Personal Inflation Rate

This is perhaps a more important measure for comparing if your income increment matches your desired lifestyle.
Example, it really does not help if the overall reported annual inflation rate is 3 percent but you choose to obtain hire purchase for a more luxurious car every year. Your monthly commitment will increase, hence the income increment is quickly negated in this case. Then again, a vehicle is still a liability instead of an asset, we are knew that. Not a very smart money decision in personal finance. You will run into money issues and financial difficulty sooner or later if you persist with this lifestyle.
In a nutshell, personal inflation rate largely depends on the type and amount of your expenditure. Live modestly is my motto. I could have easily upgraded to a smartphone, just for the pleasure of it but no thanks, unless my good old Nokia stupid phone goes kaput, I do not think I need a new handset for now 🙂

12 thoughts on “Personal Inflation Rate”

  1. Yea, Wilson I got what you mean 🙂 It’s a “don’t know what I don’t know” scenario. Which is ok, even I have a lot to return. But don’t let Analysis Paralysis get in the way – means, too much learning until fail to take action.

    Take some action to apply what you learn and see it works. Start small though. Small victories will build confidence as you progress. THAT itself, is a learning experience.

    Yes, you ask, I reply, no problems. Although sometimes it takes a while if I am on other projects.

  2. Hi Wilson..the very basics…
    1. Learn about the foundation of investing. Example, no one, I mean, not even fund manager can guarantee you any return. If you are subscribed to my newsletter, that’s a good start to be slowly be surely financially literate 🙂
    2. Beware of your sales charge. If you invest in equity fund with 6% sales charge, you already “lose” RM 60 out of RM 1000 invested instantly. Take this into account, and not what your UTC show you with all the marketing brochure, etc. Good UTC will tell you this anyway.
    3. Here’s some homework – know the difference between equity/balanced/bond funds.

    I’ll be happy to answer your further queries here 🙂

    p/s – in any investment, the most risky part is not knowing about what you invest in. The inherent risk in the investment itself only comes second.

    1. Hi LCF,

      Thanks for the tips !! I may as well aware of the 1st and 2nd point, for the 3rd point ; do you mean that equity tend to be more aggressive because most of the fund invested in stock market. While balanced fund 50% in stock market 50% in bond fund, and for bond it tend to be more conservative and low volatility, am I right?

      I heard many investor talking about “you have to know what you’re investing”, the problem is “I don’t know what else do I need to know”. What I mean is you don’t really know are yourself really did enough homework for that investment. Hope you get what i mean (-_-;)

      p/s : Is this the place for queries? because I have a lot! 😀 hope you don’t mind. Really appreciate your reply a lot !!

  3. Hi Wilson, yes. Ignorance is bliss and it’s too high of a price to pay. The only exception, perhaps, is he is invested in the same portfolio as you. Passive investor does not mean you just invest and forget. It’s more crucial to be a responsible and smart passive investor, which means you don’t need to see your stock or fund price movement everyday. But, you need to know how the fund is doing. And the real manager of your investment is NOT UTC, but the fund manager. What fund manager does with your money is much more important. This can only be known from the fund’s quarterly factsheet or annual report.
    Why is this so important even if you want to be passive in your investment? Read this –

    1. Hi LCF, after reading your words I feel myself not so safe when putting my money with UTC anymore. It’s good if you write an article about strategy to invest in UT for newbie like me :D, just my suggestion anyway 😛 Thanks for your advice.

  4. I invest almost 70% of my monthly salary income into investment(UT) so that I won’t spend the money, but I don’t know is that safe for me? Or my future.

    1. Hi Bump, it is difficult to answer general questions as such 🙂 But I can only thing of this : First, is the unit trust fund you invest in matches your risk profile? and Second, do you understand what business or companies of these funds? Answering No to both spells danger.

      1. Hi LCF,
        If you are a passive investor and you let your unit trust consultant to manage for you do you still need to worry about that? First question’s answer is Yes but second question I doubt my answer. I know the company but I don’t know what else I need to know 🙁

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