Keep Your Money Safe By Beating Inflation


Millennials are born between the years 1983 and 2001 and are known to have a short attention span on a lot of things, including the desire to make an impact on society. They are the types of people who, at one point, will espouse a particular advocacy, but a different one tomorrow. But there are millennials who know what they want from life. These are the millennials who are specific in their goals, such as travel, career, life and, for some, investments.

Regardless of the age group you belong, everybody now belongs to a society of millennials, where everything is fast-paced, from texting to shopping for something on the Internet. This fast-paced society could mislead you and, before you know it, you are already in your 60s and still find yourself procrastinating on things you have not started doing.

There is so much to think about, but what really is everybody’s concern regardless of age? It is inflation. The inflation rate as of August 2017 is 3.1 percent. At this rate, the value of your savings in the bank would be cut in half by the time you retire at 60.

So how does one build a portfolio knowing there is a thief called inflation that reduces the value of your money in half?

Try investing to beat inflation.


Soon after building up your emergency fund, make sure to set aside a portion of your savings as investments. There are many investment programs available for Filipinos today; unit investment trust funds or UITFs, mutual funds, stocks, bonds, variable universal life or VUL insurance and exchange traded funds. These investment platforms allow your money to grow more than the inflation rate. In fact, these investment platforms earn from 5 percent to 10 percent on average per annum.

Becoming a trader in the stock market is a different story. A trader may earn even more than 10 percent but one should train to participate in the stock market.

Make an average interest-return benchmark

Once you have made an investment, track its performance. Make sure you have at least an average interest-rate benchmark so as to surpass the inflation rate. Some whose risk profile is not on the high side may opt to invest in bonds or in a balanced fund with an average rate of return of 5 percent to 7 percent at least.

If you invest on a regular basis and for the long haul, losing some during a recession should not affect you, since those are just paper losses, and your money will return as soon as the market corrects.

Identify your timeline also on how long you will invest in a particular fund.

Match your investment with a particular goal

Every time you open an investment account, make sure to match it with a particular goal. It could be for retirement, the education of your children, a business fund or as funding for a future travel that will motivate you to keep on investing.

Every goal has a timeline, and every goal has a price tag. Planning is crucial and, realizing that inflation will be present forever, you should factor in the effects of inflation in forecasting your goal. Plot how long you should be saving for that goal.

An example is retirement, a rule of thumb is to save 20 years prior to your target retirement age. So investing for 20 years should help you beat inflation and achieve your
retirement lifestyle.

If you are now a parent, and you have a 1-year-old baby, that is 18 years of investing before your baby steps in to his first year in tertiary level. Factor in also how old you will be by the time your first born is in college.

Inflation, if not considered in planning, can be deadly. This is also the reason why many retirees today are disappointed in their pension fund. These are the pensioners who were not taught on the effects of inflation, especially if you live too long and still spend on the basic things a retiree needs, such as food, medicines and many others concerning their daily living expenses.

Inflation is a thief, but now that you know about this thief, do your future self a favor, beat inflation today.


Jendee Sapo, RFP is a registered financial planner. To learn more about personal financial planning, attend the 66th RFP program this November 2017.

To inquire, e-mail or text <name><e-mail> <RFP> at 0917-9689774.


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