How To Beat Inflation: 3 Expert Tips

Left unattended, the average American adult can gain 1-2 pounds per year. Hardly noticeable, right? Except that after just 7 years, that’s a potentially 14 pound weight gain (and a pretty tight waistband!). Fortunately there are an abundance of books, articles, shows and classes designed to combat the gain.

Inflation is similar. It creeps up and before you know it, your grocery bill has gone from $145 per week to $180. Instead of spending eight dollars for a paperback, you’re spending ten. The reality is that unless you learn how to beat it, you are going to be a victim of inflation.

Prices rise because of inflation. Inflation refers to the rise in prices for goods and services in the economy. This means that, with time, the value of your cash is worth a little bit less. So 10 dollars is worth more today than it will next year.

How To beat inflation?

You need to grow your money by at least the rate of inflation in order to keep up with rising costs. This is where the stock market comes in handy. Over time, the stock market has proven to be the only accessible investment vehicle that provides the ability to grow your money.

But First! How fast do prices go up?

The last recorded inflation rate in the US was at 3.9% in September, 2011. This means that if your groceries cost $500 last September, you would be paying about $520 this September for the exact same things. Now that you know you need to make at least 4% to beat inflation, check out the following tips to learn how to do it:

Beating Inflation Tip #1: Dividend Yield

The stock price is not the only way you can make enough money to beat rising prices. You can also rely on dividends to give you a return that is higher than the inflation rate. Dividends are quarterly payments made by companies to their shareholders (you). The payments will supplement the price changes.

How to Beat Inflation: Look at the Dividend Yield. This shows you what percentage of the stock price you will get back as a dividend payment. It’s like looking at the interest rates on different savings account before putting your money into one.

Beating Inflation Tip #2: The smaller you are, the more room you have to grow

Historically, smaller companies perform better than larger companies. Why? Because smaller companies have more room to grow as they challenge the larger, more established companies. The Wall Street Journal reports that over the last ten years the S&P rose by 14.1%, but the S&P Small Cap 600 rose by 77%!

How can you try to get in on this growth in order to beat inflation? Sort through companies via their market caps on the stock screener and then trade a small cap stock.

(Remember, small cap companies have a market cap of $250 Million to $1 Billion, mid-caps have between $1 Billion and 5 Billion and large-caps are above $5 Billion.

Beating Inflation Tip #3: The golden rule

Pirates looted for it. Kingdoms conquered for it. And now, smart people invest in it. No matter where you go, gold is considered one of the safest investments in the world. It is also an investment that has historically beaten out inflation. For example, in the last 50 years, gold has increased by an average of 9.99% every year, but inflation has averaged 4.05% a year.

Expensive is relative

Keep in mind, the next time you hear someone say, “Wow, this has become so expensive”, you know that that person isn’t really talking about the cost, but rather their ability to keep up with the change in cost. Don’t be on one of them!

Key Takeaways:

To overcome rising pricing you can:

  1. Invest in dividend paying stocks
  2. Invest in small-cap stocks
  3. Invest in Gold

There you have it! Now you have a better idea about how to beat inflation.

Learn more about inflation by taking the WSS Course “Understanding The Economy”

January 2, 2021 Update: We have just announced our BEST STOCK NEWSLETTER of 2020 AWARD!

CLICK HERE to find out which stock newsletter was up 78% in 2020 (and whose 2019 picks are now up 113%).

*** Our Award for BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated January 2, 2021

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

Five of their 2020 stock picks have doubled and the average return of all 24 of their stock picks for 2020 is up 78%!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, January 1, 2021 the Motley Fool's January stock pick (TSLA) is up 720%, their March pick (ZM) is up 172%, their April pick of SHOP is up 226% and their June pick CRWD is up 120%; and another two have more than doubled. In addition, 10 of their 2019, 12 of their 2018, 11 of their 2017, 15 of their 2016. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 209%--tht means over the last 5 years their stock picks, on average, have TRIPLED!

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)



Comments are closed.