Tuesday, April 3, 2012

Solution to Fuel Price Problem

In the fluctuating economic, social, and political conditions of Indonesia, where the hottest issue is the tentative increase in the fuel price, one needs to have a cushion on his/her personal finance. It's known that an increase in the fuel price and increase one's cost of living through inflation and decrease in one's income (some cases might be the end of one's income through company's lay-off decision). Here are the following steps that might come in handy in order to prepare safety net before the event actually takes place.

  1. Avoid being actively involved in a mass demonstration, it does not and will never serve  as the core solution to the problem, it just adds to the damage (who knows you might end up as one of the victim being attacked by the law enforcement, severely injured, spiked medical bills for recovery)
  2. Re-evaluate your monthly personal financial statement, minimize your tertiary needs (luxury needs) and focus only satisfying your basic needs. Time to tighten your belt a little bit. Minimize the use of bad debts (credit mostly used for consumption - credit card)
  3. Replace the money you usually spend on tertiary needs towards self improvement, in other words invest heavily on upgrading your skills. The logic is very simple, as the decision of fuel price comes into action, many companies you work on will try to minimize their cost of production. Unless you upgrade yourself, you have weak competitive edge to remain in the company to sustain your income. The game is called the survival of the fittest (the ones with more competitive edge remain).
  4. Start learning other means of investments which can give you return that is not raced by the inflation rate. With the fuel price increase, it's expected that the inflation rate will increase, keeping your money in the bank will not serve as a wise move. One can now consider money market as an instrument which gives higher return than the bank with high liquidity or some other investment instruments (business -franchise, stocks etc)
The answer to anticipate the above problem is by upgrading yourself. Your personal finance will remain strong if you are continuously upgraded.

2 comments:

  1. point number 1 needs to be paid attention to by half of this country's young generation. They know it and yet participate in the haywire demonstration.

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