Have you noticed? The price of food, gasoline and many other things we use daily are going UP. This is a sign of inflation.
The purchasing power of the dollar is decreasing. If you have a twenty-dollar bill, could you buy more or less with those twenty dollars in 2000 compared to today?
Here’s another question: If you have $20.00 today, do you think you’ll be able to buy more or less with that $20.00 in the year 2030?
These are just two examples of the purchasing power decreasing. Unfortunately, there’s not much we can do about things getting more expensive. Thankfully, there are 2 ways we can protect ourselves from the effects of inflation:
Step #1. Stock up on supplies.
There are 2 important reasons to buy and store items you need and use on a daily bassis:
- Supply shortages
- Increasing prices
Both of these are valid reasons to buy extra. Thanks to supply chain issues, many items you currently use may be out of stock, or they are in stock, but are becoming more expensive.
Top items to store include the following:
- Food (rice, canned goods, can openers)
- Energy sources (gas and/or solar power generators, candles, propane, etc.)
- Household products (bleach, soap, etc.)
- Personal care products (deodorant, feminine hygiene products, baby wipes, etc.)
- Medicine (otc, prescription, antibiotics, first aid kits)
Having these products on hand can help sustain you if there are supply shortages and during power outages. Aim for at least 4 weeks of food and water on hand during times of crisis.
Step #2. Provide a good or service.
When you provide a good or service, you can set your own prices. As inflation rises, you can raise your prices as well. this helps you keep pace with it and maintain your standard of living.
A key component of providing a good or service is to create multiple streams of income. The average person has one job, which generates one for of income. The average millionaire has at least 7 sources of income, with many of them being passive. Popular forms of passive income and multiple streams of income include the following:
- Monetized websites or social media channels
- Vending machines
- Rental property
- Dividend paying stocks/mutual funds
- Royalties (book sales, music, patents)
The more sources of income you generate, the better your odds of withstanding inflation and rough economic times.
Step #3. Buy gold and silver.
Gold and silver have been used as money for thousands of years. They are also a hedge against inflation. In other words, as inflation increases (or the purchasing power of the dollar decreases), gold and silver tend to increase in price. In other words, you might be able to SELL your precious metals at a higher price.
While this isn’t making mainstream news, it’s important to know central banks around the world are buying gold by the ton:
In March, Hungary’s central bank tripled its gold reserves to a historic high of 94.5 tonnes. This comes after the country’s 10-fold increase in gold holdings in Q4 of 2018.Read the article HERE
Gold isn’t discussed in mainstream media, but ask yourself: if gold is useless, why are central banks around the world accumulating gold by the ton?
Bonus Tip: Cryptocurrencies
In addition to precious metals, many are buying cryptocurrencies. These assets are held outside of the current monetary system also, with many believing they will be hedges against inflation as well.
Some of the biggest cryptocurrencies in 2021 include the following:
- Bitcoin (BTC)
- Ethereum (ETH)
- Binance Coin (BNB)
- Tether (USDT)
- Solana (SOL)
- XRP (XRP)
- Cardano (ADA)
- USD Coin (USDC)
- Terra (LUNA)
- Avalanche (AVAX)
Watch this video where I discuss how doing these things can protect us from inflation.
When dealing with hurricanes, we start preparing days or weeks in advance. We don’t sit there and complain on social media or watch helplessly as it approaches. We begin to prepare. We board up our windows. We stock up on food. It’s the same rationale with the economic storm headed our way.
Want more? Check out my book Invest For Success: Millionaire Wealth Strategies Not Taught in School. Available on Amazon.
Get more tips in my online course: Tired of the 9-5? How To Retire Early With Passive Income