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FireIce SG

Clueless about insurance? You're not alone. 60 women (in their 20s and 30s) told us their biggest quandaries about managing their insurance policies, and we spoke to the experts to find out what are some easy rules to follow. Turns out, once you get your head straight on the facts, it's more straightforward than you think.

Should I stick to just one insurance company?

Every insurance company has different strengths. By getting all your plans from one company, you could be shortchanging yourself, says Ng Si Hui, an associate manager at Ray Alliance Financial Advisers. So diversify. Another tip: Everyone has an opinion on which companies offer the best solutions. But what’s good for one person might not work for someone else, because of multiple factors like health, age and lifestyle. So cut the noise by first figuring out what you need, then doing your homework.

Also, don't push your insurance plan to the back of your mind after buying in. Check in with your financial adviser once a year, and definitely at every key life event (like when you get married or have a baby. Come up with updates on your assets, liabilities, cash flow and new financial goals. It'll help your adviser assess whether your plan needs to be updated to suit your lifestyle.

Is my company medical insurance enough?

If you’re relying solely on your company medical insurance, you should get more. First up, the coverage is likely to be pretty basic (consultations with a general practitioner, and perhaps hospitalisation fees), and there’s a limit to how much you can claim.

Then there’s the issue of how confident you are about staying with this company for the long haul. Because company insurance only covers you when you’re an employee, once you leave, you’re on your own, says Caleb Tan, executive manager, Great Eastern Financial Advisers. Your new employer has the right not to cover you for any pre-existing or long-term conditions which you might have developed while at your previous job.

So get yourself some private medical insurance. “This way, regardless of your status of employment, you will always have that safety net, adds Caleb. Plus, the older you are, the more expensive your premiums will be, so don’t wait until you leave the company before signing on.

Is there such a thing as over-coverage?

You might think you’re cool with waiting at the A&E, or recuperating in a six-bed ward, and that buying a plan which covers anything extra is over-coverage. But sometimes, you don’t know what your threshold is until it’s tested. When a health crisis strikes, you might decide that you actually prefer the comfort of a private ward. So if you can afford it, take up private medical plans rather than a government hospitalisation policy – it’ll minimise the waiting time for treatment, and you’ll have the option of choosing an upgrade. The same rules apply if you’ve never been warded and find it hard to know what your specific needs are when it comes to health care.

How much do I really have to declare to my insurance company?

If you have a pre-existing condition, you will need to declare it to your insurer before purchasing a plan. Be prepared for three outcomes: total decline (where your plan is rejected), loading (where you pay a higher premium) or exclusion (where your plan is approved but your pre-existing condition is excluded). The outcome depends on how high the risk of payout is. For example, if you have high blood pressure or high cholesterol from a young age, you run the risk of decline because of the high chance you’ll suffer from heart disease as you get older. You could decide not to declare your condition and hope your medical claim is successful, but insurers do their homework before processing claims – such as speaking to your doctor and finding out exactly when you were diagnosed.

If I’m not pregnant yet, should I bother with covering my unborn child?

It’ll come in handy if there are unexpected complications during your pregnancy, or if it turns out that your baby has congenital illnesses, says Ng Si Hui. Local companies like AIA and Great Eastern offer prenatal insurance plans that cover you when you’re 13 weeks pregnant (the earliest at which you become eligible for these plans) up to one year after the child’s birth (and up to three years for your child).

But they don’t offer plans that cover maternity expenses such as doctor’s visits or delivery costs. For these, you could opt for international health insurance plans, but there’s a waiting period, and the premiums are hefty.

What’s the one insurance that I definitely need to get?

Home insurance covers you in case of fire, theft and natural disasters. And you should get it. In Singapore, fire is probably the cause of home damage you have to worry about the most. You can’t afford to take your chances. “Home insurance makes your life easier because the insurance company will compensate your loss first,” explains Caleb. “It will then engage a lawyer to get back the compensation from your neighbour or their insurance company on your behalf.” Without fire insurance, you’ll have to go through the hassle of getting your neighbour to cover the damages.

What’s the difference between home insurance and mortgage insurance?

People often conflate the two. But you’ll want the added protection that comes with the latter, especially if you and your partner are servicing a loan together, and he gets really sick – or worse, dies. What mortgage insurance does is to pay out a lump sum upon diagnosis of terminal illness, or death. That sum is determined by the affordability of the premiums, the value of the house, or the desired value (which could be more than the actual value of the house).

This model is similar to the Home Protection Scheme under the Central Provident Fund (CPF), but with two key differences. With mortgage insurance, you can opt to add disability and critical illness riders – not an option for the scheme under the CPF. You’re also not subject to limitations such as an age cap of 65 years or a non-transferable clause if you get a new property.

Is it possible to insure my luxury goods?

There’s no minimum value required to insure items like your wedding ring, Rolex watch or even your Chanel handbag. All these can be covered under a standard home insurance package, which means the company will assess the future value of your items, and you’ll get a payout should these get stolen or damaged.

But if you’ve got a rare and valuable piece on your hands, some insurance companies do cover collectors’ items – on separate plans. Chubb Insurance, for example, offers plans that cover luxe jewellery and fine art.

This article was first published in the June 2017 issue of Her Worldmagazine.

FireIce SG

Creating a financial plan that ensures that you spend less than you earn and also save some money every month should be simple enough. But for many people this is a difficult task.

Practically everybody realises that it is important to draw up a budget and monitor your spending according to it. In fact, most people start quite enthusiastically and make a note of every little expenditure that they make. But this zeal is usually short-lived. They soon revert to their old ways and spend without keeping track of how the expenditure that they are making fits into their overall plan.

How can you make a budget that is easy to follow and which you can stay with over an extended period?

Unfortunately, there is no simple answer to this question. You have to arrive at a set of techniques that you are comfortable with. The trick is to be flexible and to try out different methods till you find one which works for you.

Here are some points that could help you succeed in your budgeting exercise:

At the end of March 2017, the total credit card balances that Singaporeans had rolled overwas in excess of S$5 billion. Credit card debt carries very high interest rates. The standard interest rate for a DBS Bank credit card is 25.9% per year. OCBC charges a similar rate.

If you are carrying any credit card debt, the first step that you should take is to make a plan to pay it off. It may not be possible to do this in a single month. Draw up a repayment schedule that allows you to clear your credit card outstanding over the next three or six months.

During this period, you should not divert any of your income to savings. Your top priority is to liquidate the sum that you owe on your card.

Why shouldn’t you save during this period? Any financial instrument that you invest in will not give you a return that is even a fraction of the rate that you are paying your card issuer. Remember that the correct approach is to divert all your surplus cash to get to a “nil” credit card balance.

The first part of this question should be easy to answer, but calculating your expenditure could be more difficult. Most people underestimate the amount of discretionary expenditure that they make. Transportation costs, eating out, and expenses over the weekend can add up to a significant amount over the month.

Although it can be tedious to track every small expenditure that you make, you may want to do this for a week or a month to get an idea of where your money is going. To make your task easier, you may want to use a budget calculator.

There are also a number of apps that you can use to monitor your expenses. Seedly is simple to use and works by importing data from your bank and credit card issuer and aggregating it under various heads.

Once you have tracked your expenditure for some time, you can sit down and consider if all of it was really necessary. It is likely that you will be able to identify some areas that you can cut back on without much effort.

No budget is complete unless you plan to allocate a part of your income to fund your retirement expenditure. How much should you deploy in long-term savings every month? While the amount could vary depending on how much you earn and your expenses, you should save at least 20% of your income.

The mistake that many people make is to defer this activity till the end of the month. The idea is that by this time you will know the surplus amount that you have left over after all your commitments have been met. You could even have a situation where you would be able to save more than 20% of your income!

Unfortunately, in most instances, it doesn’t work like that. Your bank balance could be totally depleted by month-end. Even if you do have some cash left over, it could be less than the targeted 20%.

The correct approach is to put money aside at the beginning of the month. This will ensure that you don’t deviate from your plan.

It is practically impossible to anticipate every type of expenditure that could arise. You may need money to meet a medical emergency or take an unplanned trip. This could throw your entire budget out of gear.

The way to handle this, is to allocate some money into an emergency fund. Don’t dip into this unless you really need to. It is also important to replenish it as soon as possible.

Having this money available will allow you to stay on track with your budget, even when some unexpected expense crops up.

Many people fall into the trap of trying to cut their expenditure drastically from earlier levels. This approach is likely to fail because it is impractical to expect that you can suddenly change your lifestyle.

It is far better to make small changes initially. A gradual reduction in expenditure is easier to carry out. You are also more likely to remain faithful to your budget if you implement it in a phased manner.

Your budget should be flexible and you should be willing to modify it as circumstances change. If you get a raise or receive a windfall, you don’t have to spend it all. Divert some extra money into your emergency fund. You could even consider allocating some amount to long-term investments.

On a weekly basis, monitor the progress that you are making. A regular review, especially in the initial phase, is essential if you want to meet your financial goals.

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FireIce SG

There are many financial decisions in life that we have to make. Sometimes, there are important decisions that we should think through carefully, rather than to go with the default choice that everyone else around us has made.

All Singaporeans and PRs are automatically covered under MediShield Life, Singapore’s basic health insurance plan. Coverage is provided regardless of age or pre-existing conditions.

According to the Life Insurance Association (LIA), two in three Singapore residents have a private Integrated Plan (IP). In addition to that, one in three have an IP rider. A rider allows deductibles and the co-payment portion of the bill to be covered by insurance companies.

While we think a private integrated shield plan is something everyone should consider, it’s also important for you to first understand the extent of the coverage that you want, and to get the plan that best fits your requirement.

Think about long-term affordability as well. When you buy an IP, you will be paying the premiums for many years. So check out how much future premiums will be before committing to it.

Many people advocate getting a BTO flat as your first home. It costs less and is newer, compared to other similar flats in the vicinity. We have also written extensively about why we think you should get a BTO flat.

But a BTO flat isn’t always your only choice, or even the best choice. A home is after all…your home and your personal preferences matter.

For example, some couples may want to stay near their parents and may opt for a resale flat. Others may want to stay nearer to the CBD for a more convenient daily commute.

As a default option, most HDB homeowners will opt for a HDB loan because interest rates are stable. In contrast, bank loans can vary over the years depending on the interest rates of the market.

In recent years, low interest rates offered by banks has led to more interest even among flat owners who qualify to take a bank loan.

If you wish to find out more about whether a HBD or bank loan is more suitable for you, you can read this article we wrote about HDB vs Bank loan.

Many Singaporeans pay their home mortgage using money from their CPF Ordinary Account (CPFOA). In fact, more than 80% of HDB homeowners do not pay any cash for their monthly home loan repayment.

However, funds in your OA can earn you a risk-free return of up to 3.5% per annum, while cash on hand, unless invested, do not generate any returns. Interest earned will become a large sum of money when compounded over a long time period.

When Singaporeans use their CPFOA for their home loan repayment, they should think through carefully on how tapping on these funds today will impact their own future retirement.

Singaporeans age 65 have a choice of choosing their preferred CPF LIFE plan. They can choose from the Standard Plan (default choice) or the Basic Plan.

In a previous article written, we analyse that based on life expectancy, the Basic Plan appears to be the “superior” plan. This is of course subjective and largely based on how long you actually live to.

While we are not saying that everyone should choose the Basic Plan, we think more Singaporeans need to do the comparison for themselves, before deciding on what makes the most sense for them.

Thinking through a decision does not mean that the default choice available is not a good choice. For the most part, a default choice is usually the more logical choice for most people, hence the choice being “default” in the first place.

However, as with many other financial decisions in life, what is suitable for others may not always be the best choice for you. Big decisions should never be taken lightly. So think through these decisions in advance before you make any of them.

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Yokkie SG

Thanks for the info! Self discipline is very important too

FireIce SG

To provide Singaporeans easier access to insurance policies, insurers in Singapore are constantly innovating. Aiming to change the way life insurance policies are distributed, Etiqa Insurance is the first to bring insurance savings plans online with the EASY save series.

But in a country where expenses are high, and retirement planning is not a priority, how beneficial are online insurance savings plans?

Women in Singapore face various challenges in financial planning. Despite advancing in our careers, most women are still expected to take the lead when it comes to managing the household. Having multiple roles can be exhausting hence, most women forgo long-term financial planning to focus on their immediate tasks.

According to a survey of 600 moms, 75% of Singaporean mothers have not planned for their retirement. Most do not have concrete retirement plans for the future. 44% of the mothers surveyed planned to rely on their children for their retirement.

While there have been developments in pay equality across genders, Singaporean women are still paid 10% less than their male counterpart. Women tend to outlive men. These emphasise the need for women to have a well-rounded financial plan.

With these challenges in mind, Etiqa aims to help Singaporean women by making saving more convenient and transparent with the EASY save series.

The EASY save series includes 2 plans: eEASY save and eEASY savepro. Here are 8 key reasons you should consider them in your portfolio, especially

Etiqa is a joint venture between Maybank and Ageas, an international insurance group. Maybank is 1 of the top 5 banks in Southeast Asia. The 2 companies have 50 million customers across 36 countries between them.

It is the appointed fire insurer for the Housing Development Board (HDB) since 2009. This further cements Etiqa’s reputation as it has since provided protection for over 300,000 homes. Etiqa is rated “A-“ by Fitch, a testament to its financial strength and stable outlook.

Etiqa has been in the market for more than 55 years and is recognised for the award-winning claims experience offered through the instant digital claim processing for their travel insurance. It rolled-out the automatic flight delay notification and processing service. Once a flight is delayed, clients will receive an SMS from Etiqa informing them. Once clients meet the qualifying criteria, Etiqa will automatically process the claims.

Planning for your future with online insurance saving plans

The EASY save series is the ideal solution for the modern Singaporean women who are thinking about their financial plans but pressed for time. The flexibility and variety of options between eEASY save and eEASY savepro allow them to choose what suits them the most.

Get a quote in seconds today.

NB: Abovementioned rates and product details are valid for Etiqa’s EASY save series end-of-year promotional campaign only.

FireIce SG

Critical illness plans are one of the most common types of health insurance policies that agents typically sell. It’s also an important health insurance policy that many consumers will purchase, either as a stand-alone plan, or as a rider tagged to a life insurance plan.

A critical illness (CI) plan provides a lump sum pay-out to policyholders in the event they are diagnosed with an illness covered under the policy. In Singapore, most traditional CI plans will cover 37 common types of critical illnesses.

However, not many people would know that policyholders have to meet the common definition of these critical illnesses before they are eligible to receive a pay-out. These are as defined by the Life Insurance Association (LIA) and it includes some exclusions. Here are 5 important definitions and exclusions that you should take careful note of.

Kidney failure is defined as the irreversible failure of both kidneys, which requires either permanent renal dialysis or kidney transplantation. That means if only one kidney has failed, it does not constitute a critical illness (yet).

A coma that persists for at least 96 hours, and as a result, brain damage which causes permanent neurological deficit assessed at least 30 days after the onset of coma is considered a critical illness.

However, it’s important to note that coma resulting directly from alcohol and drug abuse are excluded from coverage.

Many people don’t realise that early and intermediate stage of major cancers are excluded from coverage in traditional CI plans. Traditional CI plans only cover cancer during the critical stage, also sometimes known as late-stage cancer.

HIV is covered under CI plans but it’s only restricted to infection as a result of blood transfusion and occupationally-acquired HIV. In other words, HIV infections resulting from consensual sexual activity are excluded.

Liver failure which comes as a result of drug or alcohol abuse are excluded from CI coverage.

If you purchase an early-stage critical illness plan, you will enjoy a wider scope of coverage provided by the insurer. For example, unlike traditional CI plans that only provides a pay-out when an illness has reached “critical stage”, early-stage critical illness plan provides a pay-out during the “early stage” and “intermediate stage” of an illness.

Based on our observations, however, any illness that is a direct result of living in an irresponsible manner such as drug abuse, alcohol abuse and consensual sexual activity would still be excluded, even for early-stage critical illness plans.

The post Critical Illness Plans: 5 Things You Didn’t Know Were Excluded From Traditional CI Plans appeared first on DollarsAndSense.sg.

FireIce SG

Anyone who claims they have no bad habits is lying, or at a job interview. We’ve all got some nasty little habits we’d rather nobody knew about. For some of us, it’s flicking boogers out the window. For a select few, it’s taking upskirt videos and decapitating cats.

But some habits, other than being gross or downright criminal, are also expensive. Here are five expensive habits that are costing you money, and that you should make it a resolution to break in 2018:

You wake up on a sunny Saturday morning, and there’s no work. What are you going to do with a glorious weekend’s worth of free time? If the first thing that crosses your mind is “shopping”, you’ve got a bad habit you need to break.

Recreational shopping is one of the worst hobbies you can have, so tell yourself you’ll go cold turkey and find other activities to fill the space. Online shopping also counts as retail therapy, so if you constantly find yourself drifting to your favourite online shopping sites, block them on your browser and find other things to do online… trolling on forums or creating memes are totally free. Just saying.

When you fail to pay your credit card bills in full, you get slapped with very high interest that can make your initial sum quickly bloat beyond recognition. If you don’t manage to pay even the minimum sum, you also get hit with a late payment charge. Ouch.

This means you need a pretty damn good reason to not pay your bills in full and on time—like losing your life savings in an internet love scam or something equally as sordid. Forgetting is not a good reason. To make sure you never forget again, automate all your bill payments which can be made by GIRO. If you do have bills that you’re struggling to pay off, consider taking a personal loan to pay off your high interest debt and then pay that down in monthly instalments at a much lower interest rate.

On any given day, we make many poor decisions. And most of these poor decisions are the result of stress and fatigue.

Let’s say you stay up till 2am surfing Facebook in bed, and as a result wake up late for work the next day. You miss the feeder bus to the MRT station, an in order to avoid being late to work, you call a Grab or Uber. Before rushing into work, you grab a coffee at the Starbucks outlet downstairs so you can stay awake throughout the day.

A lot of unnecessary stress can be avoided by adhering to a strict bedtime and practising good sleep hygiene.

Convenience is something Singaporeans are more than willing to pay for. Whether we’re spending money to have food delivered to our doorsteps, buying groceries online or paying someone to clean our homes, convenience is often more important than cost.

This intense need for convenience is often exacerbated by poor time management. When we always feel like we’re playing catch-up or there are too many things to do in a day, we’re more likely to resort to eating out instead of cooking at home, or jumping into an Uber or Grab instead of taking the train.

Improving your level of time management often leads to cost-savings. Making a meal plan and streamlining your grocery shopping process can save you from having to eat out every day, and working efficiently so you can leave work on time can reduce your reliance on Uber/Grab.

The percentage of Singaporeans with expensive gym memberships is not representative of the number of people who actually regularly make it to the gym.

Likewise, the number of people with subscriptions to local newspapers is not representative of the number of people who actually consider them an unbiased source of news.

If you have any memberships or subscriptions you’re under-utilising, do yourself a favour and cancel them. You’ll instantly save money each and every month, while undergoing zero lifestyle changes.

The post 5 Expensive Habits Singaporeans Should Consider Breaking in 2018 appeared first on the MoneySmart blog.

FireIce SG

Was “save more money” on your to-do list in 2017? If so, it’s probably still going to be there in 2018.

Coming up with very specific, easy-to-satisfy resolutions (transfer $x to a savings account at the beginning of every month) is a lot more effective than inventing a big, vague one you have no idea how to fulfil (like “become a billionaire”).

So here are five simple things you should commit to doing in 2018 that will put you in better financial health.

The world of credit cards is a fickle one. One day, your favourite credit card is rewarding you with 8% cashback on everything you could possibly buy. The next day, they’ve revamped their entire benefits programme, slapped on a minimum spending requirement that’s more than you earn in a month, and the card is now even less useful than those coasters you received from your Secret Santa at the office.

If a card no longer serves your purposes, cancel it immediately. You might think there’s no harm in letting it lie innocuously in your wallet. But the longer you let that piece of plastic stick around, the more likely you are to get charged annual fees unknowingly (and even pay them, if you’re paying by Interbank GIRO) or fall prey to credit card fraud.

Just as your formerly favourite credit cards may no longer be useful to you, new ones will have been released or modified, and might now be perfect for your current spending habits.

The New Year is a great time to retire those cards you no longer use, and sign up for news ones that are going to be your go-to cards for 2018.

So look through MoneySmart’s credit card guides to find the best credit cards for shopping, dining, entertainment, groceries, online shopping, cash back, air miles, rewards and petrol.

If you’ve already got some form of insurance, you probably bought your policies years ago. In 2018, it’s time to review your insurance policies to see if they’re still serving you well, and to make sure you’re adequately insured based on where you are in life right now.

For instance, as a young working adult, you might already have purchased medical insurance. But if you are now slightly less young, married and expecting your first child, you should definitely be considering life insurance as well. If you’ve never properly compared your current health insurance plan with offerings from other companies, you can now do so easily right here on MoneySmart.

If it’s been a few years since you signed up for your home loan, it’s likely your interest rate is no longer very competitive. Refinancing your home loan means switching to a loan with a more attractive interest rate, thereby saving you money.

Will 2018 will be the year you should refinance your home loan? Use MoneySmart’s refinancing wizard to find out.

Over the years, you might have opened various bank accounts and later abandoned them, leaving a bit of money in each so you wouldn’t have to pay fall-below fees.

This year, it’s time to consolidate all your bank accounts. That means you’ll be withdrawing the cash in all the accounts you no longer wish to keep, closing those accounts and depositing the money in the one(s) you want to continue using.

But which bank account should you be using? For the bulk of your cash savings, it’s a good idea to look for a high interest savings account that rewards you a bit more for storing your cash in there.

If this is not an account you should be withdrawing money from (some high interest savings accounts will reward you more handsomely if you don’t make withdrawals), you’ll want to maintain a second account that offers access to a decent distribution of ATM machines.

FireIce SG

Inflation is the term used for general price rises in the economy. It is the rate at which, on a general basis, the prices of goods and services rise. Deflation, on the other hand, is the rate at which prices and services fall.

Central banks have the job of managing the level of inflation in the national economy – they attempt to prevent high inflation and high deflation levels to help maintain a stable and productive economy. The majority of countries’ central banks will aim to maintain an inflation rate of between 2% and 3% a year.

Inflation and price rises can also be thought of as a deterioration of the spending power of your money. For example, if a can of Coke costs a dollar and if the annual inflation rate is 4% then in a year the price of the same can of Coke will be $1.04. This means your money is going less far in all areas of spending.

Because of these factors, inflation is an important part of the economy’s ability to function and grow. Economic progress and development can occur with deflation. Normally, inflation happens if there is an excess of money in the economic system – this drives prices up.

It is important to keep inflation in mind when managing your household income, wealth and assets. If the rate of growth on these things is at or above inflation, then your financial status is at least being maintained. However, if the rate of growth on your income, wealth and assets is below inflation, your financial value is being eroded over time.

A common example of when the value is eroded is to do with wages. In some nations, minimum wages will rise, but at a rate below inflation – this means the average income can purchase fewer goods than before. Prices are rising at a faster rate than income levels, and people are worse off.

This is why it is important to understand what inflation is, and how to protect yourself and your investments from inflationary pressures. The goal is to maintain the purchasing power of your money and the value of your portfolio of investments. By applying the following three methods, you can help protect against inflation.

Method 1 – Investing in the stock market

Investing in stocks can be an effective tool against inflation. Although many people think investing in the stock market is complicated and risky owning equities can help protect the value of your portfolio.

The main idea behind investing in the stock market is that the value of your stock will be pulled upward with the price increases of inflation. As prices rise, businesses will be able to sell services and goods at higher prices. This will lead to higher revenues and profits for the company and a higher share price for you as an investor in that company’s stock. To benefit from this movement you can pick stocks from industries and sectors that perform especially well during inflationary periods.

A popular and effective example is commodities and commodity stocks – including companies involved in oil, grains and metals extraction and supply. These companies have stronger pricing power during periods of inflation – meaning that the prices of these goods items will more likely rise in periods of inflation as compared to other sectors.

However, this is not always simple as sometimes businesses will face increasing costs from the price rises in the economy. Revenues may rise, but if costs also rise at the same rate, there will no benefit to bottom line profits for these companies and no benefit to your investment.

The best option is to find stocks that will experience gains but also have histories of strong profitability – healthcare is a good example. Also keep an eye out for dividends when looking to protect against inflation – they can help add value to your portfolio of investments when returns in other areas are being eroded.

Method 2 – Property

Buying a home is a good idea to protect against inflation. Investing in the real estate market can reap the rewards if carried out correctly and with the required research. The primary goal when protecting against inflation is buying a home rather than dabbling in the property market.

Focusing on home ownership is a stable source of value compared to investing in property for a short term opportunity and should be viewed as a long-term investment – for at least 2 or 3 years. This allows enough time for the value of the house to increase. As you pay off your mortgage, you own a larger and larger share of the home until you own the entire place – usually over the course of 20-30 years.

Then, you have a debt-free asset in your portfolio which will continue to rise in value over time. Home prices, similarly to land values, rise annually, typically in line with inflation. Although there are bubbles and slumps in the market as a long-term holding, you will see gains in value. The value of homes has grown in line or above inflation historically over the long term, and this investment will be protected from inflationary pressures. This is a better choice than just keeping money in the bank in a savings account – which by the time you retire will not have grown in value as fast and may even have lost value.

Method 3 – Self Investment

One of the best ways to protect against inflation and other uncertainties in our future is to invest in ourselves. This means to work on putting yourself in a position to increase your present and future earnings potential.

For example, education is a great choice. New skills can add value to you and help you achieve a promotion or expand your business. Education also works for recession protection. In an economic downturn, you will be in a better position to protect your income stream. This can be the most controllable method of protecting against inflation. With investments, you are never 100 percent aware of in control of the performance and factors involved. However, with yourself, you can control how much effort you put into your endeavours and subsequently the rewards to be gained. It is an easy and immediate boost to your potential. Boost your future earnings by investing in yourself and help protect against inflation.

Inflationary pressures can be managed as long as you identify the risks you may be facing. Ignoring this issue will only hurt your value and investments in the long term, and it is important that this risk is addressed head on.

Do proper planning today.