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3 Ways to Beat Inflation



Most of us are aware of the economic term “inflation”. It is the general increase in prices and fall in the purchasing value of money. Every year, you hear that the prices of food, transport, travel or education have become more expensive than ever. Do you ever wonder how you will be able to keep up with this? In Singapore, the inflation rate is currently estimated at 2% every year! Thankfully, there are ways to beat inflation, and we’re here to show you how!

Bonds

Bonds are referred to as fixed income instruments since they typically pay a fixed interest rate to debt holders. Bonds such as the Singapore Savings bonds, are safe instruments to put your money in to beat inflation. Based on past year statistics, it has been shown to beat inflation at the end of the 10 year mark.

Stocks

Stocks are also another way to beat inflation. You need to do your own research, and based on those findings, justify the stock chosen. A lot of time is devoted to understanding the stock market, as it is more intricate based on many factors such as the company’s current performance and future outlook. Stocks are able to beat inflation by growing your investments for the long run but can also carry a higher level of risk as compared to bonds. If you are a beginner, you can seek advice from banks or through financial experts.


Endowment Insurance

Endowment insurance has the element of savings and protection in an insurance policy. The duration of the policy is period specific, and not for the rest of your life. There is a savings element as the policy will tap onto investment.

Endowment policies help to beat inflation because a portion of the premiums paid will be invested over the policy period to generate more money thus providing higher potential for returns. Endowment insurance also protects you by covering death, total permanent disability and critical illness (based on policy terms). You can seek a financial advisor for more information on the plans available on the market!


Resources:

Singapore savings bonds:

https://www.dbs.com.sg/personal/investments/fixed-income/savings-bond?pid=sg-tre-pweb-wealth-feed-others-beat-inflation-singapore-textlink-savings-bond

Beat Inflation: https://www.dbs.com.sg/treasures/articles/wealth-feed/beat-inflation-singapore

Endowment: https://dollarsandsense.sg/the-pros-cons-of-buying-an-endowment-plan-in-singapore/

Criteria for stocks: https://www.cnbc.com/2018/09/18/5-criteria-to-consider-when-selecting-stocks.html

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