What Are The Best Investments For Inflation?

best investments for inflation

Without earning compounding interest, your money's value is wasting away each year. Your one dollar today will not be able to buy the same goods in the next few decades (or months at this point), and this is because of inflation. It’s inflation that is measuring the services in the economy and the measures of average price levels in a country. This is the increase in price at a given point in time. Because of inflation results, the currency that you’re holding today will buy less than before. With your buying power and savings at a loss, especially in a time of increasing inflation and wage stagnation (stagflation), you have to start planning to minimize it the best you can. 

Inflation is running rampant across the United States and many parts of the world right now due to many factors with prices skyrocketing. In fact, the U.S. and other countries just printed more money in the past 2 years than they have in the previous 200! The Fed continues to keep the printing press going for now. And with rapidly growing national debt adding up each year, things on the horizon don't look very promising. While inflation needs to be lowered down to a normal 2-3%, it's been hovering around 8% for awhile now in 2022! Even mortgage rates are now at record highs, although they won't last forever since the red hot housing market will eventually cool.

Inflated pricing a complicated issue with many moving parts. The record-breaking inflation is blamed by many on Joe Biden, Donald Trump, Powell, The Fed, Russia, or China. But the truth is that no one single person or country or industry or political policy is to blame after the Coronavirus pandemic fallout that has wreaked havoc on the economy.

Nowadays just going to the grocery store or buying building materials is costing a fortune at this point, if you can even get the products you are looking for at all in our new inflation nation. There is a noticeable shortage on all items, and prices are reflecting it. Empty shelves and panic buying are occurring even now, especially around the holidays. Even the almighty Dollar Tree will be raising prices on some items above $1 soon! Some products don't increase prices but instead just reduce size or quantity to cut costs.

This is why it’s essential to have a hedge against inflationary price increases. When prices go up, you need an investment like the one on this page that will go up in value, and your portfolio should be able to keep up with the costs as you age. In addition, the economy of a particular country can rapidly contribute to inflation. This can be in the form of a rise in wages or rapid processing of oil and other raw materials. 

It’s natural to have inflation in the market. However, who wants to lose money over time? It helps to lower your bills and save more money, but what you really need to do is invest in things that give you a return higher than the level of inflation. This is why many disciplined investors are going into other asset classes when they notice that the markets are going to turn into a climate of inflation. Some of the top assets that you may consider to fight inflation include the following: 

5 Top Investment Options To Fight Inflation

1. Gold 

gold investment hedge against inflation bullion bars

Gold bullions or coins are always considered a hedge when the prices are soaring. This is because gold has not lost its value over centuries, and it’s still considered by many as an alternative currency. Gold bars and specific coins are helpful when a native currency of a country is losing its value as the people’s trust in the government becomes lesser. This is a physical asset that one can hold in their hands, and the value tends to hold for the most part. 

2. Bond Portfolios 

Bond portfolios with 60/40 stock are a traditional mix of bonds and stocks, and they are considered the safest investments. They are conservative, and if you’re unsure about how to do the work on your own and are reluctant to pay for an advisor, you can consider the dimensional DFA Global Allocation instead. This can be a straightforward strategy, and like any other investment plan, it has its cons. 

If you compare them to equity portfolios, they won’t perform well over a significant period of time. There are also the effects of compounding interest to consider. It’s essential that the 60/40 is only a hedge that will keep the overall portfolio safe. However, you will likely be missing out on a few returns compared to the stocks with a high percentage. Some bonds have been booming in 2021 and 2022 but no investment is guaranteed in a volatile economy filled with inflation.

3. Real Estate Investment Trust 

reit etfs real estate investing hedge against inflation property purchases

The REITs are known to be real estate companies that operate and own some income-producing properties. These houses tend to rise with inflation, and you can invest in one that consists of a pool of other like-minded people. The pool will pay out the dividends to the investors. Of course, if you want more exposure to this but want a lower expense ratio, you can always consider Vanguard Real Estate ETFs. 

However, know that there are disadvantages when you put all your money into a real estate investment trust. They are very sensitive to the changes in high-yielding assets. As the interest rates are rising, some people find it attractive to invest in treasury securities, and the result is a lower share of prices because the funds were withdrawn away from the REITs. 

Another thing is that REITs need to pay property taxes, and this can be more than 20% of their total operational costs. Read more about REITs in this web address: https://corporatefinanceinstitute.com/resources/knowledge/finance/reit-real-estate-investment-trust/. If the council or municipal authorities suddenly pass a law that increases the taxes for the budget shortfalls, the shareholders may find themselves strapped for cash. 

There are certainly high yields in general, but the taxes are imposed on the dividends. Most of the rates fall at about 15%, and the dividends are currently taxed according to the higher percentage of REIT. They are considered a personal income that can raise the rates and potentially put you in a higher tax bracket. 

4. S&P 500 

Stocks are still the best choice when you want to invest for the long term. Businesses usually have gained from inflation, especially if they require little capital as a start-up. Those that are often dependent on natural resources are considered losers. 

Today, the S&P 500 has a high enough concentration when it comes to communication services and technology businesses. They can account for more than 35% of the stake in the Index. Overall, the communications and technological developments serve as capital-light for many companies, and they can emerge as winners afterwards. 

If you’re going to invest in the S&P 500, you need to look into the SPDR ETF for the S&P 500 that will be a watch list on your behalf. However, like any other investments out there, specific disadvantages may be present in the S&P 500 Index. One of the significant drawbacks includes giving a higher priority to many companies with a lot of market capitalization. The stock prices for the larger companies will influence the Index in no time. Also, there are no exposures with the small capital companies that historically provided the best returns. 

But when it comes to the very basics, you can get around a 9% growth per year investing in the stock market compared to a 3% loss to inflation each year. And all the compound interest from dividends really adds up.

5. Income From Real Estate 

real estate income beat inflation rental property

The income from real estate comes with rentals. The amount and cash flow you receive every month can beat inflation. When the inflation rises, expect that your home will also increase in value. This is because the landlord can charge a higher amount each month. The result is that there will be a higher rental income that keeps up with the inflation. This is one of the best reasons you should consider investing in real estate if you want diversification. 

However, know that there are cons to real estate investing. First, you have to cough up a considerable amount of money for the initial investment, and the transaction costs are higher than what you may have anticipated. 

The second thing is that houses and real estate are not liquid, so you can’t quickly sell them without substantial losses in their value. Purchasing a home will require maintenance and management, and you also have a great deal of financial liability if you don’t research this industry before getting into it. And don't forget about other costs like property taxes or condo HOA fees!

In addition to rental income real estate or flipping properties, you can also invest in land if you speculate that it will increase in value over time.

Ignore Inflation Increases 

Inflation can be tough on your personal finances, small business, and retirement planning. But utilizing the above investment options, potentially along with cryptocurrencies like Bitcoin or other precious metals like silver, will ensure that your investing goals aren't inhibited. With a smart strategy including the tips above, you can inhibit the inflation inflammation!

Mass Text vs Group MMS Differences

mass text vs group mms differences messaging

When we are talking about text messages, mass text and group messages can sound similar. However, they are different in the way they operate. You can easily send mass text messages from your computer to as many people as you would like, depending on the software you use. Group MMS is ideal for a small number of recipients and mass text is ideal for when you have a large amount of recipients. With group MMS, it’s like that operating systems may limit the number of recipients you are sending a message to. 

If you are a business trying to connect personally with your customers, mass text messages are the best way to have single conversations and interactions with your customers. If you have a wide customer base, it is likely that you will want to consider mass text messages over group MMS. 

However, before you decide, let's look into the key differences between mass text and group MMS.

What Is The Difference Between SMS And MMS?

MMS stands for Multimedia Messaging Service whereas SMS stands for Short Messaging Service. With SMS mass text messages, there can’t be more than 160 characters of text whereas MMS supports multimedia content. However, SMS deems to be more reliable as it is supported by pretty much every cell phone used today. It even works with non-smartphones. 

This makes delivery to a wide variety of cell phones more likely as opposed to MMS. Being able to send mass text messages as SMS messages to a high volume of people can streamline delivery and create a higher success rate with each customer. 

What Is The Difference Between Mass Text And Group Messaging?

As stated above, mass text messages work better for a large number of recipients. For group MMS, you can only send a text to a handful of people at once. The main difference is that group MMS sends a text to a group of recipients and they can see all of the group members’ responses. Mass text messages can be sent as SMS messages and create separate conversations with each recipient. This allows businesses to interact with customers personally and make connections. 

Mass text messages also provide a level of privacy that group messaging does not. If you are sending a group MMS, you might be creating a group of people that have no connection to each other. This can create confusion for recipients, as well as uncomfortability with their responses being seen by people they do not know. If you need to send a text to thousands of people and you are using group MMS, you will likely create many different groups in order to send the text to all of the intended recipients. This can make it difficult to track mass texting responses, as well as engage one-on-one with customers. With mass text messages, you can send the same message to thousands of recipients and create an individual conversation with each. 

Using a Customer Relationship Management (CRM) platform, each response to mass texts can be individually recorded and added to spreadsheets to help with marketing strategies. 

Mass Text Benefits 

With mass text messages sent out in bulk from your computer, you can use creative ways to engage with customers. If a customer opts in to receiving mass text messages, you can use keywords to create conversations. For example, a customer might text a keyword to a business to trigger an automatic response that can unlock promotions, sales, and insider information. You can also use mass text messages to create surveys that allow people to rate their experience with companies and how they can improve. 

Companies are even using them for applications, status updates, appointment reminders, and RSVPs. Appointment reminders are common because you can easily schedule mass text messages using a CRM platform. If a customer has an appointment coming up, the system is notified and an automatic message is sent out for when it was scheduled. If you have sales and promotions that begin at midnight, you can schedule a mass text to be sent out to opted-in contacts to tell them the sale has begun while you are fast asleep in your bed. 

When a customer decides they no longer want to receive messages or continue a conversation, they can reply with one word to opt out of receiving mass text messages. This can be much more difficult for customers involved in group MMS. 

Which Texting Style Is For You? 

Although mass text messages and group MMS may sound like they are the same, they are very different in terms of how they operate and interact with customers. Group MMS sends a bulk text to a group of recipients. Each recipient is able to see other recipients’ replies, whereas mass text messages are sent in bulk but not as a group message. This way, recipients enter into a one-on-one conversation with a business instead of receiving replies from other contacts they do not know. 

With mass text messages, you can schedule and use keywords to engage with customers. Depending on your needs, you can decide whether mass text messages or group MMS work better for you. Make sure to get the right messaging across!

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