Cash is no longer King during the Inflation period of time

Inflation isn’t going away. But high inflation will definitely hurt the purchasing power.

The higher inflation was driven by higher oil prices, commodities, and food prices. So, do you think Cash is King is still applicable today?

US shows an inflation rate of 8.54% which means with the same amount of money is buying 8.54% lesser of goods compared to last month. As inflation rises, the purchasing power of your cash is diminishing IF your salary is not raising along with the inflation level, it will hurt your living standard later.

In Malaysia, Bank Negara recorded an inflation rate of 2.2%. 1. Do you feel that our inflation is just only 2.2%? In my opinion, the inflation rate far more than that. E.g.

Weekly Petrol Price for RON95, RON97 & Diesel in Malaysia (carsome.my)

We started MCO in March 2020 and you not getting fired by the company should be happier already let’s not talk about increment. But what you are not aware of is that today the oil price is increased by 90% for RON97, 12.6% for RON95, and 14.9% for Diesel.

2. McDonald’s Sundae Cone (kid’s favor) price increased 100% to Rm2. Weekend grocery one round can easily spend up to rm250 – 300. M branded Bread raised the price of White Sandwich 400 grams (g) to RM2.80 per loaf (old price RM2.38), White Sandwich 600g to RM4 (RM3.35), Wheat Germ 400g to RM3 (RM2.48), and Wheat Germ 600g to RM4.25 (RM3.71)

All these expenses we can track in our daily life. So, do you think Cash is King in this environment? As inflation rises, the purchasing power of your cash is diminishing. Money in the present is worth more than the same sum of money in the future.

Next question: Are you afraid of losing your hard-earned money to inflation? There are some things that could not avoid in life something like taxes, death, and inflation.

Keeping cash in the bank as savings may not be the best idea. Here, 3 Best Ways to Protect your Money from Inflation

Invest in Real Estate

Real estate is a common investment tool that proven to be able to withstand the effects of inflation. This is because real estate values and rental incomes both tend to keep pace with inflation.

If you do not have enough money to own properties, or you do not want the stress of owning physical property. You can still invest in Real Estate Investment Trusts (REIT). When you are looking for a trust or REIT to invest in, you should look for those that have a strong track record that shows low fees, low volatility, and healthy dividends.

Invest in shares

During periods of inflation, equity investors experience lesser effects because during such periods, companies will usually increase the price tag on their products in response to the increasing cost of production. As a result, company earnings may have the potential to keep up with inflation.

Invest in Unit Trust

Unit trusts pool the resources of investors into one large fund, which is then divided into shares, or 'units'. Unit trusts are managed by professional fund managers and have varying levels of risk and return. Most importantly, you can access to worldwide market and invest at your own pace.