Inflation – The number 1 financial threat to Expats in Singapore
9 February, 2023
As an Expat living in Singapore, you might have experienced the joys of a high standard of living, amazing food, and a bustling city life. But have you ever thought about the silent threat that creeps in, slowly eating away at your hard-earned savings? We’re talking about inflation, folks!
Inflation is when the prices of goods and services increase over time. It’s like a sneaky thief who sneaks into your wallet and steals a little bit of money each day. For example, let’s say you buy a coffee for $3 today. A few years down the line, that same coffee might cost you $4. And that’s just a small example. Think about all the things you buy on a daily basis, and imagine their prices slowly increasing over time. Yikes!
Lets say you have $100,000 and the inflation rate is 8% per year (Australias current inflation rate), after 10 years the value of $100,000 will decrease to $43,794 in terms of purchasing power. That’s a $56,206 loss! And it just keeps going down from there!
But why does inflation occur? Well, it’s a complex issue, but one of the main reasons is an increase in demand for goods and services. When there are more people wanting to buy the same thing, the prices go up. And as you might already know, Singapore is a bustling city with a high demand for everything. So, inflation is a constant threat here, especially with the cost of rent and children’s education.
So, what can you do to protect yourself from inflation? Well, here are a few tips:
- Invest in assets that have the potential to grow in value, such as stocks, real estate, or bonds.
2. Keep your expenses low and try to save as much as you can.
3. Consider getting a side hustle or finding a way to increase your income.
In conclusion, inflation is a silent thief that can have a significant impact on your finances. But with a little bit of planning and effort, you can protect yourself and your savings. So, don’t wait, start taking action today!
Book a complimentary consultation with Expat Financial Advisor Sean Abreu by filling in the below form.