How to protect from inflation? - page 6.

jaysabi

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Quote from: Poker Player on May 26, 2021, 05:26:19 AM

Since we are in a Bitcoin forum, it is normal to think that the best protection against inflation is Bitcoin. And it is not that it is (only) a distorted thought, the (short) history of the Bitcoin proves it to us.

Then there are other things that are debatable. Gold today is not bad, but if most of the money that is invested in gold goes to Bitcoin, it will not serve to protect much. That's what has happened this past year.

NASDAQ 100, OK. I prefer the S&P 500 which is more diversified in sectors. The NASDAQ 100 has been more profitable than the S&P 500 in recent years but that can change at any time.

Then I also miss good, well-located, Real State on that list.

The short history of bitcoin definitely does not prove it's a good hedge against inflation. Bitcoin is down nearly 50% since the beginning of May. When was the last time the dollar was down 50% in a matter of weeks? Never. You can't hedge 2% inflation losses with an assets that routinely swings 20% or more in a single day.

boumalo

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Quote from: justdimin on June 08, 2021, 11:26:13 AM

Quote from: boumalo on June 08, 2021, 12:08:02 AM

Real estate is both an asset and a liability, you usually have property taxes, maintenance and risks. But if the rent offset the other costs, you can enjoy the asset appreciation with some work to rent and maintain the property.

A good but difficult way to protect against inflation is to have skills that will be in high demand.

A simple way to protect against inflation is to go to a hard discount store and buy a year worth of non perishable supply, you will save both because you buy in bulk and because you will pay today's price instead of the inflated price you would have paid later on.

There are places in the world where price of real estate drops instead of goes up, but those places are very very rare, when you look at it in the long term you always end up profiting from having it. However between the costs and taxes of keeping it, you are not going to profit from it as much as people imagine, it is going to be decent but it is not going to be insanely profitable, especially considering how much we are profiting from crypto right now.

For example, if I put my money in bitcoin and wait for 10 years, I am 100% sure that I would make more profit from that compared to buying a house and holding it for 10 years, so why would I go do that? People just want to "see" their investments, there are those people, people who buy gold and silver physically, people who buy houses or even cars which usually drops in value, so it is really a personal choice, not a financial one.

It would be easy if it was 100% sure ;-) There is a risk with every investment, including Bitcoin.

bayu7adi

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Quote from: inoes on June 09, 2021, 01:20:45 PM

Basically, inflation will greatly affect financial conditions. The higher the inflation rate, the lower the value of the money you have. Most people will invest in activities to suppress this inflation rate in their finances. but I prefer you, to investing in the property sector, because now the bitcoin market is not normal. if you have started investing, then you should still have savings to prepare for daily life and have an emergency fund when it is needed so that your investment is not disrupted.

Using the property business as a safe point is a very relevant option in times like these. When cryptocurrencies come with a very high risk, we can always cover the worst with the results obtained from the property business.
The exact formula that I really like is, doing business in a profitable sector with low risk is more profitable than doing business in a high risk sector.
Besides being able to maintain the economic stability of my life, I can also learn high risk management (such as cryptocurrency).

bitgolden

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Bitcoin? I mean isn't that the whole purpose where we have a currency that is limited so that it would gain value over time instead of lose value over time and the more people that uses it means the more people that buy it causing the price to go higher and higher whereas the fiat world is just going lower and lower because of how much they print every single year?

Just in the past 1.5 years USA printed how many trillions of dollars? That is why I believe if you put your money into bitcoin that means you are going to end up with a good amount of profit over course of years, many people want to make money right now and right away but the reality is that we are not going to see that all too often, however if you are willing to wait years for it, crypto is a great way to make a profit and that is what I am doing, putting my money in crypto to save from inflation.

inoes

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Basically, inflation will greatly affect financial conditions. The higher the inflation rate, the lower the value of the money you have. Most people will invest in activities to suppress this inflation rate in their finances. but I prefer you, to investing in the property sector, because now the bitcoin market is not normal. if you have started investing, then you should still have savings to prepare for daily life and have an emergency fund when it is needed so that your investment is not disrupted.

ilovealtcoins

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To avoid inflation, we need to understand it and have a plan to avoid it. Personally, I would diversify my holdings to never put all my eggs in one place. For a business, inflation occurs unexpectedly and is more difficult to control. Many businesses have gone bankrupt because of inflation. Small and medium enterprises are easy to go bankrupt because their business is not always favorable.

Vishnu.Reang

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There is no relation between inflation and the price of bitcoin, inflation is happening in the economy and this is not a bad thing, inflation happens when your countries economy is going strong and that makes inflation, while the price of bitcoin is naturally changing, the pumps and dumps happen because of the buyers and sellers, there is no centralized that can be affected decentralized or bitcoin.

Inflation is bad for those who have their savings in fiat denominated assets. In case most of your assets are in the form of assets that are protected against inflation, then you don't need to worry. One issue that I have faced is while calculating the capital gains tax, most of the governments don't consider the loss from inflation. For example, I purchased a stock 10 years ago at $100. Now I am selling after 10 years , for $250. As per the calculation for tax, my net gain is $150 and I need to pay the capital gains tax on this amount. But if the inflation rate is high, then the net gain may be as little as $40 or $50 and the applicable tax maybe higher than this amount.

jostorres

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Quote from: adriaparcerisas on May 26, 2021, 05:14:49 AM

In my opinion there are very coherent things that are worth knowing. It is true that I personally disagree on some points but in general, I think it will be useful for everyone.

Well they are all assets for investments, but everyone here in bitcoin Forum will say bitcoin is their number one choice for sure, because if it wasn’t bitcoin they wouldn’t be here today. Apart from gold and bitcoin, I have not invested in any other asset that is listed there. And between bitcoin and gold, I am going to choose bitcoin for sure, because it has been favorite investment in recent years.

Although I have also started investing money in altcoins as well, but they are still in the same category with bitcoin in a case like this, they are all cryptocurrency. Good thing about investing in cryptocurrency is that if you know what you’re doing you can make good profit.

bitterguy28

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Quote from: jrrsparkles on June 08, 2021, 08:55:21 PM

If we need to answer this question based on the data we have then the only considerable asset is gold because no other thing have such a long history of successful increasing value and never lost its value against fiat. Maybe in future bitcoin can be the one as well but you have to wait for another 2490 years or more to get such guaranteed returns. Grin

Is bitcoin lose His Value against Fiat? as far as i remember that the price of bitcoin steps 1 $ it never fall down again since that moment.
Gold is indeed has its good increase since then but remember that this also losses momentum some time so there is no really permanent increasing to prove the healthy of the coins or gold.

Sithara007

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Quote from: jrrsparkles on June 08, 2021, 08:55:21 PM

If we need to answer this question based on the data we have then the only considerable asset is gold because no other thing have such a long history of successful increasing value and never lost its value against fiat. Maybe in future bitcoin can be the one as well but you have to wait for another 2490 years or more to get such guaranteed returns. Grin

Gold has lost its shine recently. Despite the huge risk of rising inflation rates, gold hasn't gone up as much as we would have liked. Now the prices have recovered to around $1900 per oz, but this is a long way down form the ATH of $2100 per oz that was reached almost one year ago. Many of us were expecting a sharp spike in gold prices, but that didn't realized. I still don't know why the demand for gold subsided during the 2020-21 period. Perhaps even the large scale investors were impacted by the COVID 19 pandemic and they had less liquid cash to spend on assets such as gold.

jrrsparkles

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If we need to answer this question based on the data we have then the only considerable asset is gold because no other thing have such a long history of successful increasing value and never lost its value against fiat. Maybe in future bitcoin can be the one as well but you have to wait for another 2490 years or more to get such guaranteed returns. Grin

Coroline

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I think the way to deal with inflation is with cryptocurrencies, because Bitcoin only has a limit of 21 million coins that can be mined. If calculated mathematically, Bitcoin will completely run out in the year 2140 which means more than 100 years from now.

The interesting thing is, crypto coins can be set not to be published so they are free from the supervision of government institutions. This is necessary because the level of inflation can also be influenced by the level of trust in the government. If the level of confidence decreases, the conventional exchange rate will also experience a decline in value.

Then, virtual coins are considered as one of the deflationary assets because they have resistance and flexibility. Virtual coins are no longer just a transaction tool between blocks, but have become the underlying of an exchange rate. Therefore, its value will not be easily shaken.

Coupled with the level of security in the Blockchain mechanism which is the core of virtual money. Because of this, almost all crypto coins have a much higher level of security. Transactions from sender to receiver will also be protected by network block encryption.

Nunoluck

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In my opinion, inflation only bad for people who only have fixed income such us employee. There are so many employee in this world so it makes inflation bad for the world. Gold can protect us from inflation but I am not sure that gold is really can give us significant profit. What I know is the price of gold is move in line with the price of commodities. My teacher said that actually companies want inflation to be happen so their product price will increase. I think it will be better for us to always invest some of our money. Today, it is very easy to do an investment, even we can invest only using app on our smartphone. But still, choosing the right place to invest is not easy. Maybe always diversify and learn the progress is good to improve our knowledge. I am lucky to know about bitcoin, for me it is a good investment choice and also safe as long as I buy it at right time or right price.

Vishnu.Reang

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Quote from: Karartma1 on June 08, 2021, 05:36:34 AM

Over the years, accumulating bitcoin at all price levels was the best thing I did to tackle inflation.
Now, the MSM are starting their narrative around inflation and trust me we need to expect troubles around the value of fiat money.
I believe there's gonna be a lot of turbulence at the end of the summer. Fasten your seat belt, and act accordingly: protect your wealth.

It is going to get worse. Back in 2020, the governments were thinking that the pandemic will be contained within a few months. So they took out these big spending plans and stimulus measures. The plan was to increase the revenue generation in 2021 and make up for what is lost in 2020. Unfortunately, now it looks as if 2021 will be even worse when compared to 2020. So obviously this means more government spending in the end, and more inflation for many more years to come.

justdimin

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Quote from: boumalo on June 08, 2021, 12:08:02 AM

Real estate is both an asset and a liability, you usually have property taxes, maintenance and risks. But if the rent offset the other costs, you can enjoy the asset appreciation with some work to rent and maintain the property.

A good but difficult way to protect against inflation is to have skills that will be in high demand.

A simple way to protect against inflation is to go to a hard discount store and buy a year worth of non perishable supply, you will save both because you buy in bulk and because you will pay today's price instead of the inflated price you would have paid later on.

There are places in the world where price of real estate drops instead of goes up, but those places are very very rare, when you look at it in the long term you always end up profiting from having it. However between the costs and taxes of keeping it, you are not going to profit from it as much as people imagine, it is going to be decent but it is not going to be insanely profitable, especially considering how much we are profiting from crypto right now.

For example, if I put my money in bitcoin and wait for 10 years, I am 100% sure that I would make more profit from that compared to buying a house and holding it for 10 years, so why would I go do that? People just want to "see" their investments, there are those people, people who buy gold and silver physically, people who buy houses or even cars which usually drops in value, so it is really a personal choice, not a financial one.

goldade

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The Standard Protocol - Solving Inflation

Inflation has been for a very long and it has, over the years, has reduced the value of money. $1 million today isn't worth as much as it was 10 years ago.
Accumulating gold and other precious metals is a good way to hedge against inflation. Real Estate also serves in a good way in avoiding inflation.
I, however, believe that the best way to avoid inflation is to accumulate as much bitcoin as possible. Bitcoin has been growing over the years and 1 btc, instead of decrease just the US dollars or any other currency, has grown so much to worth a lot than it was 10 years ago.

Karartma1

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Over the years, accumulating bitcoin at all price levels was the best thing I did to tackle inflation.
Now, the MSM are starting their narrative around inflation and trust me we need to expect troubles around the value of fiat money.
I believe there's gonna be a lot of turbulence at the end of the summer. Fasten your seat belt, and act accordingly: protect your wealth.

boumalo

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Real estate is both an asset and a liability, you usually have property taxes, maintenance and risks. But if the rent offset the other costs, you can enjoy the asset appreciation with some work to rent and maintain the property.

A good but difficult way to protect against inflation is to have skills that will be in high demand.

A simple way to protect against inflation is to go to a hard discount store and buy a year worth of non perishable supply, you will save both because you buy in bulk and because you will pay today's price instead of the inflated price you would have paid later on.

AndySt

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Quote from: fullhdpixel on June 07, 2021, 10:53:31 AM

Quote from: Leviathan.007 on June 06, 2021, 01:18:47 AM

More than anything, to stay away from inflation you need some knowledge all these investment options you mentioned above are good if you know how they work, these are in different markets with different price actions and price fluctuation. We all know in order to stay away from inflation and protect your funds you need to invest somewhere, if you get your own investment plan and be careful about risk management and money management any market you mentioned above can be profitable.

Someone who is into this crypto market can easily surpass inflation because the growth of Bitcoins is always more than the inflation even in the worst bear runs. I mean the yearly growth of Bitcoins is higher than the inflation rate in almost any country, I believe. As soon as you find a way where you earn higher than the inflation rate you will be safe.
If for example you invest under someone and they pay you 25% interest yearly, the inflation rate is for example 20% yearly then you easily earned 5% but that's the difficult part, to find such opportunities where you earn high but safe interests.
Investing in Bitcoins is a wise idea like I said but it always comes with a higher risk hence not the ideal choice yet.

In the case of the bitcoin story, you can not only lose more than from inflation, but also lose much more due to the volatility of the exchange rate Wink

A lot depends on the entry and exit points to the asset, because the spread is very large. Bitcoin is a very risky asset to invest in at this point in time, and conservative investors should stay away and wait for the moment when the bitcoin market will pass a certain stage of maturity. Until recently,it seemed that such a stage had already arrived, but then there was a crazy growth, which was replaced by a crazy fall after a couple of bad news.

just_Alice

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Quote from: fiulpro on June 06, 2021, 12:26:30 PM

I do think we can add one more point here:

1. Education
No matter where you are and what are the odds against you, you will be able to do well if you have education, experience and at the same time sharp mind.
These skill sets are way more important than gold or any other investments. You can sell your gold or Bitcoins for actually investing in yourself and that will all be worth it at the end of the day.

Other than that I think those points are really cool and we can also establish that Bitcoins have increased in price at such an uneventful pandemic and the people who owned it did win a big time. Therefore we can easily infer it might help you in the future but should never disregard the word "might".

Education is very important in terms of finding a stable job, and that's about it, but, sadly, that won't save us from inflation, because all payments are in fiat. That's why it's important to invest in stable assets.

In addition, if someone is thinking of starting a business project - even then education is not that important, because the first thing you're going to need is networking, connections, presentation and persuasion skills, motivation and commitment, and, of course, idea. All of that doesn't necessarily require formal education and having a personal business is a way better source (when successful) of income, than a regular job.

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