The key to profiting from upcoming inflation is to invest your money. If you aren’t familiar, investing is the process of buying assets that will either grow in value or produce income for you. By buying assets that are growing in value, you will protect your savings and escape the depreciating power of inflation.

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For example, if inflation is about 3% annually over the following years then you need to invest your money in assets that are growing at over 3% each year in order to outpace inflation.

FOR NEWBIE INVESTORS

If you’re a newbie investor then the following assets are all good starting places because they are very safe. Again, the main idea is to buy an asset that is growing in value faster than inflation is eating away at your purchasing power. If all goes well, you will buy an asset today for a certain price and sell it in the future for a much higher price.

With the following assets, you will have a low chance of losing money while still keeping yourself protected from inflation.

Here are three assets that will protect you from inflation:

TIPS, or Treasury Inflation-Protected Securities…These are assets offered by the government that are specifically designed to protect your savings from inflation. Since they are backed by the U.S. government, they are incredibly safe and offer you a return of about 1 to 1.5 perfect. You can buy these directly through the United States Treasury website. 

Precious metals…Precious metals like gold, silver, platinum, and palladium are all known for performing well during inflationary times. You can buy these metals by contacting a reputable supplier and buying coins, bars, or bullion. You can also add these precious metals to an Individual retirement account.

Stock market index funds…Index funds are assets that track a wide range of stocks, instead of just one. For example, you could buy an index fund that tracks the return of all the companies in the Dow Jones, the thirty largest companies in the United States. This is considered much more reliable than just buying one or two stocks.

FOR INTERMEDIATE INVESTORS

If you’re an intermediate investor then you are probably comfortable taking on a little more risk in exchange for a higher reward. The previous three assets are still good options but you can also consider buying stock in individual companies that are set to profit off inflation.

The companies that usually fair the best during inflationary times are companies that are consumer staples. As prices rise, people will naturally limit their discretionary spending on “for fun” expenses like travel and entertainment. However, they still need to purchase things like groceries and utilities.

A few of the industries where you can hunt for potentially successful companies are energy, food, healthcare, building materials, and technology. Companies in these industries have a good chance of outperforming the market average over the coming years.

Now let’s take a look at our number one strategy for profiting off of the coming inflation. Before getting to our finale, remember to hit subscribe so that you’ll be alerted of new videos to help you grow your net worth over the coming months. 

FOR SAVVY INVESTORS

Now, the number one strategy to profit off of inflation if you’re a savvy investor is to buy real estate. Real estate is one of the best “inflation-protected” assets that you can buy. This is because, if you own a building that you are renting to a tenant, you can simply increase the cost of rent to make up for the effects of inflation. 

If inflation goes up significantly over the span of five years then so does the rent for your tenants.

The best part about this is that the debt that you are paying on the building will stay the same even if you raise the rent. No matter how out-of-hand inflation gets, you can just keep raising the rent to make sure you are not losing money. As long as you are charging a fair rate for the market, you should have no trouble finding a tenant. 

Additionally, at the same time that your property is producing income for you, it is also growing in value. In a best-case scenario, you could earn income from a rental property every month and then sell it for a profit in a few years.

In conclusion, regardless of the investment that you pick it’s always important to keep a long-term view. You shouldn’t expect any asset to jump in price overnight and should be prepared at least six months before you start to see any gains for your investment. Usually, the longer you wait until you sell, the bigger your reward will be.

It’s also important to remember that no investments are guaranteed. With investing, there is almost always the risk of losing money involved. However, if you don’t invest your money, then you have a 100% chance of slowly losing your purchasing power over time due to inflation….(read more)

LEARN ABOUT: Investing During Inflation

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Inflation can be a nightmare for investors, as it erodes the value of their money over time. However, with the right strategies, it is possible to turn inflation to your advantage and generate profits even in challenging economic conditions.

Here are the strategies that helped me profit during inflation:

1. Invest in Real Assets

One of the most effective ways to protect yourself from inflation is to invest in real assets, such as gold, real estate, and commodities. These assets tend to hold their value during inflationary periods and can even increase in price as investors seek safe-haven assets.

For example, during the COVID-19 pandemic, the price of gold rose to all-time highs as investors sought a safe-haven asset to protect their wealth from economic uncertainties.

Investing in real estate is another way to protect yourself from inflation. Real estate tends to appreciate in value over the long term and provides a reliable source of passive income through rental payments.

2. Invest in Stocks with Pricing Power

Another effective strategy to protect against inflation is to invest in companies that have pricing power. These are companies that can increase their prices to keep up with inflation and maintain their profit margins.

Inflation tends to hit companies that have high fixed costs, such as utilities and transportation, particularly hard. On the other hand, companies that have low fixed costs, such as technology and consumer goods, are more resilient to inflation.

Investing in stocks with pricing power can be a smart way to profit during inflation, as these companies are better positioned to weather economic challenges and maintain growth.

3. Allocate to High Yielding Fixed Income Investments

Fixed income investments, such as bonds and preferred stocks, can be excellent vehicles for generating income during inflation. However, it’s essential to allocate to high yielding fixed income investments to offset the impact of inflation.

Inflation erodes the value of fixed income investments over time, making high yielding bonds and preferred stocks a better option for investors looking to generate income in an inflationary environment.

4. Diversify Your Portfolio

One of the most important strategies for investors during inflation is diversification. By spreading your investments across different asset classes, sectors, and geographies, you can limit your exposure to any one investment while increasing your chances of generating positive returns.

A diversified portfolio can help to cushion the impact of inflation and protect your wealth over the long term.

In conclusion, investing during inflation requires a different mindset than investing in a low inflationary environment. By investing in real assets, stocks with pricing power, high yielding fixed income investments, and diversifying your portfolio, you can protect your wealth and generate profits during inflationary periods.