Inflation Insulation

Is inflation coming? I think the better question is can you increase the money supply as much as we have and as fast as we have and not have inflation. Recently an article was published by investopedia and the author suggested three ways to protect yourself against inflation. They were: 1. Invest in stocks 2. Invest in real estate (he was referring specifically to a primary residence) 3. Invest in yourself Inflation, on a personal level, is ok, as long as your assets and income are increasing faster than your liabilities. I call this fixing vs. floating... If you've ever gone clamming or hunting for muscles in the mud flats at low tide, you know that you want to be careful not to be alone and get stuck in the mud when the tide starts coming in. Let's make believe that two guys had to stay out there overnight. One guy was standing in a little rowboat on the mud and right next to him was another guy, without a boat, stuck in mud up to his shins. These guys have a good time carrying on conversation and laughing for several hours, until the tide starting coming back in. The water didn't bother the first guy in the boat, he just simply kept rising along with it. The other guy, however, well, it was bad news for him! This is a picture story of inflation. The key is to pile your assets and income in the boat so they rise with the tide, and let you liabilities get stuck in the mud. This is why seniors get hurt so much during inflationary periods, there income is fixed in the mud and their liabilities (cost of living) is floating up on the boat. Float your assets and fix your liabilities. One asset that floats well is real estate. An asset that does not float well is savings. I particularly like that the author of the article I mentioned said that investing in yourself in an important inflation hedge. This is true because if you don't gain more understanding, you'll be prone to believe that savings is an investment strategy and be like the 2nd guy that was having a good time until the water quietly reached his nose. The site uses cookies. They allow us to recognize you and get information about your user experience.By continuing to browse the site, I agree to the use of cookies by the site owner in accordance with Cookie policy