The purchasing power barometer indicates: a negative climate for savings
The purchasing power barometer indicates: a positive climate for savings
You become poorer when saving
No doubt that you have read or heard this before!
Purchasing power and loss, two concepts that nobody likes to see mentioned in one sentence.
Do you know whether the purchasing power of your savings is increasing or declining? Or do you know the yield you are getting for your savings?
If you don’t know the answers to these questions, you are obviously not alone..
A survey with 1.000 Belgians* tells you that:
does not know the interest on their savings account
knows the evolution of inflation
understands the long term effects of compound interest
Invest to enhance your purchasing power
There simply is no such thing as a solution that counterbalances a decline in purchasing power and at the same time is completely devoid of risks. Are you ready to accept some risks in order to compensate the decline in purchasing power? Or maybe turn it into an increase? Simulate a boost of your savings
Your purchasing power says how much you can buy and depends among others on your income, taxes and the depreciation of your money.
Income is different for everybody, taxes too more or less, yet inflation is the same for everybody. Only when your money generates enough extra income to counter taxes and inflation, you’re not losing purchasing power. That is where the traditional savings account is failing today.
Inflation is of all times
Not quite an overblown concept when it comes to your savings. Inflation is one of the parameters that have an effect on your purchasing power. At this moment the Belgian inflation is at 1,82.
This means that your money needs to increase with at least that percentage in order to maintain your purchasing power.
The indexation principle does not apply to your savings. This mechanism does adjust the wages, pensions and social security payments to the cost of living, but it does not adapt your savings. Money not spent decreases each and every year in value.