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Do we have to worry about inflation?
What if a hamburger costs about 20 Euro?
What if the value of hard earned money in your bank account shrinks as time passes by?
Inflation increases the price of goods, eats away your savings, and makes life difficult. It has the potential of lowering people’s purchasing power. It’s not cool to live a life where you have to pay through your nose for a candy bar. Sadly, it seems like an unavoidable fact of life, just like taxes and death.
The good news is that inflation is not a rigid law where every single item you buy becomes expensive. Many things become much cheaper as time passes by. Due to stiff competition in a market, things will drop in price and rise in quality. The recent collapse of laptop prices due to international competition is a good example.
The ever growing technology improves manufacturing process and lower production cost. Mass production and engineering procedure plus quality management make shampoo and music player affordable. Many things we buy today are much cheaper than a few decades ago – thanks to technology.
Despite the good news above, we still can’t defeat inflation easily. There are still many factors that are out of our control, such as economical conditions and mechanism of supply and demand.
I would say that inflation is not so scary, but its threat is very real. It’s wise to be prepared by managing your finances properly. Reading a few books on personal finance is a good step to begin. It’s also a good idea to adhere to “save and invest” financial strategy to keep you ahead of inflation.
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