Finally, it hit us, this sentence "PRICE INCREASE" will be the hot topic anywhere in Malaysia. Fuel price jack up and the upcoming price increase for electricity, whether you like it or not, life must goes on.

In my previous 2 posts, I wrote Can your hard earn money keep up with inflation?, the 3.0% inflation that I mentioned in the post is outdated. The new inflation is estimate to rose to 5% or 6% due to fuel price increased. If we can't avoid inflation, then we can take opportunities from the advantage of it, to keep up with the inflation. Foremost, you may need to revise your lifestyle and start budgeting. I always think that the word "budget" is punishment for those who are poor, like I need to think twice before spending and budgeting seemed like a waste of time. After practising it for months, I discovered that budgeting can keep me focused on the goals I want to achieve and that's why I need it. I personally think it's a smart move NOT putting yourself on credit that you couldn't afford - "Spending without Budgeting". You can know more about how do I manage my money here.

I mentioned in my previous post that I would recommend a book. This is the book -> The Automatic Millionaire. All of us know this "Pay OURSELF first" before you pay others, but how many of us are doing that? When you received your paycheck, do you pay yourself first? through this book, you will discover ways never considered.

Here's the sum up, The Automatic Millionaire one-step plan to live and finish rich is to save money. If you are looking for a get rich quick book, you can avoid this one. To practice the concept in this book, required self-discipline and time. Basically the concept of this book is pay yourself first, and try to make it at least the first 10% of your gross income. This powerful concept and the magic of compounding is irresitable for everyone to follow if you want to finish rich.

Do you want to get up at the middle of the night and say this:- 

Ouch 1: I'm approaching retirement and I have no savings? 
Ouch 2: I tried very hard and no matter what I do, I can't seem to make enough money to cover my expenses and save some money. 
Ouch 3: I wish I could quit this miserable job, but I have no choice, I got bills to pay.

Money is not enough, do you blame money? Money is never the problem, you are the master of your Money. It's just our lack of understanding of money and how we manage our financial planning that cause us lose sleep at night.

You know what the things should do, but simply don't do it - Pay Yourself First!. Making excuses and blaming others, your parent for instead for not teaching us about money are over. If you want to continue to lose sleep at night, it's your choice and it's not because you are born poor, it's just lack of understanding. The great things about this book is that it does not ask you to save big, if you can, that's good, but most people are not in that position, which is why this book will show you how little savings can add up quickly. Saving is something found in your everyday life by the way you live and the choices you make. I am sure you have heard of this "Sikit Sikit Lama Lama Jadi Bukit (Malay translated in English as "from little to grows into mountain")" or this "Rome was not built in a day" and neither will your bank account.

There are hundreds of ways to save money, encouraged yourself that it is never too late to start saving, regardless of your age. Follow your own pace and I always put this quotes with me all the time "I cannot go back and make a new start, but I can start now and make a brand new ending."

Cheers~

Recently announced that Malaysia's annual inflation (CPI) rose to 3.0 percent high in April due to higher food price. This is the highest level in 15 months, the food index jumped 4.7 percent for the first four months of 2008 compared with the same period last year. News sources from TheMalaysiaInsider and more statistics from Department of Statistics Malaysia.

Our hard earn money is getting smaller due to unpredictable economy, we don't know what is going to happen next. Rice is increasing and yet government may increase the petroleum price soon, all this uncertainties will just loom back to us as a consumers.

If you are clueless about what's Consumer Price Index (CPI), you may refer Consumer Price Index as Cost of living index or more exact an index that traces the relative changes in the price of an individual good (or a market basket of goods) over time. Furthermore, our national unemployment rate continues to remain steady at 3.2% for the month of December 2007, it's not so bad after all. But, I have read somewhere an article that says inflation increase will lead to decrease of unemployment rate, which mean that the current unemployment rate at 3.2%, if this is to decrease then we should expect more inflation in the future. Here's the hint that is telling us it's coming more and more, the increasing food prices and recent global upsurge of petroleum prices.

My god, it seems like we are unable to avoid inflation, but it's not too late if you can take opportunities from the advantage of it, to keep up with the inflation. What's your plan? No doubt that fixed deposits are still the most popular form of “investment” in Malaysia. Let's see the best available fixed deposit rates for amounts up to RM 1 million on offer at the moment (source: Bank Negara consumer website www.bankinginfo.com.my - updated 29/8/2007):

If the above rates are not what you are looking for, you may consider investing in mutual funds or stock market. It may definitely higher that the above rates, just bear in mind, you need to invest in yourself first before you start to invest, know what you are investing is the rule of thumbs of investment. However, know your risk tolerance level, investment option is a greater risk, you may want to consult an experience financial planner before taking this step.

Lastly, it's all up to you to put your money in investment opportunities or not. After all, we are actually losing money with the increasing of inflation and decreasing of "buying power" that we had discuss earlier.