Best bank for Small businesses

[Blurock]

So an investment at 8% p.a. less 5.3% inflation less 18 - 20% tax may give me a nett return of just over 2%? Is it really worth it?

Many elderly people are in financial trouble because of this. When they grew up inflation was not an issue and one could "save for your old age". However if you are dependent on fixed deposit interest for an income, specially in a low interest cycle you will not earn much. When interest rates rise, inflation rises even more, so you are in a catch 22 situation.

Blessed are those who made provision for their retirement by investing in inflation linked investments such as properties or businesses. Rental income that grows with inflation or recurring annuity type of income is a good hedge against fluctuating interest rates and inflation cycles.

Pity I did not know this when I was younger!

[Miro Bagrov]

I agree with you.
The banks always offer a bellow inflation return to clients. Most probably because people do not understand inflation and money.

There are still ways to make money, but it requires more skill than in the old days. For example, I use fixed rate gov. bonds to hedge against interest rate dips and use inflation linked to hedge against CPI increases.
It's not perfect though, nothing is.

Here's my portfolio for example:
This is the return on all my money held, even the money in my wallet. Some is cash, other invested. Excluding business money.

Nominal Rate of Return:
08 Jan 2011:
8.00%
07 October 2011:
7.72%
12 October 2011:
7.48%
12 August 2011:
7.89%
11 Feb 2011:
9.01%
13 May 2010:
8.37%
7 May 2010:
8.58%
1 May 2010:
8.66%
27 April 2010:
8.6%
26 April 2010:
8.65%
23 April 2010
8.7%
10 April 2010
8.7%
30 March 2010
8.92%
1 March 2010
3.46%
28 February 2010
8.08%
1 January 2010 - Portfolio Created
0.25%
(The Rate of Return is calculated on the weighted return basis of every asset class in the portfolio. All assets are included, including cash reserves.)

The other important way to make money from money to to reduce inflation....
This is what the average South African pays more for on a basket of products:

CPI 6.0 Oct, 2011
PPI 10.1 Nov, 2011

(Source: http://www.resbank.co.za/pages/default.aspx)


That is not necessarily what I pay for. I could pay more, or less.
What if I found a way to buy the same products cheaper somewhere else... Then all of South Africa would be in inflation, and I would be in deflation (relative to them).
Simple example, I decide to stop cooking, and live off takeaways -- Now the takeaways much 40% of my expense budget as oppose to just 5%. Relative to others, "Food Prices" have risen for me, because a plate of food now costs R35 instead of R3.5.

So, ultimately, I just want to say, we have a very big hand in what we pay, and how much, and if our lifestyles are reckless no investment decision can save us from ourselves.... Truth.