Calm before the storm and cost inflation

 

Having live in the age of fast manufacturing, I grow up learning that fashion and plastic stuff only reduce in price (at least for the exact same item). Off seasons handbags and clothes goes to discount section before falling into warehouse rack. So you can imagine my jaw-drop when I saw Universal Traveller selling a 24" Jean Francois travel luggage for RM258 after massive sale recently (20-24th April 2016 to be exact).  I had bought the same exact bag from them in Mar 2012 for RM180! That accounts to 43% price hike in 4 years versus official inflation that should be compounded to about 13%. 

In fact, I have a long list of items that shows my cost inflation (not lifestyle inflation) is nearer to 9% year/on-year instead of the official 3+%. Does the same goes with you?

I could understand food demand has soar globally and am actually quite amaze that we are still able to import so much food. Malaysia are so reliant on imported food that we expose ourselves to a lot of risk in food shortage or famine across the globe.  But for durable items where the cost everywhere else is fighting deflation, I think it shows that most business doesn't care about fair trade nor do we when we buy things without considering if it were produce by child labor. 

When GST was implemented, our government protected us through the Anti-Profiteering Act by restricting certain margin hike for 18 months. This rule will come to end this June 2016. So we could expect price hike of fast moving consumer goods between Jun and Jul.

What that means to you and me is our living cost on processed food, personal care, household items will likely jump another few percentage point come this July. Probably the reason why economist are seeing a more bleak outlook in 2017.

Common consumer won't be able to do anything but we could help ourselves and our economics -  short term by stocking up earlier or long term by conscious spending and be contented with less. 

If you find a good deal in May, you can consider stocking up dried pasta, grains to feed your family for a start. For personal care items, buy your shampoo soaps at beauty clearance event for about 50% off retail. 

Reject buying hike-up items, even if it's something you live with usually, unless it's death and live matters. Do not shop at malls that overcharge parking or facilities. Spend less time in shopping malls (am really guilty of this because my friends only know one place to go - the malls), use the time to learn something new and make ways to cool your house. 

Live with less items. Many people have proven that our lives are equally good with 200-300 items or less

Farming is not the norm here but I do suggest we start to grow some edible plants so we could all help reduced our food import bill. You could also invest some for your food security - a self-sustain hydroponic set in the size of 6ft*4ft with pond (comes with 30 perch fish - the omega fish) now cost RM3,200-3,500. Or build yourself one with youtube, a motor and some scaffolding pipes.

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