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8 Ways To Outsmart Inflation – PART 3

Written By Millen Livis

8 ways to outsmart inflation

Inflation is a TAX!

Your Government is spending YOUR money without any consideration for your future and your children’s future.

And YOU have to pay for it.

You have to work more to just maintain the same standard of living you had a couple of years ago because your money is losing purchasing power.

That’s why it’s important to ensure that you “outsmart the inflation”.


This is the last PART 3 article of the 3-part series “8 Steps to Outsmart Inflation”

You read Part 1 and Part 2 of this series HERE and HERE.

6. Earn Money on Your Savings

Most saving methods can’t outpace the rate of inflation, but putting your money somewhere where it will earn higher interest will help reduce the destroying effects of inflation.

A. For your long-term savings optionTreasury I bonds are a smart choice because they’re safe, government-backed bonds designed to match or beat the rate of inflation.

When I invested in I bonds this last summer, the investors were rewarded with 9.62 % on their investments (I believe the inflation rate at that time was over 8%).

That’s a strong return for an investment that carries virtually no risk of losing your initial investment.

Check the Treasury Direct website to see the current rates.

You can purchase up to $10,000 per person a year in I bonds directly from treasurydirect.gov, and an additional $5,000 through your tax refund.

However, I bonds aren’t a good option for holding short-term savings because you have to leave your money deposited in the bond for at least five years to avoid paying a penalty.

B. For your savings that you want to keep liquid, such as your emergency fund, money for buying a property or some other significant investment in the next 1-2 years, a high-yield savings bank account or preferred savings account with a brokerage company (like Merrill Lynch that currently pays 4.25% interest on your money), can help you earn more interest than a traditional savings account (that still pays around 2% if you’re lucky).

7. Invest Strategically

There’re 4 aspects of investing strategically that I’ll address here:

1.   Invest in Stocks

Despite the lack of confidence most people express about stocks, owning some stocks of financially-sound companies that pay dividends can be a very good way to combat inflation.

Think of your household’s cash flow as a business cash flow.

If a company cannot successfully invest its money in projects that will deliver a return above its costs, then this company will struggle staying operation in a high-inflationary environment.

Since the basic premise of business success is that corporations will sell their goods and services at increasing prices, and therefore, have higher revenues and earnings, financially sound companies will have the stock prices increased as well.

Some of the best stocks to own during inflation would be in companies that can increase their prices naturally during inflationary periods.

A combination of supply chain problems and inflation, led to Food and Commodity resource companies rise.

So, products like meat, eggs, grains, dairy, oil, and metals enjoy pricing power during periods of inflation.

However, price increases aren’t enough to protect against inflation.

If a company is dealing with rising expenses, price increases alone are not enough to maintain equity appreciation.

That’s why grocery stores, which may benefit from an increase in food prices, may also suffer from an increase in their cost of operation (cost of goods sold).

So, look to invest in value stocks of the companies that are in commodity space  or food or healthcare space that are financially solid (meaning, have strong profit margins,  fairly low operating cost, and preferably, pay consistent dividends.

Don’t underestimate the value of dividends during inflation. Dividends increase the total return of your investment portfolio.

Finally, remember that holding a diversified portfolio of stocks can protect investors from the declining purchasing power of money.

2. Invest in a Real Estate

Real estate is another good investment to combat the inflation, since property prices increase with inflation.

If you buy a positive cash flow rental property or a home that you want to live in, so that you won’t worry about increased rent – these are productive assets.

However, you’ve got to be careful with flipping properties strategies so that you’d don’t end up with properties that you cannot sell.

You’ve got to be quite experienced as a real estate investors, to be able to find hidden values in properties AND be able to wait the value increase on these properties.

As a property buyer, whether it’s your home and an investment property, you’ll need to put some money down and take out a mortgage for the remainder of the purchase price.

There are different types of mortgages—fixed rate and variable rate.

Be careful with variable rate mortgage in inflationary environment because the rates may increase significantly.

While we have experienced real estate bubble in the past few years, and bubbles are usually followed by corrections, when properties lose value, on average, housing prices tend to increase over time, counteracting the effects of inflation.

3. Invest in Gold and Silver

Precious metals like gold and silver are usually considered a hedge against inflation because they preserve their purchasing power for long periods of time.

So while stocks and other assets may experience large fluctuations, the price of gold is usually more stable.

So, Gold is an asset of choice for investors who want to ensure that their money will continue to have the same buying power in the future, while minimizing the amount of risk they are exposed to.

You can buy bars or coins – doesn’t matter. Get the most of metals for your money. And make sure you buy from a reputable dealer – there’re some counterfeit products out there…

The bottom line, investing in gold and silver is a very good risk management strategy and hedge for preserving your moneys purchasing power during inflation.

4.    Invest in Yourself

Without a doubt, the best investment you can make to be prepared for an uncertain financial future is an investment in yourself.

YOU are your most valuable asset that provides the greatest ROI (Return on Investment) because investing in YOU will increase your future earning power.

This investment must be aligned with your personal and professional goals, so that you attain or upgrade skillsets that will help you make and keep more money, so that you’ll be able to achieve your goals.

These days we all need to have inflation-proof and recession-proof income sources.

8. Create accountability.

I have never met anyone who didn’t need some sort of accountability with their spending.

There are several easy ways to create accountability.

The challenging part is making yourself consistently pay attention to your money. Money likes attention!

You can use various budgeting tools (like youneedabudget.com or mint.com, etc.)

Also, many banks’ online platforms allow you to integrate credit cards from other institutions, and they will help categorize your spending.

I am not fan of providing all my financial info to the apps.

So, I use and provide my clients with a programmed spreadsheet – I call it a Money Tracker – to track your personal and business cash flow.

Whatever tool you choose, doesn’t matter. What’s important is that you track your cash flow, especially if you still live with constant money worries and know that you must be more intentional with your money and adjust your money habits.

Be strategic with your money. Think both – short and long-term.

Do NOT cancel your goals, get discouraged, or give up on your goals and dreams!! Instead, seek for solutions!  

To your Health, Wealth and Freedom!

Millen Livis, MS. MBA

P.S. If you want to be a successful strategic investor, I am currently interviewing people for my new inner circle investing mastermind – Women Gone Wealthy.

My intention for this mastermind is to get you ready for the market opportunities, so that you make your money work for you (it’s about time, isn’t it?😉)

It will be a small group of like-minded women, who will not only learn how to invest strategically but will also apply their knowledge in a supportive and friendly mentorship container.

Message me privately with the subject “WOMEN GONE WEALTHY” and we’ll schedule a call to see whether this mastermind is the best choice for you right now.


About the Author

Millen is a Wealth architect and Financial Independence Coach, entrepreneur, and a bestselling author. Being a Possibilities' Catalyst, she uses her intuition, business, and investment expertise to support entrepreneurial women (like you) who want to master their money, live their purpose achieve financial prosperity and freedom. With her physics and business education, corporate and entrepreneurial experience, money management know-how, mindfulness practices and transformational coaching skills, Millen has a unique ability to guide and support clients in achieving extraordinary success in their lives.

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