What affects the value of money ?
Inflation – As we all know money starts to lose its value as time goes by. This is due to a phenomenon called inflation which is a measure of the rate at which prices of goods and services increase. When positive, inflation indicates that money is losing its value. Simply put, the money you earn today will be worth less 10 years from now. Interest rate fluctuations – A drop in interest rates means a smaller return on your deposits, and if the interest rate is lower than the rate of inflation, your savings lose value. But for some investments, such as equities and bonds, the value of your investment may rise because of the drop in interest rates. International economic trends – What happens in other economies can affect the value of your money. Political circumstances, GDP growth, and stock-market indices in other countries can all have an impact on the buying power of your money. With so many factors involved, it is crucial that you have a financial plan to protect your future and to p
