You know how I describe keeping your money in the bank as slowly killing your money (see previous post) – because its value slowly erodes away?
Well, I have an in my face example to share of the loss of the value of money! Most of us have a periodic (weekly, monthly, etc.) bulk grocery shopping done and would have some standing items on the list. More often than not, we don’t observe/pay attention to the change in prices when we buy those standing items.
Well this month, I placed my order about three weeks ahead of delivery date and a couple of days before delivery, I went back in to add a few item and alas, these notifications popped up!
Do you notice the small changes in price for each item? I probably wouldn’t have noticed the price difference to previous orders, if I was ordering and checking out on the same day! These however are a clear demonstration of erosion in the value of money – what would have originally cost me £8.92 would now cost £10.12 (£1.20 more than original price, representing 13% loss of value in the space of three weeks)!
The changes may not always be as high and probably not as many in such short space of time, but it is a clear demonstration of what I talk about when I say not to take comfort from looking at your bank balance, rather once you have your emergency funds tucked away; invest, invest, invest – at least that’s what I’m doing.
To be fair and for the purpose of full disclosure, a couple of notifications also popped up about price reductions, but the purpose of this post is to demonstrate erosion of the value of money in a manner that we can all relate to, so I am focusing on the price increases especially as it’s not just one or two, but several items in my shopping basket.
There will absolutely be some wins and some losses along the line when investing. In the long term though, in the event that I don’t make huge gains from my investments, a net gain that affords me the chance to still buy the standing items (or indulge in the same activities) on my list, if I chose to, will be a WIN. Do you agree with this view?
Let me know in the comments below.
Reminder: these are my personal views (and experience) and not financial advice so do your own research before making any financial decisions.
📝 Originally shared under my first blog, bitalks; part of the journey that shaped Life’s Riches.