The story:
“Two men are hiking in the woods, and they see a bear. The bear is really mad, so they start running to get away. The first man says, ‘how are we going to outrun this bear?’ and the other guy goes ‘I don’t have to outrun the bear, I just have to outrun you.’ (laughs)
Because think about it. If the bear gets one guy, he’s not going to keep running to get the other.
In life, it means that you don’t need to be the best, you just need to be better.”
Life is not a race, until it is.
One way for the Reserve Bank to try to control rising prices - or inflation - is to raise interest rates.
This increases the cost of borrowing and encourages people to borrow less, to spend less, and to save more. Which is the desired effect.
However, it is a tough balancing act as the Bank does not want to slow the economy too much.
Rates will be increased until they work – or until too much pain in the economy is being evidenced. As a direct result (and intention) it is inevitable that those most exposed to such rate rises will suffer increased financial stress. Then the rate rises will stop.
You do not have to be fearful what that bear can do to you, just be sure you can outrun the bottom 10%!