Wednesday, July 4, 2012

Protect you from high inflation

Some Asian country has high inflation. Inflation is a economic condition when the goods and service price increases. It makes the money weak. We must provide more money to buy the same things. For example, last year, you can buy a cup of coffee for $5. Today, It price is $ 5.5. The coffee price increases up to 10 percent.
Certainly, you have to provide addition cash flow. Most people prefer to cut "unnecessary" spending to keep the live. However we do not have to cut the spending if we can anticipate the inflation. Here are some steps that you can do to protect you from inflation.

1. Buy gold or other precious metal such as, silver, platinum, palladium, and else. Gold are believed as the most stable commodity in the world. No one can manipulate the gold price due it is rare and important. In this year, the gold price is skyrocketing.
We can sell the gold anytime especially gold bar. If you want to buy gold, you can use 5% to 20% of your portfolio.
2. Pay the debt off
As the consequence of inflation, the bank or other financial institution will increase the interest rate. The debtor must be hard to pay the debt off due to its interest rate.
Use cash rather than credit card. The credit card company also charge high interest to the holder. 
3. Cut some spending
This is the most ultimate to face with high inflation. You can use coupon to cut your spending meal or pampers.
Buy your meal, meat, and vegetable in bulky at grocery store. By buying at grocery, you can get discount. You do not have to the market often and it can thrift your money. Place those foods at your refrigerator for weeks. However, some food such as vegetable and fruit will be wilted in few days. Some vegetable also will be dried in a week.
4. Buys some defensive stock
The defensive stock still give you return no matter the economic condition. Shift some risky stock to defensive stock. Certainly, you should not put all money at the defensive stock only.
5. Buy actual product
I have ever bought a scooter for $ 260 in 1997 when the crisis beginning. After graduated from bachelor degree or 2003, I sold it for $360. I realized that I cannot get benefit from the scooter but I have protected my money from high inflation. 

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