Wah ! You calculate inflation rate without the subsidy ? But subsidy is still there. You have info all subsidy will be taken away soon ?

Looking forward to your response

Thanks. That said, I'll wait for others to come explain to you about inflation...

in any case negative real value will erode savings.

Alamak....anti-climax.....

Why want to wait for others ?

Hi guys..newbie here..
im just a fresh graduate (age 23) with great concern about my financial future..
my current work after epf can get roughly rm2250 per month..therefore..

im planning to save at least rm1000 per month..
for my education loan, rm250,
parents rm300,
motorcycle oil and lunch rm200(work expense).not planning to buy car at the moment. can use family car.
so that gives me a balance of rm500 to spend for shopping and entertainment.

i currently have rm5k in my asb account.
so the saving of 1k per month will be deposit into this account.
do u guys think that asb provides a good financial security?
or do u guys have any other suggestion for any investment?as money always depreciates in value..(gold maybe?)

Actually, it's not. It's the most precise comparison that they (financial planners) or anyone else can come up with that is not a trick.

Because it's pure and simple comparison between incoming (FD) and outgoing (inflation) differences. If outgoing > incoming, that's negative. Both in terms of arithmetic and accounting.

Whereas you brought up numerous other side issues like risk-appetite, accumulated wealth, required/essential expenses and personal circumstances to cloud the matter further.

For example, if you spend zero, the impact of inflation on you is zero.

It doesn't mean the impact of inflation is zero, if you get the drift?

Good financial planning with >40% of net income as savings

Don't think too much now. ASB is the best for you. Put everything in there. Then continue to read LYN and learn different type of investment. When you are comfortable with other investment which you think you can beat ASB, then only start invest

No dispute

Actually everyone has different expectation and needs. Its just that my bro is risk averse. Hence his choice is clear.

To tell him that FD interest can't beat inflation is not accurate too, because of his circumstances. The statement that is so regularly brought up "inflation will eats up your FD interest" also does not apply to every circumstances. So, depends on one's needs, FD is not always a bad choice even if taking inflation into account

I liked this simple phrase.
I guess cannot see it now..... unknowingly, working behind the scenes....until one need to spend and made comparison

Essentially the buying power of your money is ever decreasing if you can't beat the inflation regardlessly you spend it or not.

You can live until your last breath with 10 millions today in FD @ 3.5%; but by that time the same 10 millions probably can't buy you the equal value of items. Make sense?

Please educate me how much % return is enough to beat inflation

No idea. But we can always used what is published by the authority as a guiding principle.

We should make our investment decision based on return vs risk. One should not forced "Beat the inflation" to be in their investment objectives if they certainly can't take that corresponding level of risk. Inflation is completely out of consideration when I am making a decision to invest into something.

But there are "financial planners" who use inflation as a yardstick to say FD is not a good investment. In a way, they try to promote their product by saying FD is bad. Are they wrong ?

each vehicle has its own usage, there is to outright BAD investment or holding vehicle.
any "financial planners" that uses ABSOLUTES give themselves away as ConSultans

They may be correct in the sense that, FD is going to be outcast by Inflation, but, that should not be the sole reason for you not to put money in FD. Yeah their product give you 20% return but so what if the risk is equally high and you can't afford to lose this amount of money (maybe saving for retirement/children education)?

Again I would like to reiterate my point that one should choose the investment vehicle based on their objective (% of return) and risk profile. If one day inflation also outcast their whatever product, then wouldn't it be equally stupid to invest in their product?

Remember, these whatever financial planner could knows nothing about financial planning. They are just some salesman who tends to over promise. When they say their product going to give you certain % of return, it is appropriate to ask what is the basis and is this written black & white or is only their thought/assumption based on past performance of the product.

Past performance can be used as a benchmark but is never to promise the equal amount of return in the future.

Showtime747... you got your answer de

The last line about authority... works pretty well in well developed countries. Thats why I never questioned your brother's risk appetite, or his financial success in accumulating assets etc... His risk adverse strat works perfectly when the real return is positive (even though its small in percentage- his high networth offsets it).

In Msia... I think we should be smarter than just accepting the govt's facts on inflation.

(and pretty much everything else)... saving since young to buy diamond rings? Saving RM3k EACH DAY since birth?

Inflation is easily high possibility more than 3.5%. Wongmunkeong help me out if showtime still blur k?

This post has been edited by kaiserwulf: Apr 16 2014, 08:17 PM

No I didn't get your answer. Your inflation without subsidy is quite peculiar. I am blur blur and I prefer to get answer from the house's mouth instead of wong seafood

Msia inflation is currently more than Malaysian FD. Thats all.

Contrary to what the govt tells you.

Oh...ok