Comments on: How to Fight Inflation http://www.millionaireacts.com/1859/how-to-fight-inflation.html Escape the Rat Race and Join My Journey to Financial Freedom Fri, 03 Feb 2012 15:10:49 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Romel Verterra http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-41979 Romel Verterra Tue, 12 Jul 2011 01:08:45 +0000 http://www.millionaireacts.com/?p=1859#comment-41979 In case you want to approximate inflation rate in your own way, here is how I did it. The result will not be the overall inflation rate but at least we have some idea. Take for example the price of rice. In year 2000, the rice is about P22/kg, now it is about P37/kg. Using the formula for compounded interest F = P (1 + i)^n where n is the number of compounding, in this case, number of years. From 2000 to 2010, n = 10 years. 37 = 22(1 + i)^10 using your scientific calculator, i = 5.34% is our approximate inflation rate for rice. In the same manner, you can also compute the inflation rate for the price of gasoline, jeepney fare, tuition fee, etc. In case you want to approximate inflation rate in your own way, here is how I did it. The result will not be the overall inflation rate but at least we have some idea.

Take for example the price of rice. In year 2000, the rice is about P22/kg, now it is about P37/kg.

Using the formula for compounded interest F = P (1 + i)^n where n is the number of compounding, in this case, number of years. From 2000 to 2010, n = 10 years.

37 = 22(1 + i)^10 using your scientific calculator, i = 5.34% is our approximate inflation rate for rice.

In the same manner, you can also compute the inflation rate for the price of gasoline, jeepney fare, tuition fee, etc.

]]> By: Tyrone http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6925 Tyrone Wed, 18 Nov 2009 23:02:00 +0000 http://www.millionaireacts.com/?p=1859#comment-6925 Yeah, he mentioned before that he has been here in the Philippines some 20 or 30 years ago. I love to see US too. Good to see you here btw. :) Yeah, he mentioned before that he has been here in the Philippines some 20 or 30 years ago. I love to see US too. Good to see you here btw. :)

]]> By: The Digerati Life http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6923 The Digerati Life Wed, 18 Nov 2009 22:54:48 +0000 http://www.millionaireacts.com/?p=1859#comment-6923 Wait a sec. FS knows Henry Sy? ;) Geez, small world. What about Lucio? lol. Wait a sec. FS knows Henry Sy? ;) Geez, small world. What about Lucio? lol.

]]> By: Travis http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6922 Travis Wed, 18 Nov 2009 22:19:33 +0000 http://www.millionaireacts.com/?p=1859#comment-6922 Good info. The best thing to do in my opinion is find a means of achieving a secondary income. Maybe not a "job" per se, but a means of fighting off additional costs you may be encountering. Good info. The best thing to do in my opinion is find a means of achieving a secondary income. Maybe not a “job” per se, but a means of fighting off additional costs you may be encountering.

]]> By: Tyrone http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6559 Tyrone Mon, 09 Nov 2009 14:41:02 +0000 http://www.millionaireacts.com/?p=1859#comment-6559 Hi Wilde, I think you can get the annual inlfation rate in BSP (Central Bank). I think most likely, yields of mutual funds will surpass the inlfation rate. For the yields of mutual funds, I would recommend you to visit their website: http://www.icap.com.ph Go to mutual fund 101 and go to facts and figures. You would find the individual returns of each mutual fund there. Hi Wilde, I think you can get the annual inlfation rate in BSP (Central Bank). I think most likely, yields of mutual funds will surpass the inlfation rate.

For the yields of mutual funds, I would recommend you to visit their website:

http://www.icap.com.ph

Go to mutual fund 101 and go to facts and figures. You would find the individual returns of each mutual fund there.

]]> By: wilde http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6555 wilde Mon, 09 Nov 2009 14:15:07 +0000 http://www.millionaireacts.com/?p=1859#comment-6555 Guys, you know where to find the annual inflation rate here in the Philippines? I'm considering to invest in mutual funds, would like to know if the probable return is more than the inflation rate. Thanks! Guys, you know where to find the annual inflation rate here in the Philippines?

I’m considering to invest in mutual funds, would like to know if the probable return is more than the inflation rate.

Thanks!

]]> By: Rian http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6501 Rian Sun, 08 Nov 2009 07:45:35 +0000 http://www.millionaireacts.com/?p=1859#comment-6501 Statistically speaking, no one can control or fight inflation. it is the natural economic process that is related to so many things. what we can do is to earn more. That's it. Statistically speaking, no one can control or fight inflation. it is the natural economic process that is related to so many things. what we can do is to earn more. That’s it.

]]> By: Frank Tremas http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6452 Frank Tremas Fri, 06 Nov 2009 22:44:43 +0000 http://www.millionaireacts.com/?p=1859#comment-6452 In your article you write to combat inflation by taking an extra job and by investing cash. But I think most people will not have the luxury of doing so. Therefore in my opinion most people will have to do plain cost cutting. In your article you write to combat inflation by taking an extra job and by investing cash. But I think most people will not have the luxury of doing so. Therefore in my opinion most people will have to do plain cost cutting.

]]> By: dlysen http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6444 dlysen Fri, 06 Nov 2009 17:48:27 +0000 http://www.millionaireacts.com/?p=1859#comment-6444 Your girlfriend, the more you love your girlfriend the more value it become. Your girlfriend, the more you love your girlfriend the more value it become.

]]> By: Financial Samurai http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6434 Financial Samurai Fri, 06 Nov 2009 13:23:02 +0000 http://www.millionaireacts.com/?p=1859#comment-6434 BINGO! Assets ie property are the end product as to WHAT inflates. On the flip side, I still don't see any inflation in the US, that's why I wrote my "A Weak US Dollar Doesn't Matter Folks!" post. Ayala Land? Must be a rich family too right? I'm SURE they are hoping for inflation. BINGO! Assets ie property are the end product as to WHAT inflates.

On the flip side, I still don’t see any inflation in the US, that’s why I wrote my “A Weak US Dollar Doesn’t Matter Folks!” post.

Ayala Land? Must be a rich family too right? I’m SURE they are hoping for inflation.

]]> By: Tyrone http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6433 Tyrone Fri, 06 Nov 2009 13:18:05 +0000 http://www.millionaireacts.com/?p=1859#comment-6433 I think I got your point. In times when inflation rate is rising, it's better to divert from cash because inflation depreciates its value more than, say, property as an asset. So, when talking about rising inflation rates, definitely, cash is NOT king. Did I get it now? :) I think I got your point. In times when inflation rate is rising, it’s better to divert from cash because inflation depreciates its value more than, say, property as an asset.

So, when talking about rising inflation rates, definitely, cash is NOT king. Did I get it now? :)

]]> By: kenyantykoon http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6432 kenyantykoon Fri, 06 Nov 2009 13:12:04 +0000 http://www.millionaireacts.com/?p=1859#comment-6432 inflation is an investor's worst enemy. What makes it worse is that it is unseen and thus harder to combat. Also to combat it, there are quite a large number of inflation protected investments that a person can take shelter in inflation is an investor’s worst enemy. What makes it worse is that it is unseen and thus harder to combat. Also to combat it, there are quite a large number of inflation protected investments that a person can take shelter in

]]> By: Financial Samurai http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6431 Financial Samurai Fri, 06 Nov 2009 13:10:48 +0000 http://www.millionaireacts.com/?p=1859#comment-6431 Tyrone - You basically agreed with me :) What is money but a piece of paper to use to buy something with. The REAL wealth are THINGS. And one of the greatest things is property! Assets = wealth.... cash is an asset, but is just a means. You talk about input cost inflation. Bingo. Higher input costs, higher end product prices. That's inflation. Think about the Sy family and SM Prime Holdings. Property accounts for a majority of their assets, and Henry is a billionaire. If Henry ever comes to the states to meet investors, I'll tell him "hi" for you! :) FS Tyrone – You basically agreed with me :)

What is money but a piece of paper to use to buy something with.

The REAL wealth are THINGS. And one of the greatest things is property! Assets = wealth…. cash is an asset, but is just a means.

You talk about input cost inflation. Bingo. Higher input costs, higher end product prices. That’s inflation.

Think about the Sy family and SM Prime Holdings. Property accounts for a majority of their assets, and Henry is a billionaire. If Henry ever comes to the states to meet investors, I’ll tell him “hi” for you! :)

FS

]]> By: Tyrone http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6429 Tyrone Fri, 06 Nov 2009 13:00:56 +0000 http://www.millionaireacts.com/?p=1859#comment-6429 Hmmm.... Nice comment BUT I have some objections... From what I understand, you're telling that there is a direct relation of inflation and property value. That is, if inflation rate increases, property value also increases. I understand that when inflation rate rises, the value of properties, most probably the house built (building value)may increase its value especially if the prices of raw materials used in construction such as cement, wood, etc. rose. For the land itself, I'm not sure how these would be affected by inflation. From what I know, a land's value may increase subject to its location and conversion of land type (i.e. from agricultural to residential or commercial) Furthermore, I think the law of supply and demand still plays on this issue because however high inflation rate is, if there is no demand for properties (i.e. recession where there is a credit tightening and demand is low), then it's price won't go up. Tell me what you think... Hmmm…. Nice comment BUT I have some objections…

From what I understand, you’re telling that there is a direct relation of inflation and property value. That is, if inflation rate increases, property value also increases.

I understand that when inflation rate rises, the value of properties, most probably the house built (building value)may increase its value especially if the prices of raw materials used in construction such as cement, wood, etc. rose. For the land itself, I’m not sure how these would be affected by inflation. From what I know, a land’s value may increase subject to its location and conversion of land type (i.e. from agricultural to residential or commercial)

Furthermore, I think the law of supply and demand still plays on this issue because however high inflation rate is, if there is no demand for properties (i.e. recession where there is a credit tightening and demand is low), then it’s price won’t go up.

Tell me what you think…

]]> By: Financial Samurai http://www.millionaireacts.com/1859/how-to-fight-inflation.html#comment-6428 Financial Samurai Fri, 06 Nov 2009 12:00:20 +0000 http://www.millionaireacts.com/?p=1859#comment-6428 Glad you're touching upon inflation Tyrone, as we had a fun time talking about why a weak US Dollar doesn't matter over at my site. The absolute BEST way to tackle inflation is to take on a TON of debt to buy an asset! If inflation is coming, buy property b/c it will by definition INFLATE higher! MEanwhile, your debt gets inflated away since it's fixed. Inflation is a beautiful thing! Glad you’re touching upon inflation Tyrone, as we had a fun time talking about why a weak US Dollar doesn’t matter over at my site.

The absolute BEST way to tackle inflation is to take on a TON of debt to buy an asset! If inflation is coming, buy property b/c it will by definition INFLATE higher! MEanwhile, your debt gets inflated away since it’s fixed.

Inflation is a beautiful thing!

]]>