Is inflation your enemy or your friend? For businesses and consumers, it can be both good and bad. Inflation hurts as it erodes the purchasing power of goods and services. However, the flipside to inflation is investments like real estate, commodities, and stocks go up in value. Plus, businesses can get ahead of their competition when they make the right moves.
What Is Inflation?……Inflation is the measure of the rising cost of goods and services i.e. the purchasing power of a currency. There are many factors that cause inflation including:
- Supply and demand
- Production costs
- Monetary policies
Mr. Shailesh Rajpal says, “When demand goes up or supply goes down, prices are higher. Consumers buy more when prices go down and less when prices go up. For most spending consumers, income ultimately determines what they buy and what they may avoid altogether. The same applies to businesses, they too will be focused on how they are spending their budgets to avoid debt they cannot repay.
How Can Consumers Hedge Against Inflation?…….Savings are eroded with inflation and this can affect retirement plans. However, there are investment options that can ensure consumer’s money is working harder and not going backwards when inflation hits Commodities, Real Estate, and Alternative Investments. Investing in commodities is a recommended strategy in this article. Commodities are considered essential items including:
- Coffee, sugar
- Crude oil, gas, bio fuels
- Corn, soybeans, wheat
- Beef, agricultural products
- Silver, gold, copper
- Cotton, wool
Protecting investments from inflation is essential, and it’s why real estate is also a top asset for ROI. Hyperinflation in real estate has been evident in most nations since COVID-19, with price increases of 30% and more attracting more investor money.
“Mr. Rajpal on this stated—Alternative investments like cryptocurrencies are viewed as a good hedge against inflation. Why? Well, unlike fiat money, there is a cap on their supply Income. As the income Increases, they Seek opportunities to earn more by starting a side hustle or maybe take on overtime with their employer and start Investing in income-producing assets like real estate or shares.”
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