So you think inflation's bad today? Then look back, way back...
Hi! As a financial planner, I end up talking to clients about the impact of inflation several times a week.
While it is crucial that regular people like you and I learn to grow our money faster than inflation eats it up, I thought you'd enjoy this 'old' article I came across - I've been sitting on it for a fortnight now....
CNN.com - The big bang's 'smoking gun' - Mar 16, 2006: "The big bang's 'smoking gun'
Scientists say 'inflation' led to massive expansion
Friday, March 17, 2006; Posted: 10:44 a.m. EST (15:44 GMT)
(AP) -- By the faint cosmic glow of the oldest known light, physicists say they have found evidence that the universe grew to astounding proportions in less than the blink of an eye.
In that trillionth of a second after the big bang, the universe expanded from the size of a marble to a volume larger than all of observable space through a process known as inflation. At the same time, the seeds were planted for the formation of stars, galaxies, planets and every other object in the universe.
'It's giving us our first clues about how inflation took place,' said Michael Turner, assistant director for mathematics and physical sciences at the National Science Foundation. 'This is absolutely amazing.'"
I guess the next time my clients complain about how quickly things are ballooning (in price), I'll use this fun piece to help them gain some perspective. Ciao!
Warmest regards,
Rajen
Rajen Devadason is CEO of RD Book Projects and its sister company RD WealthCreation Sdn Bhd. He lives in sunny, peaceful Malaysia with his gorgeous wife Rachel. He's a Malaysian Securities Commission-licensed financial planner, a life planning consultant, a professional speaker and a serial author... which probably explains why he's so exhausted! Some of his books are available here, and, if you're interested, here are some quotations he reckons are accurate, bold or cool.
While it is crucial that regular people like you and I learn to grow our money faster than inflation eats it up, I thought you'd enjoy this 'old' article I came across - I've been sitting on it for a fortnight now....
CNN.com - The big bang's 'smoking gun' - Mar 16, 2006: "The big bang's 'smoking gun'
Scientists say 'inflation' led to massive expansion
Friday, March 17, 2006; Posted: 10:44 a.m. EST (15:44 GMT)
(AP) -- By the faint cosmic glow of the oldest known light, physicists say they have found evidence that the universe grew to astounding proportions in less than the blink of an eye.
In that trillionth of a second after the big bang, the universe expanded from the size of a marble to a volume larger than all of observable space through a process known as inflation. At the same time, the seeds were planted for the formation of stars, galaxies, planets and every other object in the universe.
'It's giving us our first clues about how inflation took place,' said Michael Turner, assistant director for mathematics and physical sciences at the National Science Foundation. 'This is absolutely amazing.'"
I guess the next time my clients complain about how quickly things are ballooning (in price), I'll use this fun piece to help them gain some perspective. Ciao!
Warmest regards,
Rajen
Rajen Devadason is CEO of RD Book Projects and its sister company RD WealthCreation Sdn Bhd. He lives in sunny, peaceful Malaysia with his gorgeous wife Rachel. He's a Malaysian Securities Commission-licensed financial planner, a life planning consultant, a professional speaker and a serial author... which probably explains why he's so exhausted! Some of his books are available here, and, if you're interested, here are some quotations he reckons are accurate, bold or cool.
posted by Rajen Devadason at 1:56 AM
2 Comments:
Dear Jane,
Great to hear from you. You are correct in saying that we need to be wise in managing our money.
Actually, the reason that is especially important now is that our lifespans are actually creeping up, not down, because of better understanding, diet and healthcare.
This means we are looking at longer periods in retirement, unless our retirement age is pushed out into the future and we thus end up working longer. Personally, I think this would be a good thing.
However, I won't go into that here. Another issue that this raises is how to sustain better-than-inflation growth rates during a long retirement. I believe the answer lies in carefully adjusting asset allocations within portfolios at different stages of retirement.
Do write back and let me know if you have any further questions.
Warmest regards,
Rajen
Dear Jane,
You are right. The only two choices people hit with inflation truly have are to cut back on their expenses and find ways to bring in more money through harder work.
There aren't any other legal and ethical ways to improve cashflow in the short-term. The good news is that if you manage your cashflow well in the short-term, consistently, over the long-term your financial situation will improve from growing passive income.
Great points. Thank you. Keep the great questions flowing.
Warmest regards,
Rajen
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