C Garrett Moore, CFP®
Inflation & What To Do About It
"We use the term risk all too casually, and the term uncertainty all too rarely."
- John Bogle
Inflation has been in the headlines recently. It's an important aspect to consider when it comes to personal financial planning, simply because inflation means that it's going to cost you more to live later on.
What can I do about it?
In short, you need to own assets that can at least keep pace with inflation, if not outrun it. Two common ways you can do this are through real estate and investments.
While home ownership can certainly come with its own unforeseen expenses, the combination of a decreasing mortgage balance with a generally appreciating value makes for natural inflation protection.
You can also do this by investing (notably different than merely saving), and keeping a suitable portion of your portfolio in stocks.
U.S. stocks have grown at around 5-6% more than the inflation rate, and have thusly proven to be one of the best ways to protect yourself from inflation.
This is partly because the companies that those stocks represent will likely protect their businesses (and subsequently your investment in them) by raising their own prices.
It's only natural to focus on the immediate uncertainty that is involved with investing in the stock market, but we must not forget the risks of not protecting ourselves from the threat of inflation, which could mean a continual decline in your standard of living.
C Garrett Moore, ChFC®
Moore Financial Management, Inc.
Office Line: 941-544-2269
Dedicated Text Line: 941-877-6011