Monday, July 28, 2008

Food for Thought

If you used to set aside 10% of your take-home pay as savings every month, but inflation is hovering at around 9% today...

It means that you will have no more new savings if you continue to live your lifestyle as you used to do.

Scary, eh?

1 comment:

rench00 said...

your analysis is misleading. if you save 10% of your earnings, despite a 9% inflation, after a year, you will still have saved an equivalent of 9.1% of the amount you have saved.

however, with inflation that high... do you really want to save though? considering that if you do save... the value of your money will drop (unless you are a very shrewd investor). therefore, isn't it more worthwhile to spend your money now, while it is still worth something?

but then again, it depends on what you mean by saving.