There is no doubt, inflation is happening worldwide. It may just be starting here in America, but make no mistake, it will shrink the purchasing power of your money, putting you and your family at risk, and perhaps significantly lower your standard of living.
Due to inflation in other nations, American domestic debt [find out how much we owe at http://usdebtclock.org ], and the US government's previously accumulated debt and nearly $1 trillion in stimulus packages, the American dollar is likely to continue shrinking in value. A tank of gas, or loaf of bread, or sweatshirt will cost you more - in other words, you will be able to buy less, with the same amount of money.
While you can't stop inflation, you can survive it (and thrive) Here are five ways to come out on top.
1. Accept and Prepare
You can't ignore inflation, hoping it will pass. The people who stick their heads in the sand will be blindsided, and realize only too late that they are decidedly unprepared. The good news - it isn't difficult to prepare for inflation, and you can actually weather the coming inflationary storm safely and easily. Commit right now to learning (and doing) what you need to, in order to help yourself and your loved ones come out on top. Reviewing the information here is a great first step. Using what you learn to decide on your own personal strategy will make all the difference.
2. Watch Closely
Inflation is present in countries all over the globe, to varying degrees. While percentages and locations change over time, it will benefit you to keep a close watch on how it is progressing and look to gain continual insights, on an ongoing basis, on how to best adapt, survive, and benefit.
Specifically, watch for changes in the monthly Consumer Price Inflation (CPI) numbers. Increases from month to month may seem small, but a 1/2% increase each month (on top of the base CPI level) adds up.
Keep an eye on the rates in the BRIC countries (Brazil, Russia, India, and China), as inflation there gets passed on to America as they produce goods and services for us. For example, rising inflation in China means that items you buy at Walmart will cost more.
Watch the rates in the MENA (Middle East and North Africa) nations, as inflation there has been leading to uprisings, riots, civil wars, and NATO intervention. According to the National Inflation Association, Americans spend 10%-15% of their income on food, while most people in the MENA region spend as much as 80%. A dramatic increase in the cost of food, as we've recently seen with record high wheat prices, and increases in corn and soy beans, has been the primary driver in the unrest across the MENA nations over the last year.
By paying attention to the global trends, you will be able to anticipate how inflation rates will change here at home. You will be able to appropriately prepare yourself and your family, so that you aren't taken by surprise the next time you fill up your car or buy groceries.
You may want to follow an expert or a trusted source. We routinely watch and comment on inflation trends, ways to benefit and strategies to protect yourself, at Peter Leeds Penny Stocks. There are also many great sources of information that will help you, such as the Bureau of Labor Statistics, Inflation Data and the US Inflation Calculator.
3. Evolve and Adapt
Little changes will make a big difference. Buy supplies and groceries that are on sale. Stock up on non-perishables when the price is right. Use coupons. Take public transit. Reduce wasted food. If the grocery store has 50% off of paper towels, take as many packs as you can. They'll never go bad, and they'll almost certainly cost a lot more 6 months from now. If meat is on sale, get lots and put it in the freezer.
Be sure to keep an eye out for phantom inflation. The box of cereal may be the same size, and the same price, but there may be 15% less contents in the box. You are already a victim of phantom inflation, even if you didn't know it. [Find examples here: www.inflation.us] Just pay extra attention to the printed contents of items like cereal, powders, packaged goods and loaves of bread.
4. Make Investments
You have an opportunity to greatly enrich yourself. In times of turmoil or uncertainty, there are fortunes to be made. While most people will be unaware of inflation, and others will just be trying to deal with it, a small number of people will build a large amount of wealth. [Find out about Depression Era Millionaires.
Get involved with investments that generally perform very well during inflationary times. Prices of precious metals (gold, silver), base metals (copper, aluminum), fertilizers (potash), and oil, to name a few, are likely to rise strongly.
Since we are in the early phases of the inflationary impacts, many of the stocks that are going to benefit the most still have a long way to run. One of the most lucrative ways to take advantage of this fact may be through shares trading at $5 or less (penny stocks), because they have historically enjoyed the greatest percentage price moves. [see The Relationship Between Return and Market Value of Common Stock, Rolf Banz ]
5. Obstacle or Opportunity
Turn your biggest obstacle into your biggest opportunity. There will be certain moves, specific investments and various strategies you could implement which will make all the difference.
For example, many people came out of the Great Depression (their biggest obstacle) as millionaires. While the majority of people were unemployed, broke and starving, people were building dramatic wealth. It is interesting to note that most of those same people would not have had the opportunity to create the fortunes that they did if it were not for the awful economic times. They turned their biggest obstacle into their biggest opportunity and you can do the same for the coming times.On the other side of inflation, if you play your cards right, you could be up a lot. Otherwise, you'll end up as most people will, finding their investments and buying power diluted.
To survive and thrive during inflation, the points above are a great start. Yet, remember, they are merely the beginning. The rewards will come to those who commit to creating opportunity out of obstacles, who plan to end up on top, and who start making the right moves now before it's too late.
Investment analyst Peter Leeds is the owner and founder of Peter Leeds Penny Stocks and the author of the new book Invest in Penny Stocks: A Guide to Profitable Trading. Leeds has been a guest speaker at the American Stock Exchange, and has led panels at conferences.