Inflation and What it Means for You

For many of us, inflation is something we have heard about but never really experienced until now. Over the last 20 years, inflation has not been an issue for most of us and this has meant that prices of basic goods have remained affordable.


While inflation is generally negative for all of us as individuals and also for businesses as well, historically, we know it won’t last forever as central banks bring inflation under control.


If we assume the cost of living will rise faster than our salaries or income, we've provided you ways to help you reduce and manage inflation’s impacts.


Easy Remedies to Protect Ourselves from Inflation

  1. Budget more carefully and look at whether costs can be reduced through things like solar.

  2. Try and reduce fuel and energy costs by changing your transport or better insulating your house.

  3. Consider upgrading your skills and investing on yourself so you can get better opportunities or consider getting a second job or another source of income.

  4. Make your money work harder, if you have cash earning nothing, shop around for a bank which will give you interest.

  5. For your longer-term funds make sure they are invested into the right areas and are not negatively affected by inflation.

How can we help at Astra


For the majority of us, inflation will be something we may have not experienced before and therefore, it is hard to prepare for something you have very little knowledge at all. Our role at Astra is to educate and help clients and prospects to ‘financially survive’ this period of rising costs and a reduced standard of living in good shape.


How we are changing clients investments:


We are reducing clients’ holdings in ‘highly geared businesses’ which will struggle to survive with rising interest rates.


We are looking at ‘bullet proof’ assets through funds and shares and alternative assets which have strong finances, low borrowing, pay dividends or rent which is likely to continue because they are in sectors of the market where their business is likely to do well even as inflation increases.


Examples of Bullet Proof Assets:


  1. Blue chip shares like pharmaceutical and energy companies whose products are a necessity.

  2. Sustainable or ‘New Tech’ companies which will benefit from the move away from oil and gas.

  3. Real Estate Investment Trusts [REITS] which generate secure income through warehouses, office space, retail in areas likely to be less affected by inflation.

  4. Agricultural products and technology which will be a winner as the price of agricultural goods increases which will lead to more investment into agriculture and also water.

At Astra we believe that inflation is likely to persist for some time and that this will make people all over the world feel poorer. Like with everything, the reality is that some will suffer more and the impact of the war in Europe will only make the impact of inflation worse and for longer.


The current ‘global politics’, China, US, Taiwan, Russia & Ukraine will only exacerbate this issue and make it more difficult for central banks to win the fight against inflation.


A continued reversal of globalization and nationalistic policies will only help inflation to persist for longer. These changes will make the world feel more lonely and disconnected and it is hoped that the models in Europe and Asia which encourage hope and integration will show the way forward and also help tame inflation.

 

The Author has been a ‘global nomad’ for nearly 40 years living and working and running business’s all over the world. If you are worried about inflation and what to protect your future and discuss your finances feel free to reach out. Schedule a consultation with James Hartland or message him on his LinkedIn.

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