Inflation is huge concern for markets right now. The most recent U.S. Consumer Price Index number rose more than it has in 13 years. Let’s get ready for a bumpy ride, and in this video I want to address some things to be aware of while navigating the months ahead.

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That’s my official account, and I will NEVER message you about investment schemes, so please be careful and block & report any scammers posing as me.

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***BOOKS I RECOMMEND 📚***

I Will Teach You to Be Rich (hilarious how-to book on personal finance for millennials)

The Little Book of Common Sense Investing (Jack Bogle’s classic advice on index funds)

InvestED (step-by-step, millennial-friendly advice on how to pick stocks like Warren Buffett)

Unshakeable (this book = courage. blast ALL the fears & misconceptions you have about investing)

Rich Dad Poor Dad (#1 selling personal finance book of all time… need I say more?)

Think and Grow Rich (the ultimate book on money mindset and wealth consciousness)

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***MY FAVORITE MONEY TOOLS 🖤***

YNAB (I literally can’t live without this budgeting app, so obsessed)

Wise (like Venmo but for international currencies – I use this app a LOT for my life in Mexico)

Ledger Nano S (crypto storage hardware wallet, because “Not Your Keys, Not Your Crypto”!):

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DISCLAIMERS & DISCLOSURES ❤

This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.

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LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

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Inflation In 2021: What You Need to Know

In recent months, the word “inflation” has been on the lips of economists, investors, and individuals alike. The global economy has faced unprecedented challenges as a result of the COVID-19 pandemic, and its impact on inflation is no exception. As we navigate through 2021, it is crucial to understand the potential consequences and implications of a rising inflation rate.

What is inflation?

Inflation refers to the overall increase in prices of goods and services over a specific period. It erodes the purchasing power of money, meaning that you can buy less with the same amount of currency. This decrease in purchasing power can have far-reaching effects on the economy and individuals’ financial well-being.

Why is inflation a concern in 2021?

In response to the pandemic’s economic fallout, governments around the world implemented unprecedented fiscal stimulus measures. These measures involved injecting trillions of dollars into the economy, aiming to boost consumer spending and support businesses. While these actions were necessary to prevent a complete economic collapse, there are concerns that they may fuel inflation in the long run.

Supply chain disruptions and rising production costs have further complicated the inflation picture. The lockdowns and restrictions imposed to curb the spread of the virus disrupted global supply chains, leading to shortages of various goods and raw materials. As demand rebounds with easing restrictions, the shortage of supply is driving up prices, thereby contributing to inflationary pressures.

In addition, rising energy prices and increasing wages can also contribute to inflation. As oil prices recover from pandemic-induced lows and the labor market tightens, businesses may face higher input costs, which they will pass onto consumers in the form of price hikes.

The role of central banks and policy response

Central banks, such as the Federal Reserve in the United States, play a vital role in managing inflation. They adjust interest rates and implement monetary policies to control inflation within a desired range. In response to the pandemic, central banks have kept interest rates at historic lows and adopted accommodative policies to stimulate economic growth.

However, there is concern that these measures, combined with the massive stimulus packages, may stoke inflation beyond the desired level. Central banks face a delicate balance between fostering economic recovery and ensuring price stability. They must carefully monitor inflation trends and be prepared to adjust their policies accordingly.

How does inflation affect individuals?

Inflation affects individuals in various ways. As prices rise, people need to spend more to maintain their standard of living, reducing their purchasing power. This can be particularly challenging for individuals on fixed incomes or those who have not seen corresponding wage increases.

Investors also need to consider the impact of inflation on their portfolios. Inflation erodes the value of money held in cash and low-yield investments. To protect against inflation, individuals may need to invest in assets such as stocks, real estate, or commodities, which historically perform well during inflationary periods.

However, it is important to note that high inflation can have negative consequences for the overall economy. It can lead to a decrease in business investment and consumer spending as uncertainty rises, hindering economic growth.

What can individuals do to mitigate the impact of inflation?

While individuals have limited control over external factors, there are steps they can take to mitigate the impact of inflation on their finances. Here are a few key strategies:

1. Invest in assets that historically perform well during inflationary periods, such as stocks, real estate, or commodities.
2. Diversify investments to include assets that are less affected by inflation, such as bonds or foreign currencies.
3. Consider adjusting their budget to account for higher prices and prioritize essential expenses.
4. Take advantage of retirement plans and investment vehicles that offer inflation protection, such as inflation-indexed bonds.

In conclusion, inflation remains a significant concern in 2021 due to the unprecedented fiscal stimulus, supply chain disruptions, rising production costs, and energy price increases. Understanding its potential consequences and implementing appropriate strategies can help individuals navigate these uncertain times. Monitoring inflation trends, staying informed, and adjusting financial plans accordingly will be crucial to weather the potential storm of rising prices.