Inflation Is A Reality. Learn To Live With It.

Most companies in the US again adjusted the salaries by 2–3% thinking that inflation is not a threat and that it will go away soon. They do not see it coming. Inflation is a real threat and is part of our lives from now on. Instead of denying it, start learning how to cope with it.

The bad news is that it is now only the US that is at risk of inflation but all the countries around the world. Developed countries are also at risk and have more to lose than the developing countries in the merging markets.

First things first.

Why inflation is not temporary but permanent?

• In the early 1800s, the gold standard started in England. The amount of money printed was backed up by the same value of gold.

Plus, the price of dairy products started to increase. The climate is changing. Regional wars have been impacting oil prices and gold is becoming more like safe heaven. Since 2020, the US government has been buying bunds to keep the stock exchange high as the barometer of the economy in the US is the stock exhange. Scarce resources are getting harder to find and their prices increase.

The governments cannot reduce the amount of money printed and with more risks in the global markets, they will have to print even more money which may lead to more inflation.

This is happening all around the world now. Look at the prices in the market if you do not believe me and take a look at how other countries are doing too.

Inflation is a reality so we better learn to live with it.

Companies will be late to plan for and live with inflation. Salary adjustments will be late to come.

Keep your job. Stick to it. Even the financially healthy companies will be fragile in case of another global economical crisis.

Do not deny inflation if the statistics start showing that. Instead, adapt your mindset and know that it is not the end of the world. Millions of people around the world in many countries have been living like this for decades. Each new condition will establish its own equilibrium so the markets will develop the tools to cope with inflation and you will also learn to live with it.

Cash flow management will be more important than ever. Stay at cash to be able to make agile investments and grab any opportunities. Reduce your debt.

Stock markets are at the edge of a crash as portrayed on the recent front page of the well-known Economist.

Keep your money in your pocket. Do not spend on nice-to-have needs. Buy the must-have needs and save your money.

Stay away from risky investments. Do not risk your money in roller-coaster type of investments because anything may happen at any moment now.`

Buy land in the outer skirts of a growing city. You can buy at a low price now and in 10 years when the city expands to that area, your isolated land will be part of the city and will help you make money.

The same goes with houses in growing cities or areas.

Inflation is not a good thing but soon the markets will develop the right tools to attract your money. Look for real interest income (interest level above the inflation rate) — banks will start offering higher returns for you when they see inflation becoming a reality.

Look for options to buy some gold perhaps as gold is still a long-term anchor and safe heaven to protect your savings. Do not concentrate on gold only, try to have a mix of various safe investments.

Developing countries have more passive income opportunities than emerging countries. Try to find one of two that will give you more savings.

Foreign exchange risk may become more of a risk soon also in the US, and it might be good to keep some money in other string currencies too.

Second-hand cars, assets might be subject to a strong increase. There might be some opportunities.

Invest in your learning and develop new skills. You may need them soon to land a better and more paying job.

If you can do this, get away from jobs in companies that do business in turbulent markets. Some global companies dominate their industry and are doing better than the countries they are operating in. Try to find a job in such all-time growing companies.

As I mentioned earlier, new situations and conditions will call for a new equilibrium and we will all learn to live with inflation if needed. Learn to adapt yourself.

With love,

Kenan

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