Inflation Impact

Inflation has a positive impact and negative effects, depending on whether or not inflation worse. If inflation is mild, it has a positive influence in terms of stimulating the economy could be better, ie increasing the national income and get people excited to work, save and make investments. Conversely, in times of severe inflation, which in the event of uncontrolled inflation (hyperinflation), the situation became chaotic and the economy experienced sluggish economy. People are not excited about working, saving, or hold investments and production due to rapidly rising prices. The fixed income earners such as civil servants or private employees and workers will be overwhelmed and the balance to bear, so the price of their lives became increasingly fell and fell from time to time.

For people who have fixed income, inflation is very harmful. We take the example of a retired civil servant in 1990. In 1990, pension sufficient to meet the needs of life, but in the year 2003, or thirteen years later, the purchasing power of money may be only a half. This means that pension is no longer sufficient to meet the needs of life. Conversely, people who rely on income based benefits, such as businessmen, not impaired by the existence of inflation. So it is with employees who work in companies with salaries following the inflation rate.

Inflation also causes people reluctant to save because of the currency goes down. Indeed, savings earn interest, but if the inflation rate on the interest, the value of money is still declining. When people are reluctant to saving, investment and would be difficult to develop. Because, to grow the business needs of the bank funds obtained from public savings.
For people who borrow money to the bank (debtor), inflation beneficial, because at the time of debt payments to creditors, the value of money is lower than at the time of borrowing. Instead, creditors or parties who lend money will incur a loss because the value of money returns lower than at the time of borrowing.

For producers, inflation can be beneficial if the income is higher than the increase of production costs. When this happens, producers will be forced to double its production (usually happens in big business). However, when inflation led to rising production costs in the end harm producers, the producers are reluctant to continue production. Producers could cut production for a while. In fact, if not able to keep pace with inflation, the producer of business may be bankrupt (usually occurs in small businesses).

In general, inflation can result in reduced investment in the country, encouraging higher interest rates, encouraging investment is speculative, the failure of development, economic instability, balance of payments deficits, and deterioration of living and welfare.

Inflation

Inflation can be defined as the tendency of rising prices of goods and services generally held constant due to unequal flow of goods and the flow of money.

From this we can see the condition of a country that is experiencing inflation, namely:

1. Prices of goods in general will rise continuously
2. The money supply exceeds demand
3. Value for money has decreased

In economics, inflation is a process of rising prices in general and continuous associated with the market mechanism can be caused by various factors, among others, increased consumption or a lack launch distribution of goods. In other words, inflation is also a process of decline in currency values on a continuous basis.

Inflation is the process of an event, not the high-low price level. That is, the higher price is not necessarily considered to indicate inflation. Inflation is considered occurs when the price increase took place continuously and mutually interact. The term inflation is also used to mean increased supply of money in what is sometimes seen as a cause of rising prices. There are many ways to measure the rate of inflation, the two most commonly used is the CPI and the GDP deflator.

Inflation can be classified into three groups, namely inflation mild, moderate, severe, and hyperinflation. Mild inflation occurs when prices are below the 10% a year; inflation was between 10% -30% a year; weight between 30% -100% a year; and hyperinflation or uncontrolled inflation occurs when prices rise above 100% a year.

PYRAMID FINANCIAL Investment Options

What are my options for investing the hell, what a place other than the investment banks that can provide returns higher? In general, people want to invest from the top of the pyramid to get profit as much as possible. This is a big mistake, because all have to start from zero, from below.

Pyramid Financial

5. Speculation

Levels of speculative investment is very high and very risk both owned only by people who have done steps 1 to 4 below.

4. STOCK BLUE CHiPs

Blue Chip stocks are stocks that move 90% of the performance of capital markets. Shares proven PUBLIC GO can provide for high results.

3. REKSADANA

Investment risk will be spread by someone who called the Fund Manager. The funds we invest will be managed by the Fund Manager to several types of larger investments such as stocks, bonds and money market or a mixture of all three.

2. SAVINGS & bank deposits

A very low risk, use this instrument as a reserve fund that can be accessed at any time with ease. Back Up 3 - 6 months expenses in this account. So the only advantage here is investing transaction flexibility.

1. Life insurance policy

Financial protection from early death families that can help the family to spend: Hospitals, funerals, and family needs after the funeral.

Provide emergency funds if needed

Guarantee Pension

Most people will depend on income and investments in points 2 to 5. People would be proud of their cash machines to guarantee their future lives, but who will ensure that this money machine will work properly, or cash machines themselves have suffered critical illness or death. Is this money machine still works to guarantee the survival of his family to eat, etc. school. Difficult huh?

Let's try teller returned the financial pyramid sequence have, musty missed a step?

Happy investing!!

Advice Family Finance

In the language of the family finances, "time is money". If you postpone financial decisions that must be taken then it can damage you but if you do it early, it can give welfare. Is that it? All decisions in your hands.

Ric Edelman, a reliable financial planner from the United States, mentioned in his book titled The Truth about Money, at least there are four major issues that make people fail to create a prosperous life as they expect, namely:

1. Attitude procrastinator;
2. The habit of spending;
3. Inflation continued to increase; and ...
4. Taxes

The first two things mentioned Edelman is more a matter of personal / private, while two other things can be said as a matter of "social". Or can also be said that the first two barriers are factors "internal", while the other two are "external".

Factor "internal" must be addressed and resolved at the personal level. Attitude procrastinator financial planning is the main factor not achieved prosperous life in the future. Financial planning to postpone the costs of preparing the children's education, for example, can have a bad impact when viewed in the long run. As a result, the children who we love just might lose the opportunity to enjoy the learning process in the institutions of good quality due to limited funds. In terms of preparation as well as pension funds. Those who did not prepare well in advance - ideally within the period 30-40 years before retirement is - may be troubling the other party (whether family or government) in the future.

In contrast to the factors "internal" which is more of a personal responsibility, factors “external” related to social and economic conditions of a country? Not many people can affect the rate of inflation and dealt with the issue of taxation in a country. This is influenced by many factors poleksosbudhankam very complex which can even exceed the ability of a government because of the relationships in scale until the international regional-global. Which might be performed by individuals in overcoming this is to anticipate the various possibilities that will come up with interesting lessons from past history. This means that, although inflation and taxes we can not control, but we still can determine the personal attitudes toward these things.

Expensive costs to be paid!
Time is the biggest factor in determining the value of money. You name it, you save Rp10 million at 8 percent per annum / net. Within one year of course you would expect the value of your investment will be greater than or worth Rp10 million grew into Rp10.800.000. If you save it under a pillow, then the value of Rp 10 million will still be worth Rp10 million a year. In fact, probably less because of inflation.

The most important findings in the financial history is compound interest (compound interest). The principle of compound interest is, the interest generated from investments will be added back to the initial investment and interest back. So the results you get in the years to come not only from the initial investment you place but also from interest earned for the money invested.

Let's look at the actual calculations. Like the example above, if you're saving for Rp 10 million at 8 percent per annum / net. One year to the next value grow Rp10.800.000. You continue to invest. Once the second year running, then you will get another 8 per cent profit, but not from the value of Rp 10 million but the value of Rp10, 800,000 or at the end of the second year you will investment  values increase to Rp11, 664.000. The longer the investment period the value of your investment will also increase in line with interest rate calculations.

Whatever rate you get from investments made, the time will provide the level of extraordinary returns. But with interest rates higher by one point only, the value of which may be obtained profit would be much increased.

25-year-old Turiji, Yudi 35 years, and Efriyaldi 45 years. For their retirement is 55 years old. See the development of investment they do every month a number of Rp1 million with an interest rate of 8 percent. In real life, the tax impact and reduce the amount of benefit that you can get.

It was clear from the table above; the price to be paid due to delay is very expensive habit. If you delay 10 years (your current age 25), with an investment value of Rp 100 million and the assumption of 6 percent interest, at the age of 55 years, you only get funds around Rp320 million. If not you can get a delay of about Rp574 million.

Pension Insurance

Come meet with pension insurance. What the pension insurance? Pension insurance is a type of insurance that provides certainty the availability of Pension Funds / Fund Old Days later, while on the way to save or invest there is a risk that happen. Perhaps in the minds of you wonder why this insurance can provide certainty the availability of funds the future retirement time.

This is because the pension insurance protection exists facilities and benefits, ranging from illness and Hospitalization, surgery, accident and critical illness, the more there is STOP SAVING facility (when there is a critical illness) and savings of this insurance will be continued until the age of 65 year. So that the funds you prepare for retirement is always available when retirement comes.

Do I have to have this insurance ..? Yes, you must have this insurance, because with this insurance you have to prepare your future with a good, not only that, but with a pension plan you also have to provide certainty on the availability of funds, your spouse (husband or wife) later on, you also will still be enjoying the lifestyle as they have not retired. You also can give a gift or something that makes you smile funny grandchildren. Was not happy with such circumstances. So do not delay for this to have pension insurance.

With this pension insurance means you also have to prepare your Pension Safe, Comfortable and Prosperous ... not fun ..? Because a happy future without thinking about the financial problems was the dream of every person. Been eating prepared for it now.

Maybe now you already know about this pension plan, but confused how to choose or start a insurance program that's right for your future retirement plans. You really do not need confused, because I will help you to provide solutions to your needs that will make happen. You also can consult with me for free. You simply contact me via hp or email, I will gladly response.