Been to the grocery store lately? Prices are going up. Inflation is slowly creeping in, and prices could continue going up for the foreseeable future. Inflation is defined as the decline of purchasing power of a given currency over time.
Inflation can be best shown visually:
Many goods and services we use on a daily basis have been hit by inflation.
As we can see, we just can’t buy as much as we used to. So, what do we do? The most obvious answer is to make more money, but there’s a little more to it than that. How you make the money is the key.
Become a Producer
The most obvious way to diminish the effects of inflation is to make more money, but thanks to covid, many businesses have been forced to close. England has even announced a 3rd lockdown. Getting a raise isn’t always possible, and a stimulus check may help, but that’s just a temporary fix. The best way to overcome inflation is to become a producer.
The average person is a consumer. They may have a job, but they work for someone else. This means they just consume. They are totally reliant on their paycheck to survive. A producer on the other hand, is someone who creates and supplies goods or services. This gives them much more leverage, and a way to deal with inflation.
When you are a producer, you can keep up by raising the prices on goods and services by raising the prices on your items as well. This way, as the rate of inflation increases, your standard of living can keep pace.
What Can You Produce?
The average person may think they can’t produce anything or provide a service. They may think they have to quit their job and start a business full-time, but that’s not true. All it takes is a little time and creativity.
Here are a few ways to become a producer:
Sell products online. Everyone shops online these days, and it is sure to continue.
- Drop shipping. Drop shipping is a great way to become a producer. Set up an online store and sell a variety of goods and products. Click here for more info on drop shipping.
- Write a book. Sell books online.
- Create a virtual workshop or online course.
- Sell products on Ebay.
Lease vending machines. The items sold in vending machines can be sold at increasingly higher prices.
Dividend paying stocks. Stocks that pay dividends are a great way to keep up with inflation. The premise is simple: as companies sell more goods and services, their dividend will increase. Here is more info on dividend reinvestment plans (DRIPS).
Invest in precious metals. Gold and silver are in the discussion because they have been used as a hedge against inflation for years. As the value of the dollar decreases, gold and silver tend to maintain their value.
Here’s a bonus tip: as a producer, you can control how you receive payment for your goods or services. This means you can get paid in U.S. dollars, euro, or the yen. One day, you may be able to receive payment in cryptocurrencies such as bitcoin. This is just another benefit of being a producer.
The Power of Passive Income
In addition to the ideas listed above, consider investing in assets that provide passive income. In its simplest terms, passive income is money you make while sleeping. Instead of working for money, let money work for you. Here’s a video I made where I briefly discuss passive income and the coronavirus.
Inflation is something we all must deal with. There are many ways to deal with the rising costs of goods and services, but one of the best ways is to become a producer yourself. By being proactive and with planning, you can overcome the effects of inflation.
Many of the best life lessons are not taught in school. It’s critical you don’t rest on your laurels and continue learning. Get more great tips in my book Invest For Success: Winning Wealth Strategies Not Taught in School. Available on Amazon.