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The Ultimate Guide on How to Keep up with Inflation

The Ultimate Guide on How to Keep up with Inflation

May 03, 2023

Inflation is a silent thief that slowly eats away at our hard-earned money. Whether it's at a slower rate or a full-blown economic crisis, there's nothing more unsettling than the feeling of losing purchasing power. But fear not, because with the right steps and mindset, you can keep up with inflation and protect your financial future. In this guide, I’ll be sharing some helpful tips on how to keep up with inflation without compromising your lifestyle. So sit back, relax, and let's get started.

1) Invest in stocks

If history is an indicator, one of the most proven ways to keep up with inflation has been by investing in stocks. As prices rise, companies tend to increase their prices, which means that their stock prices will rise as well. We find that our clients who are well diversified in a stock portfolio that is built with their risk tolerance in mind tend to come out ahead financially during times of high inflation as opposed to those who tuck the money under a mattress. 

2) Keep Your Debt Under Control

Inflation can make it more challenging to pay off debt since the value of money decreases over time. That’s why it's crucial to keep your debt under control and avoid high-interest loans. If you have debt, focus on paying it off as soon as possible, starting with the highest-interest loans. By doing so, you'll save money on interest and protect your credit score.

3) Consider Investing in Real Estate

Real estate has proven to be an excellent investment for those looking to keep up with inflation. As housing prices rise, so does the value of your property, which means that your investment grows over time. Additionally, owning a rental property can provide a steady income stream that keeps up with inflation. However, investing in real estate can be complicated, so it's best to seek advice from a professional if you're new to the game.

4) Diversify Your Portfolio

Diversification is key to protecting your finances during inflation. By spreading your investments across different asset classes, you can minimize the risk of losing money. Invest in stocks, bonds, real estate, and other alternative investments to protect your money from inflation. Also, consider investing in international markets to diversify your portfolio further.

5) Stay Informed

Finally, staying informed is critical when it comes to keeping up with inflation. Keep an eye on the economy’s performance and how it affects your investments. Stay informed of monetary policies, interest rates, and inflation rates to make informed decisions.

6) Remember that not making money is losing purchasing power

If your money is not working for you through an investment strategy, you are losing purchasing power through inflation. 

Inflation can be scary, but you can protect your financial future by following a written and intentional strategy through financial planning. Remember to reach out as we are happy to help with this. With the right mindset and tools, we believe you can keep up with inflation and secure a brighter financial future.