Inflation Medicine for Preserving Your Wealth
Inflation Medicine for Preserving Your Wealth
Contents
Inflation Medicine for Preserving Your Wealth
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How to Preserve the Value of Your Money
I need money, and you do too. We all need it. Survival depends on it, and once you get it, preserving your wealth is critical. Have you noticed how monthly expenses have climbed in the past few months? Unless your employer gave you a raise, your position got worse.
In 2022, you lost roughly 10% of your net worth. Now imagine what can happen over the course of the next few decades. Have a quick look at the history of inflation: $10,000 saved up in 1993 is worth roughly $4,761.65 today. That's a really serious decline in purchasing power.
If you want more data, I made this awesome video on this topic.
Will salaries match the climbing expenses? Maybe. But I prefer to be on the safe side, and the only thing that can help me sleep at night are assets - appreciable assets!
Preserving Your Wealth
Money is earned with your mind. And it's preserved with appreciable assets. They are the building blocks of financial security and stability. Not only do they keep up with inflation, but they also outpace it. Why? Because they’re scarce, generate income (usually) and provide some sort of utility. Remember the $1,000 example?
But investing is key to success in both building and preserving your wealth. According to U.S. Bank, preserving your wealth includes strategies such as having a financial plan, an emergency fund, investment diversification, and insurance.
Take a look at how investing can scale your money if it’s invested in stocks, bonds, or real estate. Nevertheless, finding good assets with strong potential for compounded growth and appreciation is not easy.
Conclusion: Conquering Assets
Not all assets will grow your money. Most businesses go under over the course of 10+ years. To ensure your investment pays off, it needs to have these four traits.
- Intrinsic value: Assets that have intrinsic value, such as precious metals, may be more likely to hold their value over time. This is because they have inherent worth based on their physical properties, rather than relying on external factors like market demand.
- Durability: Assets that are durable and have a long life expectancy tend to hold their value over time. For example, real estate is a durable asset that can provide steady rental income and appreciate in value over time.
- Low maintenance: Assets that require minimal maintenance or upkeep can be more attractive to investors, as they can provide a steady stream of income without requiring significant time or resources to manage.
- Utility: Assets that have a practical use or provide some form of benefit to their owner tend to hold their value over time. For example, infrastructure assets such as toll roads and pipelines can provide a steady stream of income to investors while serving an important societal need.
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Disclosure/Disclaimer
The information provided on this site is based on my own personal experience, research, and analysis, and it is not to be construed as professional advice. Please conduct your own research before making any investment decisions. I am not a professional financial advisor, stockbroker, or planner, nor am I a CPA or a CFP. The contents of this site and the resources provided are for informational and entertainment purposes only and do not constitute financial, accounting, or legal advice. The author is not liable for any losses or damages related to actions or failure to act related to the content on this website.