Business News

Monday, 12 May 2014 | MYT 12:00 AM

Drought not only drying dams, but also our savings


THE drought is not just drying our dams. It is drying up our savings too.

I paid about RM5 for a comb of banana last year for the many banana smoothies we made at home. Now I pay more than RM8.

The recent two-month drought caused a 60%drop in production of local fruits like bananas, papayas, guavas and limau kasturi.

As for water, we are already paying a higher tariff.

Drought is causing price increases in the US where grain production has dropped and is of poor quality.

In Mexico, growers are stripping their lime trees bare to export to California as the price per 40lb box has jumped from US$40 to US$120.

Drastic measures 

Many never take environmental factors into financial planning. The recent sharp price hikes on food and water,not just in Malaysia but globally,has forced us to become more aware.

So do we eat less? Use less?

No, these are not solutions to rising costs and diminishing natural resources. But re-setting our habits and innovations are!

Active intervention

Just like dying crops, dwindling savings require active intervention.

In the US, growers are planting drought resistant corn and wheat to get better yield. Likewise with growing our funds. Active investment may need us to break out of our comfort zones.

Depending on your goals, returns from fixed deposit (FD) were enough in the past. Not today. Look for innovative investments like the Private Retirement Scheme (PRS), approved by the Government to encourage private retirement savings that aims to grow funds at almost double-digit.

Complementing our FD and Employees Provident Fund savings, PRS can help our retirement savings grow quicker.

Though I have been "burnt" by investments in stocks and bad property buy, such experience should not deter future investments.

My painful experience serves me in questioning future property investment stringently and assess returns based on my goals and time allotted for returns.

Managed well, property and stock investments are assets that can grow our funds to match the rising cost of living.

To mitigate risks of investing in stocks, unit trust funds allow me the option to participate in the stock markets with risks spread out in different sectors and companies.

Work with your financial buddy who can help you build this portfolio and monitor for you.

The writer can be contacted at info@successconcepts.biz

Tags / Keywords: Financial Snacks , savings , personal finance

Property Related

advertisement

advertisement

advertisement