What Is The Effect Of Inflation?

This is a Php 2,199.00 grocery.

Few years from now, the same budget can afford only 1 bag.
This is called INFLATION. It's the rate of increase in the prices of commodities. It causes the value of money to decrease over time.

If inflation rate is 6% per year (average), this is the possible effect:

° your bank savings loses value
° your cash in your safety cabinets loses value
° your income loses value
° college tuition fee may double in 12 years
° medical cost may double in 12 years
° government pension may not be enough
° overhead cost can eat up your profit (business)

We can't control the prices of commodities, but we can control how we manage our income, how much goes to savings and where to invest our hard-earned money.

Let's Prosper Together,

Lorenzo Leonardo, AFP®