Inflation – How You Should Deal With It As An Investor

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Welcome to the 114th edition of the Inkosi Wealth Scoop!

In today’s episode, I’m going to dive deep into the topic of inflation and give you a rundown on how it can be seen from many angles. 

I’m also going to discuss what inflation means for you as an investor and how you can protect yourself against it so you can continue to thrive despite the current economic status.

We cover:

  • What is the True Inflation Rate?
  • What are the Implications of This?
  • Keypoint #1: Don’t Freakout
  • Keypoint #2: Defence vs. Offence
  • Keypoint #3: Don’t Predict the Future
  • Keypoint #4: Cash Control is King
  • Keypoint #5: What Should You be Investing in?
  • Final Thoughts

If you’re an investor who wants to learn more about inflation so you can better understand how to take advantage of it, then this episode is for you!

Show Notes:

00:00:00 Intro

00:04:04 What is the True Inflation Rate?

00:05:50 What are the Implications of This?

00:08:59 Keypoint #1: Don’t Freakout

00:11:54 Keypoint #2: Defence vs. Offence

00:17:40 Keypoint #3: Don’t Predict the Future

00:20:40 Keypoint #4: Cash Control is King

00:23:43 Keypoint #5: What Should You be Investing in?

00:27:31 Final Thoughts/Outro

At a time when news consumers, journalists, governments, and investors all seem to be discussing inflation, I thought I’d share some of my thoughts on how to approach it, what it means for investors, and what you can do to protect yourself from the current inflationary environment while still maximising your investment returns.

Many factors drive inflation. Inflation results from:

  • rising production costs
  • rising consumer demand for goods and services, whichever comes first.

The last couple of years has created a little bit of a cocktail where both of those things have happened together.

We’ve had a lot of money flooding into the economy. As a result, people have had more disposable cash to play with and invest in.

On the flip side, most businesses and manufacturers have experienced a lot of stress from a supply chain and cost of materials perspective.

The bottom line is that if inflation is happening, then not only does it affect the higher cost of goods and machinery, but it also affects necessities such as food, petrol, and many other goods, which can have a massive negative impact on society.

I’ve seen iceberg lettuce selling for as much as $13.

There are various reasons why we might have supply chain issues on one particular item, but when inflation starts to permeate all of the goods and services that we need for basic living, that has a massive implication.

The fundamental issue with inflation is that when the cost of living increases, salaries and earnings typically do not keep pace. 

At the moment, there is debate about what level of salaries businesses can pay to reduce the pressure of inflation. 

The tension from a business owner’s perspective is that many businesses feel like they’re just getting up and running after having had two years of being kicked in the guts. 

It’s not that there’s no compassion for what the everyday person is experiencing. But, there’s tension between trying to keep the business afloat and profitable and needing to pay people more money.

With higher inflation, technically, people are making less money. Read More

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