Stay Ahead Of Inflation
Aside from reaching your financial goals, investing can assist you in staying ahead of inflation. The tendency for money to depreciate over time is known as inflation. It gauges the rising cost of living by referring to the gradual increase in the price of goods and services.
The slowly rising inflation rate has reduced many OFWs’ salaries over the previous few years. Investing your money is a technique to attempt and stay ahead of inflation, although no investment can guarantee a return. Ideally, your return will beat the rate of inflation.
Simply put, assume that the inflation rate is currently 2%. If your portfolio generated a return of 7%, your real return would be 5%. For comparison, over the previous 90 years, the S&P 500 index’s average yearly return was a little under 10%. Your money would stay well ahead of the inflation rate if you invested it in a fund that follows that index.