How to Beat Inflation 5 Different Ways

While it’s common to talk about all the negative effects of inflation, most financial media outlets aren’t forthcoming with solutions. It’s easy to get swept up in the fear that inflation is getting out of control, and that consumers don’t have the means to keep up. So we want to shed light on how to beat inflation so that you can face the future with confidence. 

The Importance of Playing the Long Game

Before we get into solutions, let’s get clear: there are no overnight solutions. There are things you can put in motion today that will help you in the long-term to prosper no matter what inflation looks like, and that’s what we are choosing to focus on. There’s no hack, no magic investment or product; you must simply do the work.

Take ownership of your finances and financial strategies, and choose to create more control for yourself. It’s hard work, over many years, yet you’ll find that the results are worth the effort. The seeds you plant today will take time and dedication to blossom. Just know that everything you do now serves a more Prosperous future, which is even better than planting no seeds at all. (Check out this blog to learn more about why whole life insurance is like gardening.)

How to Beat Inflation in 5 Steps

If you want to set your future self up for success no matter what inflation looks like, follow these steps to beat inflation in the long term. 

1. Invest In Yourself

You’re playing the long game, remember? In the long-term, knowing what you’re good at, and developing those skills, will be invaluable to your Prosperity journey. Investing in yourself isn’t just about spending money, though that may be a part of it. It’s also crucial to spend your time and energy doing things that hone and develop your skills. 

The reason this helps with inflation is two-fold. The first reason is that one of the best ways to beat inflation is to make more money. So sharpening your skills and becoming increasingly proficient can help you pave the way to greater earnings over your lifetime. The second reason is that when you develop yourself and your skills, you create more opportunities for yourself. Through self-development, you can ensure that there is always a place for you in the marketplace. 

Take the time to watch webinars, attend conferences, take classes, and read books. Find mentors and learn from them. Ask questions. These are all practical ways to develop your craft and create value.

2. Find What You Love and Keep Doing It

This step goes hand-in-hand with the first. One key to beating inflation is to keep being of service for as long as possible. Earning an income is one of the best ways to beat inflation. And if you want to work as long as possible, it’s ideal to find something you love doing. 

Too many people choose a work model that creates burnout. People work jobs they can tolerate for a time, then either move to something else or retire as soon as possible. Yet if you’re concerned about inflation, retirement makes little sense. 

If you look at the calculator below, you’ll see that $100,000 of income at a modest inflation rate of 3% is more like $242,726 in 30 years. This means that if you retired in 30 years, and wanted to pull the same $100,000 of income from your retirement accounts, you’d need that much to have the same “impact.”

How to beat inflation: a future value calculator showing the impact of inflation on income.

This means the people saving $1 million for retirement will have less to work with than they think, thanks to inflation. The best way to avoid running out of money is to keep earning an income as long as possible. For most people, this requires a job they’re excited to wake up for. 

3. Buy Assets With Fixed Payments

What’s something that actually improves with inflation? Fixed-payment loans. Let’s reverse engineer the above calculation. It takes almost double the amount of money to FEEL like the same dollars. This is because goods get more expensive with inflation, so to pay for the same consumption of gas, groceries, and services, you must use more money.

When you have a fixed payment, like a mortgage, you know it isn’t increasing. It stays locked in for the term of the loan. So over time, while everything is going up in price, your home payment stays the same, which actually makes it feel like less. So if you had a $1,000 monthly mortgage payment, in 30 years at a 3% inflation rate, it will actually feel like $407 in today’s dollars.

How to beat inflation. A present value calculator showing the impact of inflation on a mortgage.

If you want to know how to profit from inflation, you should choose assets with fixed payments. That way, over time, the impact of these payments lessens. Real estate and whole life insurance premiums are two of the best assets to have to “beat” inflation.

4. Take Responsibility for Your Mindset

While you may not be able to change your thinking overnight (though never say never), it’s important to work on how you see the world. If you consistently dwell in a place of fear and pessimism, it’s going to be pretty difficult to see opportunities.

For example, those who are fearful of money and the marketplace tend to act counterintuitive to their growth. They may fear making decisions that could have a positive impact in the long term because they feel a sense of lack now. However, it’s diligent work over time that helps people to get out of negative money habits and patterns. 

You can start transforming your financial life by cultivating a positive mindset. If you’re afraid of saving money for the future because you may “need” it now, consider that saving into a whole life policy can help you protect your loved ones and create more opportunities later. Learn more about cultivating a positive mindset in the article: “Re-Think Your Mindset for Prosperity and Abundance.”

5. Take Responsibility for Your Money

Finally, if you want to change your financial circumstances and beat inflation, you must take responsibility for your money habits. Saving diligently is hard for many people, yet saving money is one of the most helpful money habits you can adopt. 

Choose a habit you’d like to establish and take the time to make it happen. If you’d like to be a better saver, open a whole life insurance policy. Every time you’re paying a premium, you’re adding to your pool of money. It just happens to show up like a bill, to which we say, “Great!” When things appear as bills, we take them more seriously. You can also find comfort in the fact that your savings will be tax-advantaged, liquid, and earning interest and dividends. 

Want to Beat Inflation? Let Us Help.

Are you ready to take responsibility for your money and your mindset? We’d love to help you open a whole life insurance policy so that you can start your savings journey. You can reach out to us here, or email your questions to welcome@prosperitythinkers.com

If you’d like to learn more about us, our philosophy, and how we approach money matters, sign up for our Prosperity Action Pack. You’ll receive exclusive content straight to your inbox so that you can activate Prosperity.

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