4 Ways to Protect Yourself Against Inflation

Graph showing inflationUnless you went through an economics class, you may not have heard of inflation. In a nutshell, it’s when the prices of basic commodities rise, which means more money will be needed to purchase certain goods and services. While it’s normal, it has a huge effect on a person’s buying power — both as an investor and a consumer. To protect you from the worst of inflation, you may take note of these:

1. Invest in real estate

Real estate properties are known to be among the strongest hedges against inflation. The value of a house can increase with the accompanying rise in market prices, which will benefit you in the long run. If you’re renting your real estate property, it can even result in a higher additional income. Rcsothebysrealty.com reminds, however, to search only for real estate properties that you can afford.

2. Work hard for a promotion

One of the most effective ways to protect yourself from inflation is by improving your income and earning ability. This is why you should work hard, so you will be promoted and be given that raise. This will minimize the impact of inflation on your earnings.

3. Go for TIPS

One way to protect your investment portfolio is by choosing Treasury Inflation-Protected Securities (TIPS), as it increases with inflation and decreases with deflation. It’s measured by the Consumer Price Index, so once your TIPS matures, you can get the adjusted or the original principal.

4. Put some money in the stock market

If you know enough about the stock market, it would be a good idea to invest in it. It can return as much as 10% of the money you invested, which can be enough to protect you from inflation.

If you want to be able to maximize your investments and earnings, you need to take the necessary steps to protect yourself from inflation. This is so that your standard of living will not erode.