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What Giggers Need to Know About Inflation

Posted by Natalie Amadea on Feb 25, 2022 1:43:11 PM

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Photo by Brooke Cagle on Unsplash

With talk of rising Malaysian inflation reaching 2.3% in 2022, as forecasted by Malaysian Rating Corporation Berhad (MARC), Malaysian purchasing power will be directly impacted. We may all be surprised at how expensive things have become. Here are some top tips for taking advantage of inflation and getting the most out of your hard-earned money.

During the most recent episode of Borak Kerjaya, we discussed how inflation can affect the daily lives of giggers. The first question that arose during the course of the life was, "What exactly is inflation, and what causes it?"

Inflation is defined as an increase in the price of goods and services. There are 2 possible causes: supply push and demand pull. According to US economist Milton Friedman, inflation occurs when there is a rapid increase in the money supply that is not followed by an increase in output/productivity.

In simple terms, if inflation reaches 2.3% in 2022, everything will cost 2.3% more than it did a year ago – for instance, adding RM69 to an RM3,000 mobile phone. The average Malaysian household spends RM4,534 per month, which could add RM104 to their monthly expenses.

We conducted a poll among our giggers (37 respondents on Whatsapp and Instagram) to better understand what giggers think about inflation and how it affects their day-to-day lives. 46% of respondents are giggers, or independent contractors who move from one gig to another on a regular basis. They work more than one job to cover their living expenses and admit that inflation has had a significant impact on their lives.

 

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People in our gig community face 3 major challenges in the face of inflation: inconsistent cash flow or income, access to healthcare, a retirement fund and a lack of an investment portfolio. 

 

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The next question we all want to know is whether inflation is good or bad. If you are a salary/commission earner, inflation will hurt you because the cost of goods and services is rising faster than your income. Inflation, on the other hand, would be beneficial if you owned an asset because it would cause the asset price to rise.

It's also advantageous for borrowers, particularly if the interest rate is lower than the inflation rate, because the value of the currency used to repay the installment is less than the value of the loan issued.

Giggers must learn how to take advantage of predicted inflation in order to keep up with it. Check out the following actionable advice from our guest speaker, Mr Farhan Nasir, co-founder of Aurachnid:

 

📝 Have multiple sources of income to meet your earning goals.

By taking up more diversified gigs, you can stretch your earning goals and you can use a portion of your earnings to purchase assets such as real estate, stocks, or precious metals such as gold. The high cost of non-replicable assets, on the other hand, may make it difficult for giggers to acquire one. You can begin your search for lower-cost assets. Consider companies like Aurachnid, which tokenise gold and make gold ownership available to lower-income giggers.

 

⭐  Invest in your skills

You can become a more skilled gigger and earn more money by honing your existing skills and learning new ones. The next critical step is to understand your worth and the market value of your expertise or skill. Don't be afraid to decline gigs if this value isn't appreciated by others.

 

💛 Expand your network

Widening your network will lead to more opportunities. A larger network equates to a higher net worth! If you're a gigger, networking is one of the most important things you can do to advance your career. Building a wide network can help you keep your job prospects and income stable. Furthermore, building and maintaining a strong network will provide you with numerous advantages such as building a credible presence, attract new gigs and help you stay on the ball!

 

To learn more about the giggers' guide to inflation, watch the new episode of Borak Kerjaya

Watch Borak Kerjaya


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Topics: gigwork, Giggers, NavigatingTheGigEconomy, freelance