From many of the headlines and articles I’ve been reading lately, you really would think the end of the world is near. Now, I’m not that paranoid but there are certain things you need to do to protect yourself, specifically from the coming wave of inflation, thanks to the governments spending spree of trillions of dollars. If you don’t take the steps I’m about to share with you… you might find yourself with a lot less money.
First of course, is to continue to invest in real estate. Buy as many houses as you can while we still have these rock bottom prices. Most likely we won’t see these large of discounts for another 20 to 30 years. And when inflation finally kicks in, real estate is one of the best assets to own. There will be a run-up in prices in the next few years and the more houses you own, obviously the more money you will make.
Second, buy some gold. Yes, I’m serious about this. Gold is another great hedge against inflation. As the value of the dollar erodes thanks to Uncle Sam’s spending, gold prices will have a huge increase. So where do you buy gold and what type? Personally, I like the South African Krugerrand. It’s one of the world’s most well-known gold coins, and each coin weighs one ounce of gold. So as I write this, gold is worth $954.10 per ounce. Which means each Krugerrand is worth $954.10. The best site I’ve found is kitco.com to buy these coins (no I do not have any affiliation with this site; it’s just based on a lot of research I have done).
Third, invest in REIT’s (real estate investment trusts). REIT’s are another great way to diversify your real estate investments. REIT’s like all housing investments have been hammered by the economy. But when things pick up, you could make some serious gains. The REIT I like–which is simple to invest in–is the one from Vanguard.
Protect Your Hard Earned Money
Now I know this wasn’t my traditional type of post and lists some unusual actions to take. But I believe as investors and entrepreneurs we need to always be well-rounded, diversify our assets and protect the money we’ve worked hard for. Once you get “good” at this business and start to close a lot of deals, you can suddenly find yourself sitting with hundreds of thousands of dollars in your bank account. Don’t leave it all there. Buy more houses, more gold and invest in some REIT’s.
Also, if you really want to think outside the box and subscribe to some of the crazy theories out there, buy a safe place to go such as a cabin in the woods, in case the “stuff” should really ever hit the fan.
I don’t see that happening, and right now my main concern is to protect my money from inflation. Which means starting this week you should start this diversification. You don’t want too much money sitting in your bank account, earning zero interest.
Yes, you need to have an emergency fund of several months, but other than that don’t keep too much cash in there. Plus, hopefully you’re a smart investor who uses other people’s money and other people’s credit, so you don’t need that much cash anyway.
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