As i said from the last POST, the best way to tackling down the living cost is learn how to invest your money instead of spending more into the inflation market.
First of all you should know how inflation can turn people's money smaller and smaller.It's easy to explain how inflation will lower down the value of money. Example, now you may buy 5 apples by $ 2 .Due to the inflation ,the $ 2 you own after five years may only buy 3 apples, because the value of money was dropped.
How Inflation Lowering Your Money's Value
Someone used to said inflation was like an invisible hand, it will took our money away without any awareness. For example, if you saved $ 1 million in the bank and the inflation rate for this year2011 is 4% , (don't worry!) the money inside your account is still $ 1 million , no one will steal it, but the value of the money will dropped 4% after the year.
What i mean ''dropped' can be expressed by this example. On 2011, you may wanted buy a Condo'
worth $ 1 million but you didn't ; however when you decided on 2012, you need to pay extra $ 40,0000 because of the price or building material rose up. It's all due to inflation.Furthermore the value of money
will also drop when the government keep printing more money out into market to support economy. Every time they have prints the money,the currency will gone of its true value causes the purchasing power going down.
Lets see Robert Kiyosaki explain how inflation will kill our savings
Learn Investment to Tackle Inflation
So, how investment worked to tackle inflation?
It's pretty simple the step, just hard to work it out for most people.
Since the value of the money will '' dropped'' directly proportional with the inflation rate, what we could do is to find something to ''covers'' this hole dig by inflation, and this is the most basic way to learn.
We could find any viable and potential products in investment market to cover the hole. It means if the inflation rate is 4 % for the year and you are able to find an investment which rate of return is 10%, you can now earn 6% real money into your pocket instead of deducted 4% from value of money.
Cool ?! It's sounds easy from the theory, but comes difficult when come to practical. People may lazy to find these investment,and may feel uncomfortable to put their money in risk.
Hedge Against Inflation
Hedge Against Inflation - you can protect yourself from the inflation , while making a big money from it too!
Smart investor will choose to buy commodities against the inflation like Oil, Gold, Silver, Land etc.
Today, there are many experts investor strongly recommended that Silver is the No 1 investment today to against inflation. However the price of Silver was quite a high value in the market today, about $ 35 an ounce.
We should take action when the price comes down. Investor believe that value of Silver will rise higher one day.
The reason why those investor like Silver is because Silver are mostly used in industries commodities
such as cell phone,computer and many things. But they thought most people only focusing on Gold market which has making it more intensive than Silver.
Let's see how great investor explain which hedge is the best against inflation.
*So lets start it together today to Run out from the rat race and achieve our Financial Freedom!
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