend.

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<Featured Image is courtesy of Stock Photos from Doubletree Studio>

Next suggested article:  Deflation better than inflation? 😛

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