Welcome to our podcast, as mentioned, we shall discuss further about the impact of inflation.
Inflation is real and happening today. Everything in sunny Singapore has become a lot more expensive.
Food court meals was $5 and now we have to pay $10.
The cheapest car cost almost $200,000 which is enough to buy a house in most countries.
The cheapest condo... I wouldn't even want to go there.
You get the idea, inflation has taken us by storm.
The hardest hit people are people in the lower income households and those with debt.
Interest cost is rising and if one is not careful, one might get caught with over-indebtedness.
It is very scary, it may cause bankruptcy and then all we worked for is gone.
So please be very careful with debt.
Lower income households did not ask for this but yet they will suffer. It is imperative for society and the more well-off to help.
Inflation benefits savers a lot. Because the interest earned can more than offset the rise in cost of living.
Let us discuss a simple example:
The cheapest meal in Singapore can still be $3. Not in the cities but in neighbourhood stalls. Yes, it will not taste as good but it is cheap.
It will fill the stomach and one can survive with $270 for a month. That is about $3,240 per year.
Now that we can get 3% from banks, it is possible to have some savings and the interest pays for all these meals.
The math is roughly $90,000. If you have $90,000, your interest can pay for an entire year of meals.
Although the same $90,000 cannot even buy half a car.
This is the strange world we live in now.
But to low income households, everything has changed, they don't have $90,000 in the bank and they wonder why people are driving fast cars.
It is very warped and there are no easy solutions.
Some say the solution could be war.
It is not inconceivable.
So back to the tenet of this podcast, while we earn 3-4% interest, if we can help, we should help the lower income households, in whatever way we can.
Hope you have enjoyed listening. See ya!
No comments:
Post a Comment