Why Investing Isn’t Just an Option — It’s a Must to Stay Ahead of Inflation
Have you noticed how everyday prices keep creeping up? Whether it’s groceries, utilities or just the cost of living, inflation is quietly eating into the value of your money. According to experts, many urban Malaysians face an inflation rate of around 6% per year. Whitman
So what does that mean for your savings and your future? Let’s dig in.
🔍 What Inflation Does to Your Money
Imagine you have RM100 today. With 6% inflation each year, in 20 years your RM100 might only buy what RM31 can buy today. That’s how powerful inflation is. (And yes, it’s not just a theoretical number — it affects your lifestyle, retirement plans and even what you leave behind.) Whitman
Here’s a quick example:
- You plan to retire at 50 with RM3 million saved up, earn interest of 4% on it, and hope for that to support you and eventually leave RM1 million each to your three children.
- But if you assume inflation is 6% annually, by the time you’re 74 those amounts won’t buy what you think they will. Whitman
So — simply saving money (especially in low-interest accounts) is no longer enough.
🚀 How to Actually Beat Inflation with Investing
Here are three key shifts to make — not just saving, but investing smartly.
- Treat cash for emergency use — not long-term growth
Having cash in a safe place matters for short-term needs or emergencies. But piling big chunks of cash without putting it to work long-term? That’s a passive loss scenario, because inflation keeps eating at it. Whitman - Aim for returns that outpace inflation
If inflation is 6% and your investment returns are also 6%, your money is merely holding its value — it’s not growing. To build real wealth and preserve purchasing power, aim for something higher (for example 8%, 9% or more) depending on your risk appetite and timeline. Whitman - Choose asset types that have inflation hedging features
Some investments are better suited to rise with inflation or at least not be dragged down by it. A few examples:
- Equities (shares of well-managed businesses) — They can increase profits, raise prices and pass inflation through to customers. Whitman
- Property / real estate — Often building costs, land values, and rents go up when inflation goes up. But it requires pickiness (location, quality, demand) to avoid problems. Whitman
- Unit trusts / ETFs / diversified portfolios — Good for investors who aren’t investing big lumps but still want exposure to growth assets. But you have to pick the right funds and asset mix. Whitman
🧭 What You Should Ask or Do Right Now
- Review your current savings: how much is in cash / fixed deposit vs how much is invested for growth?
- Ask: Are my target returns beating what inflation will likely be?
- Look at your investment horizon: the younger you are, the more you can afford to aim for higher growth (and accept more risk) because time is your ally.
- Don’t invest in something just because it’s “promised high returns” — risk matters. As the article says: “Investments that don’t beat inflation are no good; investments that lose your capital are worse.” Whitman
🛡️ How Ace Agency Can Help You
At Ace Agency, we understand that protecting your future isn’t just about insurance — it’s also about your wealth, your freedom and your peace of mind. Whether you’re building a solid financial base now, children’s education fund or preparing for retirement decades ahead, we can help you:
- Review your current savings and analyse whether they’re on track relative to inflation.
- Identify suitable investment vehicles and risk levels for your time horizon, goals and comfort with risk.
- Integrate your investments with your insurance planning (so you’re covered and growing).
📞 Get in touch with us today — let’s make sure inflation doesn’t erode your future lifestyle. Let’s make your money work as hard as you do.
