You can make money with your mind you can make money with your hands but one
way that most people overlook when it comes to making money is making it with
inflation if you've turned on any financial news lately you can miss
experts talking about inflation for the average person inflation is just a
financial consequence they must bear however for the financial elite it's
another opportunity to make money if you want to be in the second group then
you're unlocked because in this video we will be going over five ways to make
money with inflation and if you're new to the channel then hit the subscribe
button below for more life-changing content now before we get into how you
can use inflation to improve your financial position i have to make sure
you and i are on the same page as to what inflation really is i know you've
heard about it before and know that it can affect your finances in many ways
but just so we're clear let me briefly define what inflation is inflation is a
sustained increase in prices 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 now shot up in price meaning that your grocery
bill just got a bit more expensive because of inflation you're going to
have to hand over more of your money for the same goods you used to be able to
buy with noticeably less money the next question we must answer before
explaining how he can profit from inflation is what 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 phenomenon with the first being demand pull
inflation demand pull inflation takes place when more money becomes available
which we've seen recently through the printing of trillions of dollars in the
united states in the form of stimulus checks and other governmental programs
in fact people have more money to spend and this increases demand for goods of
which supply cannot always be met which drives up prices then there's cost push
inflation which is the direct result of production costs rising think about how
limited natural resources like lumber have been over the past year or so and
how their rise and costs have affected the prices of homes in the real estate
market i know personally i've had lots of friends simply get priced out of the
market because even the most basic of homes these days are outrageously
expensive this rise in prices is not only being driven by increased input
costs but people's willingness to overpay just to be able to get into the
market finally there's built-in inflation kind of like how you expect
your girl to give you [ __ ] if you like another female's picture on instagram
you'd also expect your salary to rise as the cost of goods around you go up
however of course this is a double-edged sword because if all of a sudden your
employer has to pay you more then in turn prices will go up which will prompt
people to ask for more money again and the cycle repeats itself into perpetuity
in fact this is one of the main reasons the prices of goods and services will
always rise over time and if you think prices are going up like crazy make sure
that you smash the like button below because you're 100 right in thinking so
so as you can see there are a lot of reasons why prices go up and let me tell
you that they are all unfortunate to experience now that you know what types
of inflation exist one thing that you must be clearly aware of are the levels
and severity of inflation you see not all forms of inflation are created equal
and generally the more aggressive inflation is assuming your assets do not
rise in equal proportions will make you poorer over time so to be able to profit
from inflation you must first be able to identify when you're in its presence so
generally speaking there are four speeds at which inflation works and the first
is creeping inflation no not the creeping you do on facebook to see how
your high school acts is doing 10 years later this creeping takes place when
inflation is mild and less than 3 percent a year generally the federal
reserve uses a 2 inflation target and as such we typically operate in a state of
creeping inflation whether we realize it or not next there's walking inflation
why creep when you can walk right walking inflation takes place when
inflation rates are between three to ten percent and when this level of inflation
takes place people start stocking up on goods to avoid future price rises this
is when you see shows like hoarders come back in style as people can feel better
about themselves for having bought tamp actors as a toilet paper by watching
people who are worse hoarders than they are now that you understand how
inflation works you probably come to realize that as people start driving up
the demand for goods this only makes inflation worse which is why walking
inflation is generally seen as a slippery economic slope next up we have
galloping inflation this is where inflation is 10 or more and this is
where trouble really starts to take place at this point prices are rising at
a rapid pace and people are starting to feel a major pinch in their pockets in
fact with galloping inflation it gets so bad that people will start to question
the decisions their political leaders for letting their economies decline in
this way and even foreign investors begin to lose interest in these markets
now if you're under 40 and live in the west then you have yet to live through
this aggressive inflationary times but i'm sure if you asked your parents they
would tell you how punching it can be to live with double-digit inflation finally
there's hyperinflation this is where prices skyrocket by more than 50 percent
a month sometimes when i see my heating bill at the start of the winter i wonder
if we were in a state of hyperinflation but then i just realized that i haven't
had my heat on for the last six months okay bad jokes aside hyperinflation is
the ultimate form of inflation punishment however rarely takes place in
fact the last time the us experienced hyperinflation was during the civil war
so while nothing is impossible chances are you won't experience hyperinflation
in your lifetime now at this point you probably know more about inflation than
99 of people on earth well i wouldn't exactly brag about this on your next
tinder date it's useful to know what inflation is and what causes it the
unfortunate truth is that most people go through life never knowing what
inflation is and how it affects their money all they know is that getting
ahead financially gets harder by the day and in many cases people give up on
themselves and turn to unnecessary spending to soothe their emotional
troubles as you can imagine this just adds fuel to the money burning fire and
is far from an enviable position to be in fortunately you know what signs to
look for when it comes to inflation and in a second you're going to become an
expert at profiting from these harder financial times as well so if you ask me
they're really two ways to combat inflation the two strategies come in the
form of asset management and income management first let's go over a few
situations where managing your assets will be crucial to getting ahead during
inflationary times then we'll dive into how your income will ultimately affect
your financial success so the first way you can protect yourself against
inflation increases is to tackle your variable debts you see interest rates
and inflation are positively correlated which means that as inflation rises
interest rates rise as well but more specifically variable rates go up if you
have a variable mortgage for example then paying down your mortgage is one
way you can protect yourself against sudden interest rate hikes now if you
have a fixed mortgage don't think you're invincible to inflation and its
associated interest rate increases if you have a fixed mortgage you'll know
that your mortgage rate is only locked in for a specific term which means that
when the term ends you'll be up for renewal and increased interest rates
will be coming your way too so again get ahead of your debts as you start to see
inflation rise in the economy the next thing you want to do when inflation is
rising is to avoid holding cash for long periods of time if you've been following
me for a while now you'll know that i think that you should only be holding
cash for emergency fund purposes this is because the longer you let your money
sit idle in the bank garnering no returns though more money you will let a
road to inflation as you probably guessed the higher the inflation rate
rises the quicker your idle cash disappears for instance if inflation is
two percent and you're getting a negligible rate of return on your cash
and you're losing a full two percent but that loss doubles when inflation rises
to say four percent now keep in mind that i didn't say you shouldn't be
holding cash at all i said specifically that you should not be holding cash for
long periods of time because as inflation rises the stock market often
experiences tumbling prices this presents a golden opportunity to buy
your favorite stocks at a discount and enjoy great returns once they recover
finally let's talk about one opportunity that will present itself during times of
higher inflation that if i'm going to be honest may or may not sit well with you
you see as i mentioned earlier interest rates and mortgages will rise as
inflation increases and as you probably know the recent basement low interest
rates were a major reason people could afford to get into the housing market in
the first place well with interest rates going up naturally some people are going
to be forced to sell their homes because they can no longer meet their mortgage
payments now that their interest rates have increased therefore as someone
who's been holding cash this presents a bittersweet opportunity to take
advantage of rising inflation even if it comes at the cost of someone having to
give up their home so as you can see during times of inflation many
opportunities for wealth preservation and creation will present themselves and
how you manage your assets and liabilities will dictate just how much
financial success you realize however as i mentioned your assets are only half
the inflation fighting battle so now let's discuss the other half which is
your income given that now you're acutely aware of how inflation works and
how punch you can be on your financial position i can almost guarantee that
you're going to be more aware of it from this point forward in fact one area of
your life where it will bother you the most will likely be in your working life
you see for most people the only way they can generate more income is through
the raises and promotions they receive at work up until this point you're
probably happy to collect your three percent raise every year because let's
face it you're not working that hard at your job anyways so to you a couple
thousand dollars in raises sounds great however how much of that race is really
left to enjoy when you factor in your new best friend inflation you get a
three percent raise which if you ask me would be considered a generous raise by
today's standards and inflation is two percent then you're really only getting
ahead by a measly one percent even if you're making a hundred thousand dollars
a year that's just a thousand dollars extra in your pockets and remember
that's before tax this is all to say that your new appreciation for inflation
is likely going to make you more aware of the limitations your current income
set up and hopefully will prompt you to take action this is why if you ask me
one of the best ways to profit from inflation is to use this as a motivator
to create new streams of income any income models where you have little
control over its growth or a recipe for disaster like the salary example i just
gave instead you should be creating new streams of income both active and
passive in nature i know for me this wake up call prompted me to build a
profitable freelance business and my two youtube channels which now make me over
a hundred thousand dollars a year what you teach other people how to do in my
course six figure tuber so the main point is this if you don't want to be
stuck in the same financial right year after year after year then you must work
on creating new streams of income if i'm being honest you can manage your assets
and liabilities as best you can but nothing is going to allow you to fight
inflation better than simply making more money therefore if you see inflation as
a real concern which you should then focus most of your attention on creating
new streams of income and when you have them up and running i promise inflation
will be much less of a concern hey it looks like youtube thinks this next
video is the one that will change your financial life forever give it a watch
and let's see if they're right