Welcome back. I'm going to show you how to protect your money from inflation.
Because inflation erodes away. A lot of the purchasing power of people's
hard-earned money. So, in this video, you're going to get a vision of how you
can have inflation actually work for you instead of against you. You'll understand
how to overcome the obstacles of how sometimes people are rowing upstream at
1 or 2 miles an hour in a bank or credit union and the current of inflation is
coming down at 4 or 5. You're going backwards. How you can transform and have
inflation to work for you instead of against you. And also I'll give you the
specific action steps on how you can link the returns on your money to
inflation.
So, how does inflation impact us and sort of take us by surprise? oftentimes, if
inflation is averaging 5% the cost of living will double about every
14.4 years. If inflation gets to double-digit which it has been
on several types of goods and services such as health care costs. Inflation that
10% will double the cost of living about every 7 and a half years. Well, what
does that mean? Your purchasing power is cut in half. So, we find people that they
maybe retire and they think they can get by on $50,000 a year of supplemental
income on top of their Social Security or whatever. What ends up happening is in
about 7 to 10 years that $50,000 now only buy about the same amount
that 10 years earlier 7 years earlier, they would only have half as
much that they could acquire in haircuts, gas, groceries, golf green fees. So, that
means you now need 100,000 divided the same loaves of bread and and
gallons of gas that you used to be able to buy for 50 thousand. And if that's
happening every 10 years and if you live maybe 20 years in the retirement,
that means the cost of living could double twice or 3 or 4 times and
you're going to need 200,000 in income to buy what 50,000
used to buy when you grow it into the sunset and retired the first day at
maybe age 65. So, how frustrating is that when you don't have enough money
to be able to live the retirement or the future that you dreamed of? And we're
forced to rely on charity or our children for support. I want to empower
you on how you can have inflation work for you instead of against you. It's
amazing how many financial advisors and that I've trained in my career well over
3,000 that do not understand to link the returns their clients are
getting to the things that inflate. And when I say that, sometimes I get this
deer-in-the-headlight look. So, I'm going to simplify and give you the concept of
how to have inflation work for you instead of against you. How to... You know, I
don't like inflation any more than probably you do. But it doesn't hurt me.
I go, "Okay. So, it is." Because I've always earned a rate of return of about 5
and a half percent greater than the inflation rate at that time. So, how do
you link your returns to the things that inflate? I'm going to simplify it here
because I have other videos that explain this in more detail that I would
encourage you to view. But basically what I do with my money is use a strategy
called indexing. Now, even a lot of savvy financial advisors don't even really
understand indexing. They think I'm talking about an index mutual fund. No,
It's not that. What I'm doing is I'm linking the returns that I'm earning to
the things that will be going up in price. The things that go up in value. And
so, what I am experiencing that if inflation is growing at 5, 6 or
7 percent. The cost of living is doubling every 10 years. Then I'm linking
my returns to those items in a way that allows me to earn 12% if
inflation is at 7%. I mentioned I've always earned about 5
and a half percent greater than the inflation rate at a given time. So, if
inflation is 3, I've always earned eight. If inflation is
7, I earn 12 or more. If inflation were to go to 15, I've actually
earned 21% in that type of an environment. And so, what you're
doing is you're creating a strategy to where when you retire, you don't have to
worry about inflation because you're sort of coming along for the ride,
so to speak. Inflation is actually helping you instead of hindering you. The
key is to be able to earn safely a rate of return that is equal or greater than
the rate of inflation or what's happening.
You're going backwards. Always link your returns to the things that inflate. And I
would encourage you to watch other videos or maybe read one of my books to
understand how to do that. Number 2, understand you can't row upstream at the
rate of one or two miles an hour. When the current of inflation is coming down
at 4 or 5, 6, 7 or else you're going backwards and you will
outlive your money. And I want to empower you so that you can have confidence in
never having to rely on charity or your children for support when you understand
how to take control of your money. So now, that we've talked about the negative
impact of inflation on your hard-earned money, before you start learning about
how to link your returns to the things that inflate, there's a second key
element that erodes away a lot of people's purchasing power in their
retirement years. And that's the negative impact of taxes. So, I would encourage you
to click here and watch this video next. So, you can understand the tax and
inflation power.