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The silent cash thief: how inflation steals 30% of your savings

23 Aug 2024

This article is for informational purposes only.

While holding cash may seem safe, the reality is that we are all vulnerable to the insidious “cash thief” known as inflation. Rising prices steadily erode the purchasing power of your money – a harsh reality that has become strikingly clear in recent years.

The latest inflation rate in Hong Kong climbed to 2.5%. What’s more, should the annual average inflation rate slightly increase to 3%, the purchasing power of USD 1 million today will further drop to USD 640,000 in just 15 years, reflecting a staggering reduction of over 30%.

Retirement spans decades, during which, inflation can relentlessly chip away at your hard-earned savings. Every aspect of your retirement – from housing to daily expenses to leisure activities – is at risk. Without adequate protection against inflation, your capacity to cover essential costs or enjoy life in retirement will progressively decline.

Therefore, formulating a robust financial plan and enabling your assets to grow steadily through passive income is crucial in defending the purchasing power of your cash and protecting your retirement. Looking for ways to earn stable income?

Explore saving insurance to plan for your future

There are life insurance with savings plans offering guaranteed returns and life protection with features such as the following:

• With just 5 years of premium payment, locking in a 15-year annualised 3.21% p.a. guaranteed return at maturity with peace of mind or up to annualised 3.9% p.a. guaranteed return at maturity when you choose the option to prepay upfront all premiums

• Safeguarding your family with a Death Benefit and different Death Benefit Settlement Options

Get in touch for a comprehensive financial planning

Check out our list of Signature CIO Funds available on Fund Library:

Fund Name
Signature CIO Balanced Funds

• The fund seeks to achieve moderate growth through capital appreciation and income accumulation over a mid to long-term investment horizon

• The fund invests a similar amount into equities and fixed income, with a slight tilt to equities. It also invests in commodities and alternatives

• Balanced allocation between equities and fixed income aims to provide upside returns while mitigating drawdowns
Signature CIO Growth Funds

• The fund seeks to achieve moderate growth through capital appreciation and income accumulation over a mid to long-term investment horizon

• The fund invests a similar amount into equities and fixed income, with a slight tilt to equities. It also invests in commodities and alternatives

• Balanced allocation between equities and fixed income aims to provide upside returns while mitigating drawdowns

Want to chat with our specialists directly?

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Alternatively, you can speak to your RM via myRM* on SC Mobile App to learn more

*Exclusive for Priority Private or Priority Banking clients

If you do not currently have an Investment Fund Account, follow the 4 easy steps to start investing now:

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Disclaimers

Important Note of Investment Products

Premium deposit, Equity Linked Investments and structured notes are structured products involving derivatives. Investment Fund is an investment product and some Investment Funds would involve derivatives. The investment decision is yours but you should not invest in that investment product unless the intermediary who sells it to you has explained to you that the product is suitable for you having regard to your financial situation, investment experience and investment objectives.

Risk Disclosure Statement

  • Investment involves risks. The prices of investment products fluctuate, sometimes dramatically and the worst case may result in loss of your entire investment amount. Past performance is no guide to its future performance.
  • Investors should read the terms and conditions contained in the relevant offering documents and in particular the investment policies and the risk factors and latest financial results information carefully and are advised to seek independent professional advice before making any investment decision.
  • Investors should consider their own investment objectives, investment experience, financial situation and risk tolerance level.

Foreign Exchange:

  • Foreign exchange involves risks. Fluctuation in the exchange rate of a foreign currency may result in gains or significant losses in the event that the customer converts deposit from the foreign currency to another currency (including Hong Kong Dollar).

RMB Deposit Service:

  • Renminbi (“”RMB””) exchange rate, like any other currency, is affected by a wide range of factors and is subject to fluctuations. Such fluctuations may result in gains and losses in the event that the customer subsequently converts RMB to another currency (including Hong Kong dollars); and
  • RMB is currently not freely convertible and conversion of RMB through banks in Hong Kong is subject to restrictions specified by the Bank and regulatory requirements applicable from time to time. The actual conversion arrangement will depend on the restrictions prevailing at the relevant time.

Disclaimer and Important Notes of Insurance

  • This webpage is intended to be valid in Hong Kong only and shall not be construed as an offer to sell or solicitation to buy or provision of any insurance product outside Hong Kong. Prudential and Standard Chartered do not offer or sell any insurance product in any jurisdictions outside Hong Kong in which such offering or sale of the insurance product is illegal under the laws of such jurisdictions. This webpage does not constitute a contract of insurance or an offer, invitations or recommendation to any person to enter into any contract of insurance or any transaction described therein or any similar transaction.
  • The material and information contained on this webpage should be read in conjunction with the relevant product brochure and for the risk disclosure, please refer to the product brochure.

Notes

  • This webpage does not constitute any prediction of likely future price movements.
  • Investors should not make investment decisions based on this webpage alone.
  • This webpage has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.

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