Good News! Wages Are Going Up! Bad News: So is Inflation!

Wages are increasing! This is great news! Many companies have begun raising wages for their employees. Walmart recently announced they were raising pay for over 500,00 workers. McDonald’s announced pay raises as well, with pay ranging from $11-$17 an hour.

Some are also offering signing bonuses. Wendy’s, is offering employees $100. bonuses for signing on and for referring another staffer, while baby product company Evenflo and the Hard Rock Casino in Cincinnati are also offering signing bonuses of $1,500 and $4,000 respectively.

This is all great news for workers. Making more money is key to being able to pay bills and increase quality of life.

Unfortunately, there is one big problem: Prices and inflation are going up too.

The Bad News: Inflation and Rising Prices Are Here

The increase in wages is being wiped out by higher prices and inflation:

The monthly consumer price index, released Tuesday morning by the Bureau of Labor Statistics, showed a 0.6 percent increase in March, the largest one-month increase in nearly a decade. Over the past year, prices have increased by 2.6 percent overall.

Read the article HERE.

These rising prices are being caused by many different factors, but we will focus on two. Supply shortages and money printing.

Reason #1. Money Printing

Governments all over the world have been printing money to the tune of trillions of dollars. This excessive money printing decreases the purchasing power of the dollar, which means you must use more dollars (spend more) to buy the same amount of goods.

This picture illustrates the weakening of the dollar’s purchasing power:

The dollar’s purchasing power has steadily decreased over the years.

We can clearly see these price increase here as well:

See the source image
Basic items have gotten more expensive over the years.

As we can see, pay increases are great, but the cost of living is increasing as well. In other words, instead of getting ahead, many are just simply keeping up.

Reason #2. Supply Shortages

Supply shortages across various industries are affecting prices, and will continue to do so into 2022. Consider the following items that have experienced supply shortages in 2021:

  • Computer chips
  • Ketchup
  • Lumber
  • Steel
  • Chicken
  • Used cars/Rental cars
  • Truckers
  • Plastics
  • Lumber
  • Household products
  • Imported foods
  • Corn
  • Oxygen

In addition to these shortages, there are many others, with more expected to follow: China recently announced the partial shutdown of their 3rd largest shipping port:

China has shut down a key terminal at its Ningbo-Zhoushan port, the third busiest port in the world, after one worker was found to be infected by Covid — a move that will likely put further pressure on already stretched supply networks. Dawn Tiura, CEO of Sourcing Industry Group — an association for the sourcing and procurement industry, said China’s stance will lead to “severe” supply chain consequences.

Read the full story HERE.

This supply disruption will cause a shortage of key products, which will lead to increases in prices, wiping out any benefits the pay raises would create.

Green and Gray Evergreen Cargo Ship
Shipping delays will cause an increase in prices for the foreseeable future.

Call To Action

As prices rise, devising a strategy to persevere through these challenging times is essential. Here are the top ways to handle rising prices and inflation:

Tip #1. Start stocking up on essential items.

Each week, buy small amounts of the following:

  • Bottled water
  • Canned goods
  • Toilet paper/paper towels
  • Toiletries (soap, toothpaste, etc.)
  • Vitamins
  • First aid supplies (band aids, aspirin, etc.)
  • Other items you use regularly
Now is the time to stock up on items before prices get out of hand and supplies run low.

As shortages continue prices for remaining items will increase. Buying them before things get dire is critical.

Tip #2. Create multiple streams of income and passive income.

This is the key to dealing with inflation. the average person has one income stream, which comes from their job. That paycheck is supposed to pay all a person’s bills and living expenses. During times of rising prices and inflation this can be extremely difficult. This is where multiple streams of income come into play.

The average wealthy person has at least 7 streams of income, with many of them being passive income. This is money made where they aren’t actively working to receive it. Popular forms of passive income include the following:

  • Rental property
  • Vending machines
  • Laundromats/dry cleaners
  • Automated car washes
  • Book royalties
  • Internet businesses (drop shipping, online courses)
  • Monetized websites (blogs, YouTube, etc.)
  • Business ownership

Tip #3. Stock Up On Assets

As discussed in Tip #1, having ample supplies during periods of inflation is critical. While this is common knowledge, this isn’t the only thing we should buy during this time. Its also important to accumulate items that do one (or both) of the following during periods of inflation:

  1. Retain their value
  2. Increase in value

Yes, we need canned goods and toilet paper, but these items are quickly consumed and discarded. Most people will spend all their money on these items, but a sound investment strategy includes buying assets, such as gold and silver.

Both gold and silver are purchased by wealthy individuals to combat inflation. As the purchasing power of the dollar decreases, assets like precious metals tend to retain their value and may go up in value. Bother these items can then be sold to cover living expenses or purchase additional assets that may become too expensive for the average person.

Having assets is one of the best ways to not only survive during periods of inflation and economic uncertainty, but thrive as well. As the value of gold and silver rise, they can be converted to cash and used to buy other assets such as rental property, stock investments, and businesses like franchises.

Gold and silver aren’t discussed in school or social media, but they have been used as money for over 5,000 years. In addition, governments and central banks all over the world have been quietly accumulating gold by the TON for the past several years:

Ask yourself: why are countries storing so much gold? What is the reason to have tons of gold stored in their vaults?

“Hungary issued a press release that accompanied its March purchase which cited “new risks arising from the coronavirus pandemic” as playing a key role in its decision to buy. Bank of Zambia Governor Christopher Mvunga said that “during periods of market stress – when assets would be losing value – gold would be adding value, thereby shielding the whole portfolio from large losses.”’ 

Read the full article HERE.

Knowledge is Power

Companies may be raising prices, but they are also cutting costs in other ways. For example Walmart eliminated bonuses:

Walmart will end its quarterly bonuses for US store workers in January after it raises its hourly minimum wage from $11 to $12, eliminating a longstanding perk for workers. Walmart, the largest private employer in the United States, has for decades paid the bonuses to its approximately 1.2 million hourly store workers based on store performance. 

Read the article HERE.

Now is the time to devise a strategy. Inflation will only get worse as we enter 2022. What will you do? How will you prepare? Get more investment strategy tips in my book Invest For Success: Millionaire Wealth Strategies Not Discussed in School. Available on Amazon.

The earlier a person is exposed to business, the better. Download a free copy of my book Planting Seeds; The Children’s Guide to Entrepreneurship today.

Online classes are available as well. Register for my class now on Udemy: Tired of the 9 to 5? How to Retire Early With Passive Income.

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