You can make money with your mind, you can make money with your hands but one way that most people overlook when it comes to making money is making it with inflation. If you’ve turned on any financial news lately, you can’t miss experts talking about inflation. For the average person, inflation is just a financial consequence they must bear; however for the financial elite, it’s another opportunity to make money. If you want to be in this second group then you’re in luck because we will now get into 5 ways to make money with inflation!
Now, before we get into how you can use inflation to improve your financial position, I have to make sure you and I are on the same page as to what inflation really is. I know you’ve heard about it before and know that it can affect your finances in many ways but just so we’re clear let me briefly define what inflation is. Inflation is a sustained increase in the price of goods and services which in turn reduces the purchasing power of the money you have. Examples of this are when you go to the store and milk and bread have now shot up in price meaning that your grocery bill just got a bit more expensive. Because of inflation, you’re now going to have to hand over more money for the same goods you used to be able to buy with noticeably less money.
The next question we must answer before I explain how you can profit from inflation is why the hell do we have inflation in the first place? I mean, do prices really need to ever go up? I don’t know about you but I prefer to pay less when I go to the store or shop online and I’d be willing to guess that you feel the same. Well, inflation is a by-product of three financial phenomena with the first being demand-pull inflation.
Types of Inflation
Demand-pull inflation takes place when more money becomes available, which we’ve seen recently through the printing of trillions of dollars in the United States in the form of stimulus checks and other governmental programs. In effect, people have more money to spend and this increases demand for goods of which supply can not always be met which drives up prices.
Then there’s cost-push inflation which is the direct result of production costs rising. Think about how limited natural resources like lumber have been over the past year and…