Lesson 1

Beating inflation

What $10,000 becomes in the bank, in CPF, in property and in stocks.

Cash loses value every year. To keep up, your money has to grow faster than prices.

Auntie Mei Why does my kopi cost more every year?

1.1

The race

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1.2

The scoreboard

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1.3

The kopi test

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1.4

Growth on top of growth

Return a year
S$0S$100kS$200kS$300kS$400kYear 0Year 5Year 10Year 15Year 20Year 25Money you put inGrowth

You put in S$150,000. Growth added S$241,521.

Illustration, not a forecast. A steady return is arithmetic; real markets swing.

1.5

Start early

Marcus
Marcus invests S$300 a month from age 25 to 35, then stops.
Esther
Esther invests S$300 a month from age 35 to 65.
Return a year
S$0S$100kS$200kS$300kS$400kAge 25Age 35Age 45Age 55Age 65Marcus S$393kEsther S$353k

Marcus put in S$36,000. Esther put in S$108,000. At 65, Marcus has S$392,835, S$40,016 more than Esther.

Illustration, not a forecast. Money goes in at the start of each month.

Quick check

  1. What does inflation do to cash?

  2. Which line on the chart is the "keep up" line?

  3. What does compounding mean?

Try it

Run your own numbers

The compound calculator takes your amount, rate, years and fees.

Education, not financial advice. Past returns don't guarantee future returns.