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Inflation is inevitable in the twenty-first century. To ensure you have a comfortable retirement, it’s vital to prepare for prices going up on goods such as food and gasoline. Investing in assets that are inflation-proof will protect your savings. Here are some you should consider owning.
1. Gold and Other Precious Metals
Something is valuable in society when it’s scarce and can’t be reproduced easily. Gold falls into this category along with other precious metals including silver and platinum. These metals never lose their value as they age meaning they are the perfect medium of exchange.
David Geithner On Location Exp emphasizes that, unlike currency that governments can print at a whim, gold and other precious metals always retain their value making them an excellent asset to own as a hedge against inflation.
Cryptocurrency is supposed to be a good hedge against inflation as well, although most of your investment money should go for the more tried and true assets. Cryptocurrency is a relatively new phenomenon, and its ability to survive financial storms remains to be seen.
3. Real Estate
One asset that has survived inflation and likely will in the future is real estate. Buying a residence as an investment is a smart way to protect yourself. You can buy a home that’s ready to move into and then turn around and rent it out, also known as a turnkey investment. The rent you receive pays for your mortgage and the extra is income. Hire a property manager to vet potential tenants for you and collect the rent. A property manager will take a small percentage of the rent, usually ten percent as income, but that cost is well worth the peace of mind.
Better still, that rent should rise as the dollar loses value, meaning you’ll have an inflation-proof income for years to come.
Commodities, or the goods that we buy every day, are another excellent inflation-proof asset. As inflation increases, so does the price of commodities, so investing in them is a smart way to protect yourself from inflation. You can invest in exchange-traded funds (EFTs) that are based on stock market trades on commodities.
Keep in mind, however, that EFTs can be volatile and lose their value quickly. Educate yourself and know the risks involved before investing in EFTs.
5. Treasury Inflation-Protected Securities
Treasury inflation-protected securities (TIPS) are another form of asset that can protect you from inflation. They’re treasury bonds designed to protect investors from inflation. If you purchase these securities, you typically receive a payout twice a year.
These securities can also be volatile and lose their value if the stock market crashes. They can also underperform and won’t reflect true inflation.
The key to investing is balance and diversification. Never sink all of your money into one particular area, but spread your money about. Also, be sure to avoid debt and have an emergency fund for those unexpected expenses that arise. That way, you’ll be prepared when inflation comes knocking.