Saving in a rising interest rate environment

The the latest repo rate hike of 25 basis points to 6.25% by the SA Reserve Bank (Sarb) prompts the question as to how South Africans - who are already under financial pressure - are going to deal with this, especially when it comes to their investments and savings, according to Jeanette Marais, director of distribution and client service at Allan Gray.While inflation remained relatively unchanged in October, SARB's Monetary Policy Committee (MPC) noted that it is likely to trend up, due to the depreciating rand, the worsening drought conditions and its likely impact on food prices, and the possibility of additional electricity price increases.   

"While a higher interest rate environment may ensure a better return on one’s hard-earned rands, inflation, if not taken into account, can have a devastating impact on one’s savings. Rising interest rates must be looked at in conjunction with inflation, to ascertain the real impact on one’s savings," explained Marais.
"Many people think that the cash that they put away will grow by the interest rate. But, they fail to account for the eroding effect that inflation has on their savings." Read More>>>

What is Inflation ?

Here is some plain talk about how inflation works and how to protect yourself against it. Why is it important to know about it? Well, every paper currency that ever existed has failed, usually ending in massive inflation. Every single one. Without exception. And it has already started worldwide. It affects every paper currency.I’m not talking about the usual, regular increase in the price of groceries.

Or the fact that we can’t outwork inflation: it grows faster than we can earn money, hence our increasing debt levels and lowering of our standards of living. READ MORE>>>

Debt is the barbarous relic.

When human beings discovered 10,000 years ago that the soil would provide more food than they could possibly eat, this changed everything.

For the first time ever, early humans could actually work WITH nature and reliably control their food production.

They were no longer dependent on unpredictable wildlife or the dangers of the hunt. Nor were they resigned to devouring an entire beast in one sitting, only to end up right back where they started-- in search of their next meal. READ MORE>>>