Let’s talk about inflation and what it means for your money.
Inflation occurs when the price of goods and services increases. You have probably noticed the increase in your supermarket bill. The change in your bill isn’t the result of you picking up more items, it’s because the prices of the items you are buying have increased.
So, let us pause and think about it for a moment…if prices increase then that means your expenses increase. An increase in expenses means your money can do fewer things.
Inflation also has an impact on your savings and your investments.
The impact on Savings is negative:
– Less money to save because you have to spend more on the cost of living
– The value of your savings reduces because you can no longer buy the same amount of goods with the same amount of money
– return on your saving account does not keep up with how prices are increasing. You are earning less than how much prices are going up.
Investing is the game-changer. Investing is the way to beat inflation because you are more likely to get a higher return than how the price of goods is going up.
Beating Inflation & Growing Your Money
Making great investments, which provide great returns, is the key to beating inflation.
Here are a few strategies that you can consider:
1. Buy stocks in companies that benefit from high-interest rates, such as financial institutions that are able to increase their lending rates
2. Invest in companies that can pass on the price increase to consumers
3. Invest in $US – Hard currency such as the $US usually maintain their value.
If you are serious about building wealth then you need to learn how to beat inflation.
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