Inflation is at 5.4% year over year. What that means is your $100 bill a year ago, is worth $94.60 today. And if inflation goes up 5% over the next year, it’ll be worth about $89.87.
So if you hold cash, and there is inflation… you’re at risk of losing money.
But you can control the risk.
One way to combat inflation is to own assets that appreciate. In particular, assets with a fixed payment (mortgage). This is one reason why there’s been a huge boom in real estate. Folks know there’s inflation and more is coming.
So buy a house that can appreciate with a fixed-rate mortgage. You’re payment isn’t going up, but your asset is. This is why owning real estate is one of the greatest hedges against inflation. And it’s why this market may last longer then you think…
And to sweeten this scenario even further, the bank gave you 80% of the money to buy your home. That’s leverage. That’s brilliant.
P.S. Did you see my latest VIDEO? In it, I share ideas about how headlines wrongly depict our real estate market and back it up with 6 fundamental data points why this market will last longer than you think.
