Every year, the cost of living increases. Food is more expensive, rent goes up, services cost more and our luxury items become even more of a luxury. From the image above, we can see how much a few food items increased in four years. After cooking for the holidays, we’re sure you can see how much food has increased in the past year too.

With the cost of living increasing, are your investments increasing at a higher rate?

Every day we sit with potential investors who are scanning the markets for the “best” return rates. However, there’s no such thing as the “best” rate, it simply doesn’t exist.

What you need to look for is a customised rate based on your needs, requirements, risk appetite, investment term, access to capital and other factors, including tax. Whatever return that you get on your investments, it needs to be higher than inflation.  Some products within your portfolio will have a higher return, whist others will have lower returns.

If the rate you obtain after fees and tax is less than inflation you will not be able to maintain your purchasing power.  From the figures above, you can see that prices have almost doubled in five years (based on what they cost in December 2013).  This means that your investments and retirement planning needs to be growing at an equal or faster rate.

If you are concerned about the returns you are getting on your money with the banks, investment products and elsewhere, make sure we’ve spoken so that you can rest, assured that you’re getting the best return on your investment!