Inflation

Inflation is a term that is often used in the financial world, but not fully understood by many people. In this blog post, you will learn about the impact of inflation on our money and, most importantly, how you can protect your finances.

What is inflation and how does it affect us?

Inflation is an increase in the prices of goods and services. This reduces the purchasing power of the currency over time. When prices rise and our money loses purchasing power over time, it means that our savings and investments are reduced in value. This can lead to financial insecurity and losses if you are not prepared.

The impact of inflation on our money:

Loss of purchasing power: Inflation increases the prices of goods and services. This means that we can buy less for the same amount of money. So our money loses purchasing power.

Decrease in the value of savings: If we keep our money in a savings or current account, it becomes worth less over time. The interest rates we receive on our deposits often cannot compensate for the rate of inflation, which causes our money to lose value.

Impact on investments: Inflation also affects our investments. If the return on our investments does not keep pace with inflation, we can suffer actual losses.

How to protect your money from the effects of inflation:

Investing in inflation-linked securities: Bonds and other securities that are linked to the inflation rate can help preserve the value of our money.

Diversification: Investing in different asset classes, such as equities, real estate or precious metals, can act as a hedge against inflation, as these assets often perform differently from consumer prices.

Investment in tangible assets: Real estate and other tangible assets often have the ability to keep pace with or even benefit from inflation.

Regularly review and adjust the portfolio: Inflation is a long-term phenomenon and it is important to regularly review and, if necessary, adjust our investments to ensure that they keep pace with inflation.