Apr 14, 2022  | Tags: inflation, money management

Our insights

Inflation has arrived and it looks like it is getting worse before it gets better.

We’re all feeling the pinch at the bowser as fuel soars beyond $2/litre and that’s having a flow on effect to almost every other industry.

But there are ways to combat the sting of inflation’s far-reaching tentacles. Some may even be able to profit from it. 

Here are a few ideas to help you tackle inflation head on.

Invest

There’s plenty of trepidation about the stock market at the moment but there are many opportunities as well.

In times of high inflation, bigger companies with strong profit margins and the ability to naturally create their own prices tend to do very well.

Commodity resource companies including oil, grains and metals are perfect examples.

Healthcare companies with the lowest production costs also dodge the inflation bullet. 

Look for companies that pay solid dividends and always remember to diversify your portfolio.

Consider buying that house

Housing prices have risen steeply in recent months but times of high inflation make a compelling case to buy a house rather than rent.

Forget about trying to make a quick buck and if you decide to buy, make sure that you are prepared to hold the property for a number of years as the property market could cool off at any moment. 

Real estate ‘bubbles’, like the one we find ourselves in today, are often followed by natural periods of correction where some short term value may be lost, but the history of Australia’s property market shows that over enough time, their value will increase and keep on increasing. 

Defer big purchases

It’s a hot market at the moment but prices may not remain high forever.

If there are some big purchases you have in mind, consider deferring them if possible.

Used car prices have been impacted by inflation but are likely to fall at some stage.

The cost of building materials for home improvements have risen due to sky-high demand and interrupted supply chains.

If you can wait for the demand to subside, chances are that the prices may also subside.

Negotiate prices 

Everyone’s doing it tough and scrounging for an extra dollar. Don’t be shy about doing the same. 

It doesn’t hurt to seek a better deal on nearly anything, especially regular expenses like gas and electricity bills, insurance premiums, streaming services and gym memberships.

Research shows people who ask for a lower price are more often than not successful.

If you don’t have any luck, shop around!

Be more energy efficient

The cost of fuel has reached record levels so consider using more public transport, riding a bike or walking.

And do your homework on your own car. Perhaps you should trade it in for a more energy-efficient model. 

Consider solar panels for your roof to drive down your electricity bill. 

While water-saving shower heads are just one super simple example that can make a huge difference to your usage and cost.

Invest in you

Your biggest asset is you.

Think about upskilling with further education to make yourself more relevant in a rapidly changing world.

Putting yourself at the cutting edge of innovation is a great way to make your salary inflation-proof as well as your career recession-proof.

It also gives you more bargaining power when you approach the boss for a pay rise. 

Many businesses are expected to resist workers’ demands for pay increases despite rising costs. 

Remember, if your wages only rise by 3% and inflation is running at 6%, you are going backwards at the rate of 3% for the year.

Get advice today

Economic conditions are changing rapidly and it’s always prudent to seek professional financial advice to not just manage and protect but advance your wealth.

Talking to an experienced financial adviser and wealth creator is one of the best investments you will ever make.

Contact us today to discuss all of your financial needs.

Written by Stefan Miraglia. 

The information contained on this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Taxation, legal and other matters referred to on this website are of a general nature only and are based on Calder Wealth Management’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.

Calder specialises in wealth management with a focus on advice, investment, sustainability, insurance and finance.

Contact us now for a no obligations discussion about your needs.