Tips You Need to Know to Combat Inflation

Tips You Need to Know to Combat Inflation

We are well into 2017 and Trump has been in office as president of the United States of America for nearly the same time. Last year's historic US election with Trump and Clinton mostly caused volatility in the world market. This constant volatility is likely to cause inflation in the long-term.

This is because stocks are fairly doing well since Trump became president. Moreover, the years of stagnation of the US economy merits an increase in inflation.

In this case it is crucial that as an American and a market participant that you be ready for the repercussions of a possible inflation. While it’s still just a possibility, being ready never hurt anyone. Here are the things that we recommend you do in order to fend off the effects of inflation.

Research First Before Buying

What you have to prioritize is spending money wisely. Because there is an impending inflation, it is recommended to buy now. For example, you want to buy a car or a house or an appliance. If it’s something that you would have to finance, it’s best to carry out the purchase now in order to lock in prices before prices go up due to inflation.

Own Lots of Stocks

One of the best ways to fight the effects of inflation is by owning lots of stocks. This is according to historical data. By owning stocks, you have access to price adjustments which some companies conduct in order to keep up with inflation. This price adjustments are beneficial in combatting inflation.

Live Below Your Means

Whether the country is in inflation or not, it’s always smart to live below your means. However, it is more crucial during these times because of the fact that inflation has already caused prices to go up. The key is to plan ahead and keep your resources safe until it is okay to spend again. Don’t waste money on things that are priced higher than they’re supposed to be.

Delay Retirement

Retiring during inflation could be disadvantageous because you’ll miss out on as much as 8% of annual growth. Just delay retirement for a few years in order to increase your future income significantly. This would make your base payment begin at higher prices. Take advantage of the inflationary environment.

Secure Your Home

One of the best things to do during inflation is owning your home. By securing  your home and locking in fixed payments, you wouldn’t have to worry about the cost of payments becoming more expensive. In the long-run your house would increase in value while your payments remain the same.

Inflation is a phenomenon that is best endured through vigilance and smart financial management. Be ready and be strong.