Inflation: How To Make Money From It

Inflation: How To Make Money From It

November 14, 2019 16 By Ruchi Verma

Inflation is a quantitative measure of the cost of essential items, and central banks try to keep this as low as possible in order to encourage economic growth. Inflation can cause serious damage to the economy. As things cost more, people demand more wages to offset the increased cost of living, which, in turn, drives up prices even more, as companies need to raise their prices to pay the extra salary to their workers.

Investments for Inflation

While it might not be good news for the consumer, the investor can actually make a profit out of inflation, and City Gold Bullion is the place to buy gold in Brisbane. Gold has long been a favorite hedge against inflation, as it usually sees a healthy rise in value, as everything becomes more expensive. Other commodities can also bring in a nice return, although gold is the most popular of all commodities as an investment against inflation.

Real Estate

Property is another firm favourite for investors who are worried about inflation, and when you buy property, not only does its value appreciate over time, you can also rent the house out, which brings in a steady income. It makes little sense to buy a house and leave it empty, indeed, empty houses soon become derelict, which is another reason to seek tenants. If you want to learn more, there is also an informative article written by a well-known private investor, which lists his strategies for investing against inflation, which is well worth a read.

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If you have the capital to make a real estate investment, you could team up with a local property management company, who would take care of everything on your behalf. They can source and screen tenants, carry out essential repairs and even collect the rent for you, and even though you have an expense with the management company, you should still make a tidy profit.

Inflation-Indexed Bonds

Another good investment when inflation is high, inflation-indexed bonds keep pace with inflation, making them a more attractive proposition than regular stocks and bonds. These bonds are pegged to the Consumer Price Index (CPI), and when the CPI rises, your inflation-indexed bonds also increase in value.

Moving your Wealth Out of Currency

As soon as an economy suffers from rising inflation, many investors move their wealth out of fiat currencies like the US and Australian dollar and into assets like the ones mentioned above. There is usually a trend in gold prices, for example, when inflation creeps up, the demand for gold rises, which sends the price higher, and it is this factor that attracts investors.

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If you would like to diversify your investment portfolio, you should consider purchasing either gold coins or gold bullion, as this is a recognized strategy to hedge against inflation. Gold has a very long history of stability. If you search online, you can easily find a reputable gold bullion dealer who has offices nearby, where you can go and purchase gold and take possession of the asset.

Also read : Finance for senior citizens

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Disclaimer – This article is an informative piece. Before investing in any financial issue kindly check with a financial advisor.

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