This podcast was first recorded for 8percentpa.substack.com during the end of November.
We discussed the impact of global inflation and its impact to our portfolio and also our lives. he link is as follows:
Please see the transcript below:
Welcome to the second podcast on 8 Percent Substack. Thank you for listening and we hope to provide you with insights to help you manage your personal finances.
In this podcast, we will discuss the impact of global inflation to our portfolios and our lives. Most of us would not remember inflation because it did not happened in a big way since the 1990s until 2021-2022 which is about 2 years ago.
Prices of products and services have been kept low as China was making everything cheaply and exporting them. Toys, clothes, everything!
Some corporate services such as IT management and call centres were also being exported out of India.
And lastly migrant workers have also kept service costs low. They worked hard as waitresses, hairdressers, security guards. Thank you!
In sunny Singapore, we did have inflation but it was by and large manageable.
But, things changed dramatically during the pandemic and is now further exacerbated by wars, rent and salary inflation.
The pandemic disrupted global supply chain and caused prices to increase in a big way. The Russia-Ukraine war then caused energy prices to spike and now with another war in Gaza, we will see further disruption.
In sunny Singapore, rent and wages are spiralling up. When rent goes up and wages go up, businesses need to charge consumer more, this means things will get even more expensive.
The saving grace is that cash can also earn interest today as the US Fed has been raising interest rates to tame inflation.
Since Singapore largely follows the US, we are seeing our fixed deposit rates and Treasury Bill rates going up.
$100 invested in Singapore Treasury Bills earns almost 4% interest today.
People who have saved money can benefit tremendously from this. We were taught to save up in school.
Remember the adage: Save Up For Rainy Days.
This is now really helping, albeit in a different way!
At the same time, people with a lot of debt and lower income households are experiencing hard times. It is not easy for them.
Another old adage comes to mind, always be prudent because sometimes it doesn't just rain, it pours.
In the next podcast, we shall discuss more on this!
Thank you for listening. See ya!