“If I have a million dollars, I will …” is a sentence that everybody can complete. However, only 10% of the population’s can actually achieve it and less than a handful goes beyond the millions.

I still remember exactly 6 years ago, one of my respective teachers talked about his dream of getting a million dollars. He was about 40 years old and he said, “If I have a million dollars now, I will retire, put the million into my bank’s savings account and siphon the yearly interest until I die”. He said the interest from the million is more than enough for him to live a simple life.

What he said made perfect sense to me while I was still a kid and it probably makes sense to some of you in the present too.

Nevertheless, if my teacher were to get his one million dollars 6 years ago, the million would worth significantly less (even with the interest) than 1 million due to inflation. Not to mention he still has government tax to pay, monthly expenditures, holiday trips, children’s education and random doodads to spend on.

The value of the million will decline over the years  and I’m not entirely convinced that he could buy his own coffin with the million he owned.

Look, I’m not here to mock my teacher’s financial knowledge and I’m definitely not here to teach you how to spend your million dollars. I wrote this article to raise the awareness of the constant decrease in buying power with our currency.

You may have noticed that price of goods have been increasing steadily over the years and packaging of goods have shrank while the price remains unchanged. Our salary on the other hand had not moved a bit. All these are signs of our currency declining in value.

So why would the currency decline in value?

It would take pages to explain why, but to keep this article simple and easy to understand, it is because the governments are printing money out of thin air. That is how our million shrank in value if it is kept static in the bank.

But banks offer high interest rates!

Well that’s spot on! But you’re not told the next few points. Your savings account’s interest rates are never higher than the inflation rate and that the interest on your capital is also taxed like a normal employee.

You see, bad advice comes almost from every corner of our society, even from your education institute. Here is another, “You won’t lose a penny if you save your money in the bank”. Of course you wouldn’t lose a penny, the 1 million you saved in the bank 6 years ago will always remain 1 million (or more), and it is the behind-the-scene stuff like inflation that is seeping the value of the 1 million away.

However, with proper education and planning, you can turn a million dollars into a few millions or even billions if you’re that lucky.

So, if I have a million dollars, I will definitely not save it in the bank. This does not mean that I should go on a spending spree too.