Is Your Money Keeping Up With Inflation?

In today’s unpredictable global economy, you obviously never know what is going to happen next. Uncertainties and concerns regarding the Iraqi threat, North Korean crisis, and hidden terrorist cells and networks continue to loom in the back of the minds of consumers. Moreover, the stock markets and industries around the world.

Price inflation is another major concern for everyone. The latest Consumer Price Index (CPI) number released by the U.S. Department of Labor’s Bureau of Labor Statistics states that prices, in all U.S. cities, are up 0.1% in the month of December for the calendar year of 2002. The Consumer Price Index (CPI) is a program that produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Furthermore, the national unemployment rate continues to remain steady at 6.0% for the month of December 2002. Believe it or not, this may not be as bad as it sounds.

Economic theory suggests that an increase in the inflation rate will lead to a decrease in the national unemployment rate. But since the unemployment rate is currently 6.0%, this may also suggest that in order for this rate to eventually decrease, we should expect more inflation in the future. The recent upsurge in oil prices together with precious metals supports this theory and may also be a hint of what’s to come.

Well, it seems that you probably can’t avoid inflation, but there are definitely opportunities that you can take advantage of, in order to keep up with it. One option might be to consider depositing your money into a savings account rather than a money market account. Most major banks are currently yielding an Annual Percentage Yield (APY) that ranges from 0.5% to 0.75%. Even though this is pretty low, it is higher than what most money market accounts are currently offering.

One of the best rates that I have recently seen is ING Direct’s offering of 2.25% APY for their Orange Savings Account. But if these rates are not what you are looking for, consider investing in the stock market. With the latest downturn in the economy, shares are pretty cheap and going fast. There are now many online brokerages that allow consumers to purchase stocks for a small fee. For instance, Sharebuilder lets consumers invest for as little as $4. However, please be wary, this investment option is a greater risk so you should consult with a financial advisor before taking this step.

Whether you choose to put your money in these investment opportunities or not, it is up to you. But just remember that if you don’t, you are actually losing money because the “purchasing power” of your dollar is decreasing as the inflation rate is increasing.

Carlos T. Fernandez is the business columnist for Dominican Times Magazine, a publication that focuses on the hispanic culture and the issues affecting its communities. He is also the publisher of a popular financial planning and management website entitled Building Wealth (http://buildingwealth.blogspot.com).

ctfernandez@hotmail.com

 Carlos T. Fernandez

More Articles 

Brief Experiences on How I Started Making Money Online - Armand Dayz
I started selling different products as a mail order business in 1996, however, a month later, after buying a computer and discovering the Internet I decided to open an online store. Very soon I found out that selling books and information online in...

Who Takes Your Money - Gordon Goh
Your business is making profits, but where is the cash? It seems that someone has taken away your money. Your bank account is still the same, and your personal wealth is still the same. There must be someone that took your money. Based on my over 18...

I Want My Money Back - Denise O Berry
No matter what you do, there will come a time when a customer will ask for a refund for some reason or another. Do you give it to them? That depends. If you have an unconditional money back guarantee, there's no question. Refund the money -- no...

"Making Money Out Of Nothing At All" - Ewen Chia
"Make $10,000 In One Day, No Way!" Are you spammed by such claims daily? You know that's ridiculous, but then you know that there IS money to be made online. If you're serious about making money from the internet, serious about setting up a...

Does Money Grow On Trees? - Terry Gibbs
"Money Doesn't Grow On Trees." Some of us even believe it. An orchard owner would say the statement is wrong. His profits grow on trees… As small business owners we are similar to tree farmers. We plant and nurture trees knowing that...

The 11 Best Money Saving Ideas of All Time - Part 4 - Palyn Peterson
At any time in history, no matter what the current state of the economy, no matter what the current trends, no matter what the unemployment rate is or where interest rates lurk, some money-saving ideas stay true. Some of you may have heard...

Having Trouble Making Money? You Might Have A Nasty Case of MCN. - Isaiah Hull
Do you spend the majority of your time trying to convince your prospects that they absolutely must buy your product? Are you experiencing low conversion rates and high negative-response rates? Are you starting to feel like internet marketing...

The Truth About Money! - Kathy Thompson
How much money do you want? How much is enough? How much money is too much? The Truth is --- You don't need money! Let's find out why? Money is really just a form of exchange. Here is an example. 10 people are in a room. Only one person has $1....

Making Money With Any MLM Program - Joe Featherston
Multi-level Marketing companies abound by the thousands. A great many well-known economists are predicting this form of selling to become the prevailing method of selling by the turn of the century. A lot of people have joined multi-level...

Multiple Streams of Income and Money-Making Options - Angela Wu
'Multiple streams of income' is often trumpeted about as one of the biggest advantages of doing business online. There's no doubt about it; even a bunch of 'little' cheques can add up to a solid income every month. The problem occurs when people...

How To Make Easy Money on the Internet -- But This Time It's Actually TRUE! - Jim Clark
Introduction: On the World Wide Web, domain names are the equivalent of real estate. Owning a domain name lets you stake you claim to your piece of the Internet. For several years, many people from all over the world have been making a good...

10 Ways To Find The Money Hiding In Your Paycheck - Robert Dickson
No matter how tight things are financially for you; no matter how bleak you think that 2005 might be, if you are earning a paycheck then there's extra money hiding in it. You just need to know where to look. Here are 10 ways to bring that money...