Yes, inflation is high, but if you invest, cut costs, and avoid highly inflated items, you're ahead of many.
Image Credit: Pexel
Source: Marketwatch
When inflation is high, grocery and gas prices rise. So keep a monthly budget and spending plan. Taking a break from enjoyable but non-essential spending can lead to unexpected savings.
Image Credit: Pexel
Source: Marketwatch
"Open a savings account with three to six months of expenses in cash," says Carrigg. "It's much better to earn some interest than none at all," says Bessette, so consumers should look for high-yield online savings accounts.
Image Credit: Pixabay
Source: Marketwatch
If you keep more cash than you need for an emergency fund, invest it. The stock market is low right now, but over a long time frame, that investment can earn a much higher interest rate in the stock market than in a savings account.
Image Credit: iStockphoto
Source: Marketwatch
Warren Buffett favours low-capital-need businesses, especially during inflation. Buffett advised finding companies with "easy price increases." Buffett encourages investing in companies that can raise prices without losing revenue. This creates profit.
Image Credit: iStockphoto
Source: Marketwatch
Tax efficiency in your brokerage account will combat inflation, says Carrigg. Investments that lose less of their returns to taxes should go in taxable accounts, while those that lose more should go in tax-advantaged accounts. Tax-efficient investing minimises your tax burden, so you pay less on investment earnings.
Image Credit: iStockphoto
Source: Marketwatch
Snigdha Kumar, head of product operations for Digit, says investing in staples like food and energy is smart because companies can price items higher while riding the inflation wave.
Image Credit: iStockphoto
Source: Marketwatch
Grace Yung, a certified financial planner at Midtown Financial Group, says to consider tangible assets during inflation. In 2021, natural gas, oil, and broad commodity baskets led the commodity universe in year-to-date returns, according to Morningstar.
Image Credit: iStockphoto
Source: Marketwatch
TIPS are inflation-protected government bonds. The government explains that TIPS principal increases with inflation and decreases with deflation.
Source: Marketwatch
Image Credit: iStockphoto
Investing beats inflation: The S&P 500's annualised return is 10%, data shows. Certified financial planner and private wealth adviser Stephen Carrigg advises investing in your company's workplace retirement account and opening a brokerage account for mid- to long-term savings and compounding.
Image Credit: iStockphoto
Source: Marketwatch