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.


ALSO READ: 6 Mutual Fund Myths. Busted.


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?


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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”



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MARCH 23, 2020: URGENT UPDATES TO HELP YOU MAKE MONEY WHEN THE MARKET IS DOWN!

The markets have dropped over 30% since their highs just a few weeks ago because of the Coronavirus, but we are starting to see more signs that this might be a PERFECT BUYING OPPORTUNITY:

#1. HOT Fool Picks in Spite of Crash. Here is why we love the Motley Fool--On Thursday, March 19, 2020 they recommended Zoom Video (Ticker ZM) when it was at $124. Today, March 23 it closed at $160, that's up 29% in 3 days! But that's not all, they also recommended it October 3, 2019 when it was at $77 so that is up 108% since they picked it back in October, in spite of the market crashing 30%. Other recent picks are TSLA, NFLX and TTD which are all UP since they were picked!

#2. Stock Prices Are Down 30%.  This is a good thing! If you are thinking of buying stocks, now's your chance to get quality companies at much more affordable prices. This offers a very attractive entry point, because stocks are ON SALE and you can now buy quality stocks for 30% less than you would have paid for them in February.

#3. More Articles Are Starting To Recommend Buying. As we are nearing the bottom of this drop, we are starting to see more articles like this: BlackRock is suggesting we may be at a "once in a lifetime opportunity", Morgan Stanley says to start buying, and Warren Buffet has a stock pile of cash and rumors are he is starting to buy.

#4. Dollar Cost Averaging Works! Since nobody knows where the bottom will be exactly, smart investors continue to invest a fixed dollar amount in the market each month. This is called Dollar Cost Averaging. That way, when the markets are down you are buying more shares of your favorite stocks at cheaper prices. This helps drive down your average cost and increase your profits when the stock market moves back up.

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