Inflation is something that is affecting more families across the country. Numbers are going up and people are worried about the value of their cash going down.
The good news is that you don’t necessarily have to put up with inflation. There are many things that you can invest in that are likely to go up in value over time, relative to cash.
In this post, we take a look at some of the ways you can protect your hard-earned cash and prevent inflation from eating away at your wealth.
Where do you keep your money? If it’s in property, then you’re in luck. Usually, when there is inflation, property prices rise in line with it.
But why? It all comes down to access to cheap credit. When governments and banks increase the amount of money in circulation, they create more credit.
The addition of more credit to the money supply reduces the interest rate. This makes larger loans more affordable to first-time buyers, pushing up the total cost of real estate over the long-term.
Due to current inflation risks, luxury watch brands are seeing a spike in demand. Families want to buy objects that allow them to maintain their wealth, even when the value of cash is going down.
Buying luxury watches is an art. Sometimes, you can find specific models that will go up in value tremendously over the years. These tend to become collectibles in the future, dramatically pushing up their value.
Another place you can put your money during inflation is artwork. However, you need to be careful about the type of inflation. When inflation is debt-driven – that is, banks have created a lot of money – it can lead to deflation. When people don’t pay back loans, money evaporates from the economy.
If, however, it is being driven by money printing, then art usually rises in value. That’s because there are more dollars in circulation chasing the same quantity of famous pieces of art.
Again, if you buy art, you’ll want to consult with an expert dealer. They should be able to provide you with information on the purchase landscape and how prices are likely to evolve going forward.
Commodities have spiked in price in recent months, and the situation is probably only going to get worse. Families, therefore, should look for opportunities to invest in bullion – one of the best protections against inflation.
You don’t have to store gold and silver at your home. Instead, you can get a vault to store it for you, reducing the personal risk you face. You can also get insurance so that if there is a loss, you’re covered.
If you’re prepared, inflation isn’t something your family necessarily needs to worry about. Yes, it could be a problem in the future for retirement, but if you keep your assets in the right form, you can ride out the storm.
How bad inflation will get depends on the degree of supply shortages. In the coming months, prices for just about everything could spike tremendously, before settling back down again as market forces operate.