Inflation Reason and Consequences -Ahmad Bhuiyan
Most of the time we see commodity prices rising in the market. Ordinary consumers lose their temper due to high prices of essential commodities. Inflation is an economic condition when the price of a commodity rises and the value or purchasing power of money decreases. This creates a crisis in which the people of the country, despite having money, cannot afford to buy the necessary goods or commodities. Because the value of the goods becomes more than the money in hand. Inflation is responsible for this rise in commodity prices. Syndicates and international market systems are responsible for some times. If the price of goods increases in the international market, it affects the domestic market. Again, some unscrupulous traders of the country have created artificial crisis of commodities through syndicates and increased the prices of commodities. As a result, that is what happens. The price of the product goes up in the market. This is called inflation in the language of economics.
Although inflation seems to be the enemy, it contributes to the economic development of the country. However, unbridled inflation brings misery in the lives of the common people of the country. In order to control uncontrolled inflation, it is necessary to bring the economy of the country’s market system under strict policy. However, at the time of inflation, at the individual level, we can plan something to make some financial gain. Today’s article is about some such issues. Let’s find out what we need to look for.
You can make a profit by investing during inflation. If you invest in a financial institution, you will get a profit from that investment after a certain period of time. As inflation continues in the market, it is only natural that the amount of return on investment will be higher. However, before investing, it is important to check which sectors are experiencing inflation in the country’s market, it is better to invest only in those areas.
If you keep money in the bank at the time of inflation, it will be a wrong decision. Because, the profit rate of the bank is fixed. The money you deposit today will not be worth that much after one month. In other words, if you deposit 10 thousand tk, its value will decrease later. As much as you can buy today for 10 thousand tk, you may not get as much tomorrow. And since the rate of return is fixed, you will get a refund with a certain amount of money. But it will be seen that the value of that money has decreased a lot including profit. Because up to that time the prices of commodities have gone up a lot due to inflation in the market, and the purchasing power of 8 tk has gone down. So it is better not to deposit money in the bank at this time.
Buy, don’t rent
In particular, when you rent something, such as: shop or home; You then receive a fixed price rent from the tenant. It is usually monthly. But for the ongoing inflation in the market, that money will lose its real value every month. One month from now, the rent you receive will not be the same as it is today, but will be further reduced. So, try to buy as much as you can without renting this time. Because, whatever you buy today, its price will go up more in a month or a year. As a result, you can sell it at that time if you want.
Financing from the bank
Take as much money as you can from the bank. And invest that money in a profitable sector. The interest rate in the bank may be higher at that time, but you will invest with proper planning. After reviewing the market system, invest in the sector in which you will be more profitable.
Think before you buy
Even though the prices of all the products are going up at this time, you should try to buy as much as you can at a lower price. As the demand for daily necessities of life is high in the market, so are their prices. And so before you buy, you can see which products are comparatively cheaper than others. So it would be wise to buy products considering the market system.
Just as planning is necessary before starting anything, so is budgeting. It could be that; Suppose you plan to buy the things your family needs in the next week or a month. Because in that one week or one month the price of that product will increase more in the market. So, you can keep a list of the expenses you need to keep up with the current inflation. It will also save you some money.
Invest in stocks or short-term bonds
Many people are now familiar with investing in stocks or bonds. Especially by investing in the shares of a company or organization, some part of the profit can be obtained from there. If you buy the company’s stock, you can basically own one. As a result, you will receive a portion of the profits in proportion to the shares purchased by that company. But for this you need to have a good idea about the stock market. At the same time, according to the current situation in the country, the financial condition of some companies is good, and the stock market is in a relatively good position. Institutions that are in a good position even in times of inflation should try to invest in the shares of those institutions. But you need to know the stock market is constantly updated. It is also possible to invest in some risk-free short-term bonds or government treasury bonds. Therefore, the rate of risk will be lower due to short-term investment, profit will be available. Invest in stocks or bonds by reviewing the market system.
Buy as much property as you can, especially land. Basically, if you have a lot of money, you can buy property, such as land or gold. The value of these continues to rise. As a result, you will be able to make a profit by selling them later.
Basically, uncontrolled inflation is enough to break the country’s economy. However, the government of a country can control this situation if it wants. As a result, even if there is inflation in the market, it will be within the purchasing power of the people. At the same time, the scope of the country’s economy will increase.