Hacking Inflation

A lot of people in the Philippines have heard about “Inflation” so many times on TV, usually in the news whenever the reporters talk about the current economy, but never really paid much attention to it. At least not until it hit such high levels that it became very alarming. All of a sudden, people were talking about it. Some became “experts” overnight and started commenting on social media despite knowing very little about it.

So what is inflation and how does it affect us?

Inflation, simply put is the increase in the cost of living due to the increase in price of goods and services. As inflation grows, our purchasing power decreases over time. An excellent example of this is your weekly shopping cart. Back when in my high-school days, PHP 2000 can already fill a large shopping cart in the supermarket. Nowadays however, the same amount can only buy you a few bags of groceries. If you bought toiletries, probably less.

So how can we control inflation?

Simple answer, we can’t. We cannot control the economy of the country or the monetary policies the government puts in place to control inflation. We can however, defeat inflation by making sure that our money grows higher than the rate of inflation and there are several ways to do this. Putting your money in a savings account is definitely NOT one of them. Why? Because a savings account only earns .25% with most banks and with inflation at around 3-5% per year, your money will only keep losing its purchasing power over the years.

So what do we do?

One of the best ways to hack inflation is by investing your hard-earned money and savings into investment vehicles that earn higher than inflation. Contrary to what some, if not most people believe, investing doesn’t mean that you need to have hundreds of thousands or millions of pesos before you can start investing. Most investments nowadays can already let you start with just PHP 5000 and then you can just regularly add to it regularly to keep it growing. A very good example of this is the Stock Market. For just PHP 5000 you can already open a stock market investment account with an online broker and start buying shares of companies like BDO, Jollibee, Ayala Land, SMPH and many more. Buying shares of these companies makes you a part owner which means when they make money, you also make money. Historically, an investment in the stock market has been giving annual returns between 8-12% per year! This is not to say that investing will make you rich quick, but if you stay invested for 5-10 years your money will definitely be more than what it is now.


If you’re not too keen on stock market investing, you can also try investing in Real Estate. The catch though, is that the capital required is much higher than Stock Market Investing, but if you’re quite good in finding great property at a low price, and making money from rental income, then Real Estate Investing can also work for you. After all, who doesn’t want to receive regular income while doing nothing, right?

You can also try entrepreneurship if you’re business savvy. This is also one of the best ways to make your money grow if you do it right. Just look at the tycoons like the Ayalas, Gokongweis and Sy family of SM, even Mr. Sipag at Tyaga, Manny Villar.

Sot there you have it. Just a few ways to make your money grow and hack inflation. Need help on how to get started to in picking the right investment? Consult a Financial Planner, or if you’re in the UAE, you can register for one of the biggest financial literacy events that happen only once a year, Money Talks UAE.




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