Recently US Money Reserve looked at how inflation can hurt you in your daily life and how you can protect yourself from the high cost of inflation. By examining the facts around inflation they showed the many ways that it costs you every day. They also looked at the ways the average consumer can better their own portfolio.
US Money Reserve examined what inflation really is; the increase in the cost of goods and services over a period of time. The Consumer Price Index, or CPI, looks at hundreds of items people use in their day to day lives. By measuring the increase in cost from one year to the next they are able to calculate inflation.
Increased inflation means that as a consumer your money doesn’t go as far as it did the year before. The article looks at two common things, cars and college, and shows the dramatic increases since 1976. The price of college has increased by nearly three times and the cost of an average midsize car has gone up by over 300%. That means the average person is spending more to get the same thing.
As inflation increases and your money doesn’t go as far it complicates other matters. Interest rates on homes, other loans, and credit cards tend to increase causing people to spend less. Although you are potentially saving more, since savings or money market accounts don’t often have interest rates as high as inflation rates your money isn’t growing quickly enough to help your purchasing power. Your retirement is also likely to be affected since it will cost more to maintain your style of living.
US Money Reserve looked at several ways that consumers can protect themselves from the high costs of inflation. First and foremost, they recommend diversifying your portfolio. A multitude of options including storable commodities, natural resources, shares in mining companies, and several other options. They also advise you to invest in yourself by advancing your training, education, and investing your personal skills in your life and finances.
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