How to Protect Yourself from Inflation
Focus on inflation-hedged assets. Precious metals, I-Bonds and real estate are all considered inflation hedges. Crypto is a speculation not an investment as can be seen by both its recent downfall and the increasing number of crypto thefts.
1. Precious Metals:
a. Stock in mining companies
i. PRO – familiar and safe market
ii. CON – commissions and volatility
b. Exchange traded funds (EFTs)
i. PRO – Low fees and secure market
ii. CON – No home runs
i. PRO – Can use
ii. CON – No established market, no income and risk of theft
i. PRO – Physical ownership
ii. High commissions and storage costs and no income
a. PRO - Currently paying 9.62% annually — and are 100% guaranteed by the federal government.
b. CON – An annual purchase limit of $10,000 per individual (plus $5,000 with your tax refund), and you can’t redeem these bonds for at least a year after purchase. Withdrawals before five years lose three month’s interest.
3. Real Estate
a. PRO – Passive income, tax advantages, and use of leverage.
b. CON – High cost in either time or fees or both.