We are now closing the 4th month of the year, as April comes to an end, I am sure the realization that we are surviving another year of Pandemic-Hell should be inspiring…at least.
COVID has allowed for closer attention to be paid to the simple things. Looking inward, we can gain some benefit from applying a different lens to looking at how what is outside affects us, on the inside, and maybe how what is inside, affects how we see things on the outside.
Financial Inflation and Personal Inflation
Inflation in financial basic terms is the rate of which a currency falls while the costs of what you need the currency to do…increases. Inflation Risk is one of the important components to consider when looking into wealth building. Ensuring investments are inflation linked is a way to preserve the value of your money, now and in the future.
Read more about inflation here
Personal Inflation can therefore be considered the value at which…our greatest currency – TIME is available to do all the things we need time to do in our lives. The facts are, no one knows how much time anyone has left on this earth. We make our plans, set our goals but have no idea when our TIME will be fully spent, rendering us incapable of carrying out the things we want to do.
The Personal Inflation gamble can be hedged with a few specific strategies:
a) Take care of your mental, physical and financial health. All are related and impact each other, anything that threatens your mental, physical or financial health proposes too high a risk and should be avoided/eliminated expeditiously! From sugar drinks and a sedentary lifestyle through to associations that distress you over inspiring you.
b) Be honest about your priorities. Loving your family or children means ensuring they are not less off if you passed away. Simple. Prioritizing your life insurance is not rocket science. Just like prioritizing your mental, physical and financial health should be first in line.
Hedging against financial inflation can also be addressed with two strategies:
a) Earn more or ask for an increase in salary that is linked to inflation. The more you earn is the more secure your ability to purchase the things you can, even if there is a price increase. Conversely, if your income doesn’t increase or worse, if your income decreases, your quality of life, or what you may be accustomed to will change, with you on the edge or freefalling into financial poverty.
b) Invest in instruments that are inflation linked and will therefore retain the value of your money. Life insurance is one such primary investment that is inflation linked and preserves the value of your investment.
Inflation is simply a natural hazard of life, how are you protecting yourself and your investments from inflation risk, personally and financially
Please share this post…but only if it brought you some value!
Please also don’t forget to join my zoom classes on Tuesday at 8pm. Each week I have an interesting guest sharing some practical tips around financially related themes.
Have a wonderful successful week of Inflation management!!! <3