INFLATION | How to beat inflation explained in 8 Minutes | Fixed depositors are doomed…

by | Mar 26, 2023 | Invest During Inflation | 20 comments




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LEARN ABOUT: Investing During Inflation

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Inflation is a topic that often gets talked about, but might not be fully understood by many. Simply put, inflation is the increase in prices of goods and services over time. This means that the purchasing power of your money decreases as prices go up. If you have $100 today, inflation might mean that it is worth only $95 a year from now.

But don’t worry, there are ways to beat inflation – and it can be done in just eight minutes. Here’s how:

1. Invest in stocks

Stocks are considered one of the best ways to beat inflation. Historically, the stock market has returned an average annual rate of 10%. This means that investments in the stock market have outperformed inflation by a significant margin.

This doesn’t mean that you should invest all your money in stocks, however. The stock market can be volatile, and it’s important to diversify your investments.

2. Invest in real estate

Real estate is another asset that has historically outperformed inflation. When you invest in real estate, you’re investing in a physical asset that can appreciate over time. This means that as the value of the property goes up, so does the value of your investment.

3. Invest in commodities

Commodities are physical goods such as gold, oil, and wheat. These assets can be used to protect against inflation because they are tangible goods that can retain their value over time.

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4. Invest in bonds

Bonds are debt securities that are issued by companies and governments. When you invest in a bond, you are essentially lending money to the issuer in exchange for interest payments. Bonds can offer a fixed rate of return, which can help protect against inflation.

5. Consider inflation-indexed bonds

Inflation-indexed bonds are bonds that are designed to protect against inflation. These bonds adjust their interest payments based on changes in the inflation rate. This means that as inflation goes up, so do the interest payments on the bond.

6. Look for high-yield savings accounts

If you’re not comfortable with investing in stocks or other assets, you can still protect against inflation by opening a high-yield savings account. These accounts typically offer higher interest rates than traditional savings accounts, which can help offset the impact of inflation.

7. Invest in yourself

One of the best ways to beat inflation is to invest in yourself. This means investing in your education and your career. By improving your skills and knowledge, you can increase your earning potential and protect against inflation.

8. Avoid fixed deposits

Finally, if you’re a fixed depositor, it’s time to consider other options. Fixed deposits can offer a fixed rate of return, but they often do not keep up with inflation. This means that over time, the real value of your investment will decrease.

In conclusion, inflation can be a scary topic – but it doesn’t have to be. By understanding the different ways to beat inflation, you can protect your money and your financial well-being. Whether you choose to invest in stocks, real estate, commodities, or other assets, it’s important to diversify your portfolio and invest in yourself. Fixed deposits are not a good investment option in the current economic climate.

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20 Comments

  1. William Lai

    There are people who are really risk-adverse. To them, FDs (esp with recent high interet rates) are a boom now, especially after over a decade of low-interest-rates. Sure, inflation will eat into their savings, but losing 10% of purchasing power is better than losing 50% if and when market tanks…

  2. Patricia Carlos

    As a foreigner who lived through the entire duration of zero covid for the past 3 years in China, this is by far the most objective commentary I’ve seen on YouTube to date. Economists and business leaders are voicing concerns at the start of 2023 that the year could be a difficult one. JPMorgan Chase & Co. Chief Executive Jamie Dimon said Tuesday that the Federal Reserve may need to raise interest rates to 6% to fight inflation, higher than the peak level between 5% and 5.5% in 2023 that most Fed officials penciled in after their December meeting. Although I read an article of people that grossed profits up to $500k during this crash, what are the best stocks to buy now or put on a watchlist

  3. Bill Tay

    Just asking if you would buy DBS shares at today's price

  4. Dejon

    everything praising dbs lol what about ocbc?

  5. Willson Toh

    lol i agree. Inflation Inflation, 2023 and 2024 Year is GST GST. Everything is price increment i already having hard time to finding cheap food unless is cook my self no more money

  6. Cory Cat

    i own dbs shares but hindsight is a bitch. If is that simple i would sold everything and put into dbs.

  7. Phonedumb

    Pros & cons of holding all assets. As you mentioned, it can go up or down. Depending on personal circumstances, it is more prudent to be divested to hold both. Especially if one relies solely on dividends or coupons for a living (retirees). Cashflow is of utmost importance. Economies will always fluctuate too. Can one survive if dividends are cut and when one is solely invested in equities? If the investment holdings is huge enough… why not. But for majority of commoners, it is not the case. So one has to weigh between confirmed coupons vs fluctuating dividends in the overall planning.

  8. Chin Clarence

    Hi Josh, I recall u mentioned about retirement expenses and e.g of having lesser Roti Prata as one ages. That was less than 2yrs ago. Will u consider under estimate the aggressive inflation in retrospective and moving forward 30-45yrs, the ridiculous $x assumption for retirement seems possible especially back in 80s Fishball noodle and chicken rice were 'dirt cheap', likewise in 2060s the current $5 cai peng may also consider dort cheap..

  9. Jason Lim

    follow Josh's channels much much better than paying fake guru's courses.
    last time fake gurus sell "value investing" then when value stocks underperform, they switch to "growth investing", then "tech stocks", then how to make youtube, then options and more recently, NFT.
    just a bunch of course sellers.

  10. Dennis Gay

    It's overly simple comparison. time frame should be considered. As you have mentioned it's impossible to predict stock movements in the short term but FD is highly predictable. How do you qualify the value of predictability over 1 year?

  11. whis

    Also to add, if one wanna earn in the stock market, do not follow the crowd as when the FOMO kicks in, that is too late already. The most important thing in stock market is to hold long and with a stomach to weather the paper losses or even real losses. Only in a market downturn then we will separate the man from the boys.

  12. Yew Kai Siang

    I agree with you. I bought DBS at $19 a few years back. Now it is worth $35. Investment is a journey, it takes times to see the growth.

  13. HBu

    Josh 🙂 no need to "rebutt" other gurus. You are a long investor but others are options specialists or day traders. Different strategies apply. I dun think other gurus are seeking to attack you either. From their instagrams, they spent quite a bit of time abroad.

  14. Zane Tan

    Love that rap !

  15. Loh FK

    Josh thanks for highlighting the capital depreciation in fixed deposits against inflation

  16. Daniel Lim

    Thank you for sharing as always

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