A Salary Hedge

I got my sixth payout last week. So far the HYIP has been doing as promised, delivering payout after payout. Again, I am seeing for myself why the rich is getting richer. There are those who can afford to take the risk. There are those who cannot afford to do so.

I remembered a time when, even those I got salary increments, the amount of real money I get is constantly going down - because the cost of living outpaces my salary increases. I used to be paid in USD, but spent in RMB and paid loans in SGD. It was extremely painful watching the USD slide back in 2004-2010, wiping out my minor increases of a hundred or so USD each year. It was also a time when a bowl of noodles rose from RMB6 to RMB10, and groceries rose from RMB100 a week to RMB200. It was crazy then.

Even right now, here in Singapore, where many of my peers are getting paid in SGD and spending in SGD, we see the costs of living outpacing our salary increments every year. In fact, some of my friends have not received salary increments for a year or so and are grateful to still keep their jobs.

In times like these, getting USD110 each month for an investment of USD1300 means one effectively gets an inflation hedge built in, for a risk profile similar to that of buying a lot of mid-range stocks (in this turbulent times?) or perhaps buying the lottery 1300 times. USD1300 is effectively a small holiday to forgo, for a salary hedge against inflation and security of the future.

Financial literacy is a very important part of life, and we cannot go through life just depending on the economy, our salary and our employer's whims and fancies.

To find out more about Sensei Michael’s latest investments, please Contact Sensei Michael.

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