Just For Thinking ....
Read? Inflation - The Silent Killer
1. Singapore Inflation Rate
XIRR of Inflation (2000 to 2013) = 2.1%
2. Uncle8888 is an old human asset that depreciates with time .....
XIRR of Salary (2000 to 2013) = 0.7%
3. Uncle8888's Investment Portfolio Performance
XIRR of Investment Portfolio (Jan 2000 to 25 Apr 2014) = 9.6%
4. Impact of inflation?
Fortunately, the poor return of 0.7% from an old human asset is compensated by higher investment return of 9.6%.
The Moral of the Story ...
Most human asset after 20 or 30 years of working will start to depreciate with time. Sad truth!
We may have little choice; but spend some effort and time to learn more on investing and to manage our investment portfolio to beat inflation by some percentage unless we are successful in climbing corporate ladder. The promotional salary increments and annual bonuses will be way ahead of inflation.
Two ways to beat inflation:
1) Do well in our career development and climb corporate ladder
2) Do well in our investment and climb investment ladder
Don't forget Investing Lessons From Conversation With Uncle8888 (1)
We should work hard on our Financial Assets and let them work harder for us to compensate our depreciating human asset in the last phase of our work life.
Do you have any other better ways?
Do share them.