There has been much talk about T-Bills for the past few months, as High Inflation & Interest rates surge globally. Singapore being a small global city is also not spared with the large winds of financial change. Headline news of High Inflation continue to bombard Singaporeans in everyday lives. But with inflation hitting 6%, is it worth investing in T-bills of around 4%?
To try to answer this financial question, I guess it depends on what u are comparing it against and the timeframe. There is hardly anything that is absolute and everything is relative to something. In science, distance measurements are relative to origins and even time is relative to your frame fo reference, accordingly to Einstein's theory of relativity.
Math will tell u that 4% - 6% is equal to negative 2%, which mathematically means it's not worth it to invest as u would be losing 2% of your money value in a year.
However many things in life are not a simple straight line. Because it depends on what u would have done seperately with your money if it is not invested in T-bill. Would u spend it instead on a luxury bag for example? Hence getting a negative 6% return 😂
Or would u do nothing and left the excess cash in the bank earning 0.1% interest? Or put it into HSBC savings 5.35% or RHB Fixed Deposit 3.9% promotion!?
Or is it just a Bond Ladder placeholder to capitalise on better % Investment Opportunities?
Everybody's financial situation is unique and different, and there are many priorities that demand our everyday attention. Some find joy in shopping, like my wife and daughter, while I find joy in making them happy 😍 May we all choose to spend our time and monies wisely!
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