If you tune into any current financial news network, you are bound to hear about the modern-day boogeyman – inflation. Coming fresh out of a pandemic, the U.S. dollar is rapidly losing its value. Why? Because the government printed new money like crazy to fund economic stimulus bills. As the dollar supply goes up, the value of dollars goes down. That means the money Americans have stacked up in their savings accounts is dropping in value more and more as inflation eats away years of sacrifice and hard work.
So, what are we left to do?
Jaspreet Singh, attorney, investor, and founder of the Minority Mindset, breaks down 5 different ways to stay ahead of the curve and keep inflation from eating up your wealth.
The first investment Jaspreet recommends is real estate. He likes real estate because it can provide consistent cash flow and tax deductions. But, that doesn’t mean you should just buy any property. You have single family homes, apartment complexes, office buildings, strip plazas.
Jaspreet says that he looks for real estate investments in locations that have longevity, meaning they are growing: growing in population, growing in businesses, and growing in cash flow. A reliable, promising real estate investment in an up-and-coming area will rise in value over time and provide growing cash flows, which is truly all you can ask for in any investment.
Lastly, real estate investments provide financial security. So, if you spend all your money this month (not recommended) or you suddenly lose your job, you have those extra rent checks coming in every month to save the day.
But it’s not completely risk-free. You have the risk of tenants not paying rent and potentially damaging your property. This is where cash reserves and a good property manager come in handy.
About 15 years ago, two-thirds of investors were primarily focused on the stock market. Although that number has fallen to 50% due to peaking interest in crypto and real estate, stocks still remain a staple in any investment portfolio.
Jaspreet invests in the stock market because he believes in the future of the American economy, even though all of its rough patches. He has two main strategies he follows when investing in the stock market:
- Active strategy – Looking for individual companies to invest in for the long term, which involves more research, analysis, and hands-on effort.
- Passive strategy – Buying ETFs weekly, whether the market is up or down. This is an easier strategy for the beginning investor because it gives you exposure to the market without stressing to make the best stock picks. This option is lower risk than the active strategy because you’re not trying to pick the best stock.
The key, according to Jaspreet, is you have to invest for the long term.
Regardless, both strategies can help you grow your wealth much faster, and save your dough from the I-word (inflation).
As an entrepreneur, Jaspreet believes in and supports other startup business owners. He invests in various startups because he believes innovation is needed in order for the American economy to flourish and evolve – and because current technology won’t last forever.
Investing in startups is incredibly risky, and there is a chance you can lose all of your money, but just like most high risk situations, it offers high potential rewards as well.
Unlike before, investing in startup companies has become much more accessible to the average investor thanks to something called Regulation CF – a new rule which lets regular people invest in startups with as little as $100. There are many crowdfunding websites online which allow you to start investing in smaller companies.
Cryptocurrency is all the rage now, so it’s not surprising that 1 in 10 people invest in crypto – and Jaspreet is one of those people. He views crypto as the peoples’ movement of money coming from the ground up.
According to Jaspreet, you’re seeing more people buying cryptocurrencies like Bitcoin to protect themselves against inflation. But, he says, don’t chase the hype. There are some not-so-good cryptocurrencies on the market. So make educated investments.
Jaspreet also follows an active and passive strategy with crypto investing similar to stocks:
- Active strategy – if crypto is crashing, Jaspreet will “buy the dip” for certain cryptocurrencies.
- Passive strategy – Everyday, money is flowing into different cryptocurrencies by the dollar cost averaging strategy, no matter if the crypto’s value is up or down.
Jaspreet also moved a large chunk of his savings into stablecoins to collect higher interest. Stablecoins are cryptocurrencies backed by dollars and designed to maintain a stable price over a long period of time. He says that this allows him to earn upwards of 8% a year in interest on his savings.
Lastly, Jaspreet owns physical gold and treats it as if it were money. He says it doesn’t matter if the price of gold goes up or down, the real value behind gold is the time, effort, and labor it takes to produce the gold.
Like Jaspreet says, gold is a store of value.
Gold has symbolized money for centuries. So regardless of how inflation will affect the U.S. dollar, gold is always going to have some sort of value. It’s always good to have a trusty back-up.
The Bottom Line
The U.S. dollar is on the decline, and this isn’t anything new. Since the beginning of the 1900’s, the dollar’s value has been dropping. Even since the 1970’s, the dollar has lost nearly 80% of its value.
Average people cannot control inflation, so owning assets and making smart investments is the only way to stay ahead and protect your money from losing its worth. Jaspreet’s mission is to provide free, financial education on multiple, accessible platforms so no one has to fall victim to inflation. Check out Jaspreet’s Youtube channel to learn more and start protecting your funds.