How To Beat Inflation
With the government going crazy printing money, it’s only a matter when inflation comes. It could be like the Carter years…or worse. It all depends on how things go but we could be looking at 10-20% inflation before we know it.
Of course, if this happens is anyone’s guess. While I think it’s likely, I could very well be wrong, so this whole article could be an exercise in futility. But hey, let’s muse about this some and think about ways to beat the inflation beast:
1. Invest in precious metals: The ultimate hedge against inflation is investing in gold and silver. Of course, this assumes you have money to invest…which after this economic downturn is a stretch. But whatever dough you have, the government may be devaluing the dollar, but they can’t devalue gold and silver.
2. Get fixed interest rate loans…now! Right now, interest rates are at all-time lows. If you manage to get a 5% interest rate on a mortgage, and inflation is 15%, well, your house is probably going up 15% a year but your house payment stays the same. Nice investment! Likewise, if you are getting a car loan, get a fixed interest rate. Those car payments will stay the same, but inflation essentially eats away at how much you are really paying.
3. Avoid credit card debt. These are almost always variable interest rates. Fixed interest rates is what you want. There are some credit cards with fixed interest rates though.
4. If possible, work for a business that is flexible. A commodity producing business is good since those types of businesses’ revenues rise with inflation. An oil driller makes more money during inflation since the price of oil goes up. However, commodity using companies feel the pain of inflation. Service companies vary. If the company provides a service at a fixed-price that’s been locked into by contract, it is more screwed than a company that can modify its prices for inflation.