Beat Inflation The Best & Safest Way – Mastery Not Required

Inflation is not going to be transitory. It will be bad. We need to learn to beat inflation. The good news is that anyone can learn to do it.

It seems like most of the world is finally coming out of lockdown, and so that must be a great thing for the economy, right?

I mean, if we did well during COVID, surely we’ll be doing much better with the economy opened up, and businesses actually having traffic coming through them.

I don’t think so.

Why Worry About Inflation Now?

With everything booming the way it is, why worry about inflation? “Stop being a kill joy Tim!” The stock market’s been going up and up, the Fed tells us there’s nothing to worry about, because inflation is transitory…

Well, the economy did well because new areas were stimulated to grow.  For instance, people who would never shop online had to.  For the last 5 years, when I used Zoom, most people went, “huh?” and in the last year, even my mum was on Zoom with her relatives!  And these are high growth areas.

But the economy at large did well as well, largely to the immense amount of money that’s been poured into it, and like any big stimulus, it has to stop at some stage, and when that happens, things aren’t going to be pretty.

Think about drinking a super espresso.  It’ll perk you up.  Drink 4 or 5 a day.  You’ll be very perky.  But you can’t keep doing that forever, you’ll burn out.

It’s the same with the money supply. 

And you’ll hear people saying, “don’t worry, we printed money in 2008, and that led to the longest bull run in history…”

True, but let me show you how much was printed to get out of COVID compared to what was printed in 2008.

Inflation Is Unavoidable

Source: St Louis Fed

This is a chart of the M1 money supply.  If you’re unfamiliar with the term, the M1 money supply is the most liquid form of money.  It comprises cash on hand, cash savings, and short term deposits. 

With this amount of money, what’s going to happen is inflation will hit.  The Fed’s been saying that it’s transitory, but unless production spikes the way money supply has, inflation will hit, because all inflation is, is having too few goods, being chased by too much money.

And with the money supply looking the way it does, it won’t be a “soft landing”.

Inflation Can Be Good If You’re An Asset Owner

That said, inflation does not need to be a bad thing.

Inflation can be good, if you’re an asset owner.  Think about this.  Say a house or an apartment.  Before you buy it, you want the price to be low.  After you buy it, you want the price to be high.

And inflation, just means that the prices are going up, often out of control.

Inflation is how all wealthy people made money.  By owning assets that appreciate.

You Can’t Just Buy Anything And Hope To Beat Inflation

I don’t believe in buying speculative assets, but assets which are backed up by cashflow.  For instance, land with nothing on it, is speculative, because the price is not backed up by cashflow.  However, if there’s an apartment block on it, and the apartments are rented out, then there’s income, and that can be valued by discounting future income, and so that asset is no longer speculative – they are cash producing assets.  Such assets not only hold their value, their value increases over time, because their earnings increase over time – thanks to inflation.

When we own such assets, not only do they increase in value, they also pay us an income.  And that helps us beat inflation in two ways simultaneously!

The important thing is to buy these assets when their prices are below their value.

So, if you hold such assets, is inflation a bad thing?

No, it’s not. 

In fact, this is the way most wealthy people have grown their wealth.

When you see assets this way, being able to afford to live your purpose isn’t that far away. 

You Can Beat Inflation – Mastery Not Required

Most people don’t do it, because they perceive it as “too difficult” or that investing in this way is “gambling”, “risky”, “only for the rich”, or “it’s just not for them.  The truth is, it’s not any of these things.

The key to being able to do this, is to let purpose lead the proficiency you need.  I want to give you the confidence to be able to see things this way. 

And so I’d like to invite you to the Mastery Not Required’s Purpose Confident program, where you will:

1. Learn how you can learn anything faster, and do things a lot more easily, by using the Purpostry Principles,
2. Discover all 4 levels of your Purpose, so that you can align to them, and use them to guide how much proficiency you need, so that you can easily afford to live your Purpose, and
3. Reset your money mindset so that you can see that despite everything you’ve been told, making money isn’t difficult, and it is for you – because you have a purpose, and you can afford to live it!