If you are a Canadian and have worked for ten years or more, you know that your income buys less today than the first year of your career. Inflation is part of our society and if our government continues to devalue our money by printing more and more of it, inflation will undoubtedly continue. It is not just a Canadian concern. All over the world, people are feeling the effects of inflation due to excessive money printing; but more on that another time. The long and short of it all is this: YOUR MONEY WILL CONTINUE TO BUY LESS over the years.
A quick 100-year calculation using the Bank of Canada’s (BoC) inflation calculator showed that the cost of a fixed “basket” of consumer purchases in 1915 was $ 100. At the end of 2015, this cost was $ 2,083.61. More recently, over the past 10 years, prices have increased by 18.01%. Has your income increased the same or more?
The answer is probably no.
Whether you are a six-figure winner or earn 30,000 a year, your “money” is losing purchasing power. There are many ways to protect your money from devaluation, but we’ll discuss two common options that people choose.
One option is the stock market; put an amount of your savings in a wallet and see what happens. It sounds like gambling to me. But if you are willing to leave your finances to other factors (and people) other than your own due diligence, then investing your money in stocks may be right for you under two conditions:
You have the stomach for volatility and,
Your main goal is to see a substantial return in a short period of time … hopefully.
Another option, which tends to be the easiest and most chosen, is to open a bank savings account. No hassle involved; Simply open the account, decide how much you want to save and how often, put it on autopilot and watch your savings grow.
In today’s economy, bank savings accounts are not a viable savings vehicle. Most of the interest rates offered are lower than the inflation rates. The sad reality is that many savers make a future withdrawal only to find that they lost money after inflation.
So what do you do if you are not a sophisticated investor?
Buy financial insurance.
We have insurance for almost every aspect of our life, but insurance is something that many of us hope we never have to use.
Buying financial insurance in Canada, or elsewhere for that matter, is putting your money in a vehicle that is protected for the long term from the ups and downs of a volatile economy.
Purchasing financial insurance preserves your purchasing power and offers hedging against inflation.
The global economy is changing, but the only economy you should be interested in is your own.
As an independent insurance advisor and income protection specialist for nearly a decade, Ryan provides clients with personalized personal and financial insurance solutions through disability, life, critical illness, long-term care and other personal insurance products while offering income coverage strategies. and preserve wealth.
Article Source: http://EzineArticles.com/9279552