It is almost impossible to agree that inflation can be so high as 11% per year that it erodes $2m to $200k in 20 years . If that can happen, it means you are assuming an end of world scenario.. but then it should not last 20 years.
I feel a marginal inflation rate of 3% is more possible and that can destroy the value of $2m to half its value of slightly above $1m in 20 years.
I also agree with the point below that it is true that if all your assets are in cash, you can get hit by such erosion. But if you hold assets,indirectly you are hedging against that inflation.
So balance such excess cash with equities, assets and you should be ok.
Quote:
Originally Posted by Unregistered
In that case our HDB flat which is worth $700k today will not be $900k in 20 years time but will be $2m instead. This is good news. Thanks for sharing. If what you said is true, then our net worth should be $4m in 20 years time and not $2.04m. That's wonderful. |