Inflation can simply be said to be a long term rise in the prices of goods and services caused by the devaluation of currency. While there are advantages to inflation there are also negative aspects of inflation.
As Covid-19 is causing businesses to become bankrupt, shuttering businesses and affecting peoples life’s, some economists and financial analyst fret that the pandemic could lead to inflation. However, understanding the effects of inflation is the first step to making long-term decisions to mitigate the risks.
The effects of inflation are huge. It doesn’t just affect areas like our salaries and the cost of purchasing a product or service. Inflation hits us from every angle. Food prices go up, transportation prices increase, and the cost of various other goods and services skyrocket over time. All of these factors make it absolutely essential that we account for the huge impacts that inflation can have on our long-term savings, business decisions and every day life.
These are not the only 3 ways, but they are just highlights on how to avoid inflation.
1- Save more, or invest more aggressively. Saving more is probably the easiest and most proactive thing you can do to ensure your ability to guide your future from price hikes and any uncertainty.
2- Spend money on long-term investments. Investments on capital expenditures or real estate. Spending money now can allow you to benefit from inflation on the long run.
3- Invest in stock market. Stock markets are a good place to invest your cash in. This will yield huge returns for you as an investor and the company.