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If I were to ask you a question – what does inflation mean to you? Or explain ‘what is inflation’?<\/p>\n
What would\u00a0your answer be?<\/p>\n
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Got an answer?<\/p>\n
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Some\u00a0of us may encounter some form of difficulty in trying to articulate what inflation really is.<\/p>\n
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Some of us may explain it as the same dollar today cannot buy the same amount \/ quantity of things in the future.<\/p>\n
Some of us may answer it as\u00a0it’s the value of money getting\u00a0smaller.<\/p>\n
My favourite answer when I asked the older generation this question and they would tell me – Last time (long time ago) I go market with two red colour notes, now I go market with one big blue colour note, come back wallet empty, basket also not full.<\/p>\n
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It’s not that we do not know what inflation is, but all of us\u00a0have slightly different ideas about inflation. And guess what? Everyone is right.<\/p>\n
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But just to keep\u00a0things simple for everyone,\u00a0I’ll just share my brother’s answer. I like his answer, simple yet easy enough to understand.<\/p>\n
And his answer is, the cost of goods has risen.<\/p>\n
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And I’ll further illustrate on his answer and ask\u00a0so how much has the cost of goods really risen? Is it really the 4-5% that we have been hearing?<\/p>\n
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Channel 8 news<\/a> just reported that some coffee shops in Singapore have increased the prices of coffee and tea, due to rising rental and manpower costs. One-third of 1,200 coffee shops have increased the price by 30 cents.<\/p>\n A cup of coffee generally costs $1.00. A price increase of 30 cents works out to be a 30% price increase!<\/p>\n One of the causes highlighted leading to this increase is due to landlords increasing rental by 10 to 20%. I’ll repeat, 10% to 20%.<\/p>\n <\/p>\n I recalled about 30 years ago when my parents first bought their 5-room HDB flat, they have gotten it for $90k. For some who got their flats earlier, the price could be lesser. But for us to own a 5-room HDB now, on average, we could be looking at a price tag of about $400k, depending on location. This is a 400% price increased over a 30-year period.<\/p>\n <\/p>\n Movie tickets in the past some 30 years ago cost about $1. A\u00a0movie ticket cost about $6 about 20 years ago. Now? On average, a ticket cost about $9 to $11 depending on the day and mode of buying\/booking. It’s about\u00a050% increase from 20 years ago if we take the cheapest ticket or about\u00a0900% increase from 30 years ago.<\/p>\n <\/p>\n <\/p>\n If the above examples are not enough to set you thinking what the cost of inflation really is, let me share this article from goodyfeed , which I think illustrates the %\u00a0of inflation very well.<\/p>\n The article is about the price difference of foods\/drinks in primary school canteens in 1990s as compared to\u00a02010s. You can read the full article here<\/a>.<\/p>\n The price increase had ranged from 100% to a staggering 1000%. Fortunately, for most of\u00a0the food items, the prices had increased by approximately 1-fold or 100% (which is the lower end range) over a 20-year period. But still, can you imagine our food costing twice as much 20 years down the road? Would\u00a0we still afford to have our comfort food like a bowl of wanton mee by then?<\/p>\n <\/p>\n I hope the above examples paint a clearer picture how a simple 4-5% inflation every year accumulated can\u00a0make a big difference\u00a0over 20 or 30 years, resulting in prices to cost\u00a0about double in time to come.<\/p>\n <\/p>\n No wonder this explains why the older folks would tell me, last time they could\u00a0buy one basketful of groceries with $20 but now even with $50, they cannot even fill the basket.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" If I were to ask you a question – what does inflation mean to you? Or explain ‘what is inflation’? What would\u00a0your answer be? . . . . . . . . Got an answer? Some\u00a0of us … Continue reading