Inflation is at a 40 year High. What can you do to win?
The Labor Department Consumer Price Index (CPI) was released for the month of November. The CPI climbed by 6.8% in one year. This is the largest annual climb since June 1982. Food and Energy prices rose 4.9% during this year to year metric. These are known as the core CPI contributors.
Energy had the biggest increase of all. Gasoline was also up by over 50%. You can see the further breakdown below.
So what is all this saying? If you did not get a raise by at least 7% within the past year, you have in fact lost money to the “inflation tax”. The inflation tax is something not really spoken of too much, because it happens to the middle class the most.
You might be wondering- what are some things I can do to beat inflation and keep my dollars working hard? So let’s go over a few things.
Talk to your employer
Low hanging fruit first. You could take the reports from above, or you can find them on the Department of Labor’s website, and print them out. With these in your hand, you could approach your employer and say you are well aware of what is happening in the economy- what can you do to get a raise?
More than likely they will be able to offer you something, soon, since it is December. This may not start until next year but at least it is progress. It is more expensive to have to hire someone else, and then onboard then, rather than giving you an increase in pay.
On the chances they cannot give you a raise, or refuse, just remember that the best way to get a raise from your employer is having leverage. This leverage could come from another job offer. There are millions of open positions looking to be filled in the world, especially the remote world.
Investing in Assets
There is a saying that goes as this:
“The poor live paycheck to paycheck, the middle class saves their paycheck, the rich invests their paycheck. The middle class loses.”
The inflation tax is exactly why the middle class loses. The easiest way to starting beating inflation is investing into assets. When we say assets- what do we mean? The easiest way is to invest your money into the stock market. All you need is a phone and an internet connection to invest your money in the stock market. If you are just beginning, the best approach would be purchasing index funds. There are plenty of these like $SPY, $SPHD, $VOO, $VIG, and lots more. Some of these will pay you a dividend every few months- which also helps in compounding your money. If you are more interested in investing individual dividend stocks Dividend Cultivator has a great course called “Too Much Money” that I will (affiliate) link here. $SPY, which is the leading index fund of the stock market, is up 25% YTD. This beats inflation by 18%.
Bitcoin ($BTC) has also become a store of value within the past year. As you have probably heard, Bitcoin is a little more on the speculative side. Bitcoin is up 66% YTD. Which also beats inflation by 59%.
If both of these fails, or if you do not have money to invest, I would highly recommend you start looking for some side income. This could be active income or passive income, but you should start hustling to get money to invest.
- Dividend Stocks
For the record- I also consider dividend stocks, mentioned above, as passive income because they are paying you to hold shares of the company.
- Crypto Yield
Crypto yield consists of holding certain coins receiving interest paid back. Usually this interest is paid out in the same coin. If you are interested in this look more into BlockFi and Celsius. There are other ways to do this in DeFi (decentralized finance) but that is for another day. If you are very curious, check out the Beginner’s Guide to DeFi that Dividend Cultivator has. Here is the (aff) link to DeFi Culivating.
Do you have a skill you are good at? Do you like to video edit, audio edit, design website, or anything else? I guarantee you someone is looking for your skill on Fiverr or Upwork. They both are very good companies. You can trust these companies to ensure you get your payments correctly and on time.
- Affiliate Marketing
Do you have a high social media following or high engagement? You could have the opportunity to be an affiliate marketer for some big companies. If you have a high following on Instagram or YouTube, you may even be able to land Amazon as an affiliate. I currently do work as an affiliate marketer on Twitter with some of the links I posted above. If you are interested in growing your Twitter handle, check out Brick for Brick Affiliate Marketing for Twitter (aff).
With the internet and open source coding, all things are possible to create new active, or passive, income for yourself. All you need is an open mind and a willingness to learn.
Reach out to me on Twitter if you would like me to go more in depth on any of these.
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Coinbase - Know someone curious about crypto? You’ll both receive $10 in Bitcoin when they buy or sell $100 or more on Coinbase!
DeFi Cultivator - This set of videos will go through a few core concepts along with demos of swaps, liquidity pools, farms, and more.
Too Much Money - This guide takes you step-by-step through the way I personally invest for dividend growth. It works the same way whether you have $100 or $100,000 dollars making this an approachable book for growing your income.
How You Can Reach Financial Independence In 5-10 Years! - Route2Fi is going to show you the steps he is taking to reach financial independence, and now he is going to teach you to do the same!
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Nothing in this email is intended to be financial advice. Always do your own research.