What is Inflation and How You Can Beat it

Inflation might sound complicated, but it has a real impact on your money. Essentially, it is all about how the price of everyday things keep increasing, making our money worthless over time. Understanding inflation and its effects on your spending power is key to managing your finances wisely. Perhaps more importantly, knowing how to invest smartly can help you protect your money from losing value.

This article will explore what inflation is, how it impacts you, how you can beat it with smart investment strategies, and provide insight on how we at APS Bank can assist you on this journey.

What is Inflation?

Inflation is when the price for goods and services goes up resulting in the value of money having less purchasing power. For example, if the inflation rate is at 3% per year, something that costs €100 today will cost €103 in a year.

Inflation is typically measured by the Consumer Price Index (CPI) or the Retail Price Index (RPI), which tracks the price changes of a basket of goods and services over time. Moderate inflation is normal in a growing economy, but high inflation can reduce the value of money, making it essential to adopt strategies to protect your savings.

Inflation and How This Impacts You

Inflation impacts everyone, but its effects can be worse on those who do not plan for it. Here’s how it can affect your finances:

1. Decreased purchasing power: as prices increase, your money buys less. This can make it harder to maintain your standard of living, especially if your income doesn’t keep pace with inflation.
2. Reduced savings: money kept in a low-interest savings account can lose value over time if the interest earned is lower than the inflation rate.
3. Fixed income challenges: people earning fixed income, such as retirees, may find it harder to keep up with rising costs, because their income does not adjust with inflation.
4. Increased cost of living: everyday expenses, from groceries to utilities, become more expensive, squeezing household budgets.

How to Beat Inflation with Strategic Investments

Investing is one of the most effective strategies to protect your money from inflation. By making well-informed investment decisions, you can potentially outpace the rate of inflation and ensure that your money retains its purchasing power. Here’s how we can assist you:

1. Invest to grow your money: investing allows your money to grow over time, outpacing inflation. Whether you’re saving for a trip, a family wedding, or an emergency, investments can provide better returns than traditional savings accounts.
2. Start small and scale up: you don’t need a large sum to start investing. Begin with what you can afford and add more as you go. At APS Bank, we offer various investment products with different terms and conditions, helping you build or expand your portfolio.
3. Tailored financial plans: understanding your current and future financial resources is crucial. We will help you assess your income, spending, savings, and existing investments, providing a clear picture of your financial health.
4. Expert advice: our investment advisors offer free consultations to understand and assist you in setting up your financial goals. They create tailor-made plans by considering your risk appetite, investment term horizon, and your future financial needs.
5. Diverse options: we offer a wide range of investment options including local and foreign bonds and shares, ETFs, mutual funds, foreign currencies, insurance policies, and pension plans. Whether you want steady income or higher returns, we have the right products for you.
6. Regular review and adjustment: as your life circumstances and the economic environment change, it’s essential to regularly review and adjust your financial plan. Our advisors will help you keep your plan effective.
7. Monitor investments easily: with myAPS internet and mobile banking, you can monitor your investments 24/7, access detailed insights, and download reports, keeping you informed and in control.

Get Started with APS Bank

Investing is key to help you beat inflation and secure your financial future. At APS Bank, we offer a comprehensive suite of investment services to meet your financial needs:

• Execution-only: we execute your investment decisions.
• Advisory: we provide strategic advice while you make the final decisions.
• Discretionary: we manage your investments based on agreed objectives and risk appetite.

Whether you’re new to investing or experienced, our team is here to help you reach your financial goals. We offer free financial planning, a variety of investment products, and tools tailored to you.

Ready to take control of your financial future? Reach out to our team by filling in the form below. Our team of Investment Advisors are always ready to provide the guidance and support you need to make informed investment decisions. Together, let’s navigate the challenges of inflation and secure a prosperous future.

Approved and issued by APS Bank plc, APS Centre, Tower Street, B’Kara BKR 4012. APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994. Terms and conditions apply and are available on request.