What would you do if you woke up tomorrow and half of the money in your
bank account was gone well depending on how you respond during inflationary
times this may well end up being the case because as you're probably aware
inflation is here and it's here to stay fortunately despite its wealth crippling
nature there are numerous ways around it which i'll share in this video and if
you're new to the channel then hit the subscribe button below for more
life-changing content whenever i'm talking to someone about inflation often
find it sad when they don't fully grasp its effects on not only their finances
but their quality of life as well it's kind of funny that most people have an
alarm system for their house to protect their most valuable possessions yet
they'll knowingly let economic factors like inflation steal their money in
broad daylight put another way not maneuvering around times of high
inflation is kind of like being offered a raise at work the opportunity for more
money is there yet you decide not to take it now for those who have at least
some degree of financial education managing inflation seems like an obvious
thing to do but just to make sure we're all on the same page when it comes to
inflation let me briefly first explain what it is and how we are experiencing
it on a day-to-day basis inflation is a sustained increase in the price of goods
and services which in turn reduces the purchasing power of the money you have
examples of this are when you go to the store and milk and bread have no shot up
in price meaning that your grocery bill just got a bit more expensive
alternatively when you go to the gas station you see the price you're paying
to fill up rises faster than normal again this is inflation at work
essentially because of inflation you're now going to have to hand over more
money for the same goods you used to be able to buy with noticeably less money
the next question we must answer before i explain how to invest with inflation
is why the hell do we have inflation in the first place i mean do prices really
need to ever go up i don't know about you but i prefer to pay less when i go
to the store or shop online and i'd be willing to guess that you feel the same
well inflation is a byproduct of three financial phenomena with the first being
demand pull inflation demandful inflation takes place when more money
becomes available which we've seen recently sued the printing of trillions
of dollars in the united states in the form of stimulus checks and other
governmental programs now while these acts of supplementing the incomes of
those who need it most may appear to be an act of kindness by the government
there is an ulterior motive to this mass distribution of money what is that
motive you may be wondering stimulation by giving out money generally to those
who will turn right back around and spend it the government hopes that the
spending will reignite the economy but this increase in demand also leads to
prices going up which is part of the reason you hate to shop now next there's
cost push inflation which is the direct result of production costs rising think
about how limited most elements of production have been over the past few
years for instance there's been a major shortage of raw materials that are
needed for most items that we can use on a day-to-day basis moreover given that
many people have had restrictions on their ability to work generally speaking
production has been down which again pulls available supply out of the market
raising prices the mix of these two elements is perfectly demonstrated in
the housing market raw materials like lumber have been in short supplies of
light and when this combined with construction workers inability to build
it's no wonder many real estate markets are hitting new all-time highs year over
year finally there's built-in inflation built-in inflation is a lot like
exercising when trying to lose weight generally speaking the more you exercise
the hunger you get however when you get hungrier you tend to eat more which then
requires you to exercise more to burn off that food essentially you find
yourself in an endless cycle with no break in sight while this is exactly how
built-in inflation works as laborers demand higher pay the cost of production
increases which can raise the cost of living when the cost of living increases
laborers might begin to demand higher pay each factor influences the other
resulting in a cycle and the cycle is typically instigated by the two other
forms of inflation we just talked about now in a minute i'm going to break down
some of the best strategies that you can use to invest with inflation but before
i do get into those dues we need to go through some of the don'ts when going
through times of rising inflation the first major mistake most people make
during times of rising inflation is maintaining high levels of spending to
put it bluntly most people couldn't afford the things they bought before
inflation spiked and now acquiring those same items has become that much more
expensive this is all to say that a good offense during inflationary times is a
solid defense so defending your wallet is what you're going to want to do
second after committing to spending less you're going to want to ignore the
advice of saving your money i know this is kind of weird advice to be giving out
but as i mentioned earlier the money you leave in the bank accruing next to no
interest and routing to inflation is as safe as about a cheesecake in my fridge
so it's only a matter of time until it's gone next there's the mistake of relying
upon raises and promotions at work to help you sidestep the effects of
inflation as you've seen over the last little while when prices increase one of
the first things companies do to offset the resin cost is to dispose the costs
elsewhere in the company hate to say it but as you as an employee you are a cost
then as such your employer will likely be looking at your salary as a means of
meeting their cost reduction needs as such if you're lucky enough to keep your
job during tough economic times thinking that you can rely on raises and
promotions may be wishful thinking finally we have the mistake of failing
to invest you hear it all the time that you want your money to work for you
while this is true under any economic state it's doubly important during times
of rising inflation however it's not much help for me to tell you to invest
without actually giving you some options to consider when investing so let's get
into that now at a high level when investing during times of rising
inflation you're going to want to focus your resources on what's known as
inflation protected assets these are assets that will continue to thrive no
matter how bad inflation gets one of the first assets that meet this requirement
are cryptocurrencies over the last little while i've been thinking a lot
about why crypto investments have been so popular and one element of this form
of investing that obviously cannot be overlooked are the returns for instance
solana one of the most popular cryptocurrencies in the market saw an
increase in price of almost ten thousand percent in 2021 that's quite the least
from an already impressive 25 increase that the s p 500 experienced well at
first i thought many of these crypto investors were just greedy seeking out
these levels of returns then i started to think more about inflation and it hit
me i realized that investing in these high stake high returning assets is
almost mandatory given the current state of inflation we find ourselves in but
besides investing further returns many of these most popular cryptocurrencies
out there today possess a key characteristic that makes them strong
tools during inflationary times which is limited supply for example there will
only ever be 21 million bitcoin in existence but the government can print
as much money as they want which i explained earlier is why we're in this
inflationary mess in the first place as such the value of assets like bitcoin
likely will not see as much downward movement as fiat currency making it a
hedge during inflationary times like these ones however i know there are many
cryptoskeptics out there so let's move on to the other three tried and tested
ways of investing with inflation that will certainly keep you ahead of the
curve the second option you have when it comes to investing with inflation is to
invest in a business now when i say to invest in a business i don't necessarily
mean you have to start one of your own sure you can and if you can make it work
then it can be one of your most powerful tools for sidestepping inflation but
fortunately there's an easier way to use business ownership to do your advantage
during these tough economic times your other option for being a business owner
is to invest in them through stock ownership let me explain why doing so
works so well by asking you a question have you ever seen companies lowering
their prices over time no no you haven't let's face it it's not the business that
loses when costs go up it's the end consumer people like you and me will
have to absorb the brunt of the financial market's chaotic state while
companies continue to thrive however when investing in said companies you can
offset a lot of that harm finally there's investing yourself and if you
ask me this is one of the most effective ways to invest when inflation is running
wild you see i am definitely a fan of investing in the other assets i just
went over but the issue with them is that they lack the same upside potential
that investing yourself has to offer let me break this down a little bit further
let's say that you invested a thousand dollars in bitcoin at the start of 2021
at year end the world's most popular cryptocurrency rose in value by roughly
70 which by all measures is incredible and
that one thousand dollar investment would now be worth seventeen hundred
dollars the question you need to ask yourself is did that monumental return
really help me get that much ahead of inflation with small investments you can
easily make the case that this did a little to move your financial needle
this is why unless you're investing large sums of money self-investment is
the best investment with that same a thousand dollars you could easily
acquire a new skill that could start paying you a thousand dollars or more a
month now sure it will take you some effort to not only develop that skill
and then start using it to make more money but even when investing there's
the cost of your time researching the assets you want to acquire and the
constant dread of a market correction this is all to say that there's no such
thing as a free launch in life but you already knew that not to mention when
you self-invest you have total control over what you've acquired you can use
that new knowledge or skill at will whereas once we from elon musk can send
your tesla stock in the toilet or your dogecoin to the moon with more control
generally speaking comes more upside potential in fact this is exactly why i
built my course side hustle success in the course i teach my students how to
learn a monetizable skill they can use to make thousands of dollars a month
online from scratch and outpace inflation with ease if you're not
already making money online and want to be learn more about side hustle success
using the link i left in this video's description therefore this is all to say
that if you want to fend off inflation all you need to do is outpace it which
you now know how to do thanks for watching if you're new to the channel
please hit the subscribe button below and keep watching what are the next two
videos to keep leveling up your money game