Inflation: Your Money’s Silent Enemy


It is very hard to save. You don’t need anyone to tell you that. Chances are you already know this. With so much stuff being hyped on TV, on the Internet, and over the radio, it is a small miracle why more people aren’t broke or over their heads in debt. We are constantly being bombarded by stuff to buy and we are constantly being reminded that we need to buy now. No wonder then that people find it hard to save when it is so easy to put everything on plastic.

However, even if you were to manage and save cash, you aren’t out of the woods yet. The sad truth is that the worst thing you can do to your savings is to put it in the bank. Serious talk. Sadly, bank deposit rates pay so little that you are actually losing money if you keep your cash in the bank.

Your continuously rotting money

If you keep your money in the bank, it will be slowly eaten up by your silent enemy Inflation. That’s right-your money rots in the bank thanks to inflation. Inflation is like a financial cancer that silently and slowly eats into peoples’ savings until their money is worthless. Every year, your money buys less and less goods and services. This is inflation – money loses value over time.

If you left your savings in the bank, it will eventually reach a point where it can’t buy much of anything. Think about it-a dollar back in 1900 used to buy lots of stuff. In fact, people making a dollar a day were doing quite well. Not so today.

You can do something about inflation

The good news is that you don’t have to take all of this lying down. You don’t have to sit and watch passively as your money rots to nothing. You can put your money in investments that pay a return that beats the rate of inflation. If the annual inflation rate is 4%, look for an investment vehicle that yields 4% plus enough to cover taxes.

What kind of investments allow you these kinds of returns? Quite a number, actually. The most obvious is the stock market. Many funds routinely return over 6% annually. Alternatively, you can try corporate bonds which pay a  fixed rate.  You can even invest in art. Whatever you do, don’t let your money get destroyed by its silent enemy.