Have you ever wondered why the cost of a Coconut has raised from Rs.20 to Rs.30 in a span of two months. Okay, don't think too much. Today I would like to bring in the concept of Inflation which acts as a main reason behind the price hike.
Inflation is nothing but continuous increase in price of goods and services in a country. With the increase in inflation, the power of the currency decreases.
Inflation happens mainly due to two reasons.
- When the demand for the good or service is more than the supply.
- The cost of production increases with increase in wages, raw materials etc. which in turn increases the cost of goods and services.
An investment should be in such a way that it gives you higher interest rate overcoming the inflation factor. So think wisely and make your investment in such a way where you are yielded with highest benefits.
Exactly my point ! You have to be given a basic 6% hike every year for the same work / role that you do in your org just to meet the inflation. And promotion and hike should only go beyond that . What do you say , IBT?? :)
ReplyDeleteExactly, but in reality things happen in a different manner.
DeleteThen how should one invest could you give more information and example of how to invest that it will eventually beat inflation
ReplyDeleteHi Sai,
ReplyDeleteIt's always a good habit not to put your all your eggs in a single basket. Here what I'm trying to convey is you need to diversify your investment so that even if one goes down the rest will move your index up. This is one way by which you can match and eventually beat the inflation. Soon in my posts I'll try to come up with these things