This word has a strong bond with negative feelings, say “inflation” at any time in front of anyone, and immediately you will get back some sort of frustrating expression and muffled moan with words like “oh, what a nightmare!”
Why does inflation have this negative impact!?
Firstly, its definition points to increasing the prices of everything, especially goods and services. That leads people automatically to find difficulty in keeping the same standard of living using the same income. In a simple way, Inflation means the money you get will not be able to buy the same goods and services you used to buy priorly. That’s why people deal with it as if it was a nightmare.
Can inflation be useful anyhow?
The surprising answer is, the increase in prices is basically a useful tool to keep life’s inadequate growth. That growth includes salaries hand in hand with prices. That kind is economically healthy and it has been estimated worldwide to have an average percent of 2% or less annually.
Types of inflation. What is useful and what is not?
There are more than 10 different types of it. To know deeply about every category, I think you need to study a minimal level of the economy. But, you need to know the minimum level of important information about that topic.
For example, these types are important:
- Balancing inflation: in this case, the prices increase by 3% or less annually. As well known, a 2% increase is healthy for all economic sections in the society, it encourages purchasing power and also plays a role in increasing salaries.
- Accelerated inflation: the prices increase by 3% to 10% annually, this type is common in economic crises.
- Extreme inflation: one of the worst types, the prices can increase by almost 50% monthly. It happened in wartime.
Situation in MENA region
As the situation of increase in prices is considered a global crisis, from 2020 till the end of 2021, and because of COVID-19 pandemic, the inflation wave hit almost 71% of the developing economies which is double the rate in just one year. Developed countries as well are affected by inflation of more than 5%. Regarding MENA region we are still suffering! Here is this photo (from the official site of Arabic CNN) declaring how badly all countries are affected during 2021, still in 2022, and expectations for 2023. You can find countries reaching 8% inflation like Egypt, on the other hand, Lebanon country is not found where the inflation is highly extreme and the country has officially declared bankruptcy.
Back to History
The worst memory of inflation was of Second World War in Germany. Inflation was extremely destructive to the whole economy. Also, in Zimbabwe in the twenties of the last century. Recently, the nearest example of inflation was in 2008 due to inflation in the real estate market, petroleum, and its products.
How can it be solved?
This economic issue is present and continuing forever, whatever its good or bad effects. But, in case of crisis and extreme inflation, Central Banks Internationally is responsible 100% for controlling that and creating solutions to hold down prices, especially basic prices like food and gas.
How can I survive at the individual level?
I am not an expert in economics and have no idea what the central banks’ plans will be! In my humble opinion, the most important point is how we can survive as individuals. Everyone can be affected directly by any inflation in the prices of basic life needs like food, gas, services, and materials. Especially if that inflation is not accompanied by increases in salaries. So, you need to learn how to survive any inflation wave whether it is soft or destroying!
Here are 5 solutions for you to survive any inflation
- Know some information about it. As well know, information is power. So, you need to know at least the essential knowledge. Our article here is a good start for refreshing your mind.
- Earn money from more than one source. It’s a must nowadays to learn how to get money basically from more than one source. Then you have to learn how to make a plan B. I believe in the British quote that says: “you have to start a plan B when you don’t need it, because you don’t know when you will need it.” That is exactly what is needed in crisis times like inflation. Let’s imagine when a pilot – for example – lost his job for almost 20 months due to a pandemic, how could he survive financially!? Almost two years with zero income! If he – for example – has second or more income sources, of course, that will help.
- Make one of your income sources outside your country. That is extremely important these days. And also it’s very easy and flexible now because of the internet facilities. To avoid any big crisis due to currency inflation or economic stagnation, income from different currencies is the best solution.
- Develop a talent or service for your own that you can get money for it. Usually, inflation affects goods more. So, services can balance that increase. You can exchange your services for goods you need. With this idea, at least you will keep your basic needs available.
- Finally, start your business in a sector that is inflated. If you can do that, go ahead. In any crisis, always there are losers and also there are beneficiaries. Let’s imagine you buy ten products with x money. Then buy them after a few months with your profit adding to the increasing inflated price. That is extraordinary profit. That advice is risky somehow for nonexpert persons, but if you like it, ask an expert and go ahead.
At the end of my words, I’d like to add a simple equation that will solve any inflation in our life.
Inflation = increasing in prices + fixed salaries.
The solution = increasing prices + increasing salaries.
In short, keep your eyes always on increasing your income. This is the simple golden rule to live financially stable. One of the best ideas to keep financially growing is setting up your own business whereby being your own boss, you can create a lot of revenue out of your company. If you would like to know how to open any business in Dubai and start growing financially, contact one of the best business setup companies in Dubai. Masar Al Ameen Group is a Team of experts that will facilitate the process in a very fast and easy manner.
Read more about 10 TOP successful business ideas in Dubai.