Inflation proof!
Data out of the US indicates that the rate of inflation for May 2022 was 8.3%. In the EU and UK, it was 8.8% and 9.1% respectively. Here in Singapore, headline inflation was 5.6% (less accommodation and private transport, core inflation was a more modest but still significant 3.6%). In an inflationary environment, our savings and earnings gradually become worth less. This is not necessarily a bad thing - current conventional wisdom suggests that about 2% inflation is a sweet spot where people know that it makes sense to spend money now, instead of letting its value erode. This spending keeps vendors, companies and the economy growing. But to get a sense of how significant heightened inflation can be - a salary of $2000 in the US last year is now only worth $1834. If this keeps up for just one more year, it'll be worth $1682. In five years, $2000 shrinks to $1297 worth of value. Put another way, a $5 plate of chips will cost $5.4 in 1 year, and balloons to $7.3 in 5 years. That does