Stressed about Inflation? 5 ways to gain financial security during crazy times
You’re feeling the pinch. Everything costs much more than before. Groceries, rent, utilities, travel, dining out, and getting gas for your car – you name it.
We are definitely spending more dollars for everything and it’s getting harder to stay financially afloat.
For many of us, this is the first time in our lives that we’ve seen sky rocketing prices for pretty much everything.
But as a kid of the ‘70s and ‘80s, I remember my parents talking about inflation and double-digit interest rates. We also faced an ugly economic recession in 2007-08. But current inflation numbers are climbing to levels we’ve never seen in recent history. The official inflation rate is running at 8.1% in Canada – meaning we are most certainly dealing with unofficial numbers that are into double-digits. Wow.
What exactly is inflation? The root word of inflation is “inflate” or to expand.
Since the pandemic, we’ve seen governments expand the money supply like crazy. They’ve been printing money at unprecedented rates like there’s no tomorrow. Over the past two years alone, the US Federal Reserve printed over 80% of the US dollar supply. So many countries including Canada have done the exact same thing.
With record numbers of businesses forced to close over the past couple of years and people receiving stimulus cheques for staying at home, people have had some “extra cash” to spend. This is a broad generalization, but the point being that governments have printed money as a way to keep their economies functioning over these past couple of years.
The problem is, there are fewer goods in the market place now because of business closures and supply chain delays, thanks to the pandemic measures that sabotaged the work force across all sectors. When there’s an abundance of printed money in circulation chasing fewer goods, prices for everything is forced up, a.k.a. the universal law of supply and demand.
Some experts are saying we’ve actually entered a period of stagflation where there is stagnant economic growth. Unemployment remains high and the inflation rate is also high. And we’re dealing with collapsing global supply chains. A few pundits are predicting that an outright collapse of the US dollar and Western economies as we’ve known them is just months away. Sigh. Even I’m stressed now just writing this down.
It really sucks to have to pay more for everything with no end in sight.
If you’ve been stressed about high prices and inflation, here are 5 ways to gain financial security during these unprecedented economic times:
1. Cut your expenses. Take a long hard look at your daily expenses and see what you can do without. Identify “needs” vs. “wants” – you need healthy food and a roof over your head but do you really need to make a trip to Starbucks every day? Do you absolutely need that gym membership or can you go for a run outdoors instead? Do you need to pay someone to clean your house every week or can you do that yourself? You’ll be amazed to find money in unexpected places once you examine your finances carefully and make some simple living choices. Try living like our parents did way back then.
2. Buy your necessities in bulk. As prices continue to climb and supplies begin to shrink, consider buying basic grocery staples and anything you use on a daily basis in bulk. What you pay for them today will be much cheaper that what they’ll be going for in a few months when things become even scarcer. Remember the great toilet paper shortage?
3. Invest in real, physical assets that hold value over time. Real estate is a great choice if owned outright with no debt, or as an income-producing property. Fine art is another option to hedge your inflation risk. According to the 2022 Global Art Market Report, the global art market reached $65.1 billion in aggregate sales in 2021, up from 29% in 2020. Contrary to the widespread belief, you really don’t need a lot of money to get into the fine art market but do be wise about your investment. Opt for real art – buy it directly from a reputable dealer, an auction house or an art fair. Digital art in the form of NFTs are nonphysical, digital forms of art available on various blockchain platforms. While the digital art market has also recently exploded, ask yourself how comfortable you are with owning digital vs. real pieces of art.
4. Reduce/eliminate debt as much as possible. Pay off your mortgage, your car loan and all credit card debt. If you don’t have cash sitting around to do this (and most of us don’t), consider pulling money out of your retirement accounts, mutual funds, stocks and bonds. Look at the implications of doing this – how are your traditional investments performing right now anyway? Is there a tax hit – if so, how much? If the current market volatility has you losing sleep, cash out of your investments and reduce your debt. Your financial advisor will tell you to ride out the markets with better-positioned assets for the long-term. You could do both – take a portion to pay down your debt and re-position your traditional investments. The truth is, every day is new unchartered territory even for the best of financial advisors. No one has a crystal ball as to how the global economy will look like in a few months. Read up on the markets and always trust your gut.
5. Buy some gold and silver. For centuries around the world, precious metals have been regarded as sound money and financial security irrespective of market conditions. Gold and silver are luxurious, shiny wealth that have stood the test of time. Derived directly from Mother Earth, they are an excellent choice to hold in your portfolio for financial security, to feel financially grounded in the global economic upheaval surrounding us. Precious metals experts are advising people to hold anywhere from 10% -20% of your total assets in gold and silver as an effective long-term hedge against inflation.
So there you have it. Five practical ways to gain financial security in these inflationary, crazy times.
I’m not a financial expert by any means. But I do have advanced degrees in economics, business and public policy. I enjoy studying history and following global affairs with a passion. I’m a contrarian macro-thinker. These practical suggestions are just that – suggestions to spark you to really take stock of your finances, especially if you’ve been stressed lately about the high cost of everything.
As a functional medicine certified health coach, I help people find their optimal mind-body health so they are able to thrive especially in uncertain times. Financial grounding is a key part of the whole-health equation. If you’re chronically stressed about your finances, it will literally make you sick. Stress always shows up in our mind/body in the form of some type of symptom or illness.
Financial grounding means trusting your gut instinct when it comes to making financial decisions.
Listen to the tiny whispers inside you and you’ll know how to preserve your hard-earned money at this crucial time in history. Act now. Anchor and grow your money with sound strategies that make sense to you so you’re able to withstand the inflationary storm. Or maybe it’s the mother of all hurricanes coming with the Great Reset. Once you’re anchored financially, keep faith in the powers above and become unshakeable - you’ll know this too shall pass.
Have you heard the news? My second book will be released soon! Get Financially Grounded with Gold and Silver: Preserve Assets, Build Wealth, Escape the Matrix and Build Financial Freedom!
If you want to explore more ways to financially ground yourself, book a free discovery call by contacting me here.
Have a beautiful week!