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Every year, we’re faced with a decline of purchasing power because of progressive rise in the price of goods and services in the economy. In economics, this is referred to as inflation. Apparently, the inflation rate in some countries has been substantially more than that of other nations, causing many people to look for ways to safeguard their wealth from the extreme effects of price changes.
One of the many countries that face such economic shifts is India. Let’s take a look at how the country’s economy performs.
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A look at India’s current economic status
The benchmark inflation rate of India, measured by the Consumer Price Index (CPI) increased to 5.59% year-on-year in December 2021. This is according to the data released by the Ministry of Statistics and Programme Implementation (MOSPI). The inflation rate saw a significant rise from 4.91 of the previous month, but below market expectations of 5.80%.
As per the report from MOSPI, India’s current retail price inflation of 5.59% was the highest rate since July 2021. Food, clothing, and footwear are among the products that saw a rapid increase in prices, while housing; pan, tobacco and alcohol; and fuel and light witnessed a slower inflation growth.
Undeniably, this progressive increase in prices of goods and services doesn’t always positively affect everyone. When the situation gets even more serious—or worse—your hard-earned money could lose its value without warning. That’s why it’s important to find a suitable and practical way to protect your wealth.
Five wealth preservation strategies for you to try
If you’re among those folks who are in search of different routes to take, we’ve listed some of the ways you can try to safeguard your wealth from inflation.
Buy government bonds or company stocks
One of the many ways to protect your wealth is by engaging in stocks and bonds. When you buy stocks, you’re purchasing a small part of the company or “shares.” The more shares you buy, the more part of the company you own.
When buying stocks, you must think of the long-term. If the company where you bought stocks from performs well after a few years, your share’s value will also grow just like the company. You can try searching for high-performance stocks from good-standing companies in telecommunications, energy, technology, and a lot more.
On the other hand, bonds are like a loan from you to a government. Unlike stocks, bonds don’t involve equity or shares that you can buy. To make it even easier to understand, you can think of it as funds that the government owes you. The loaner will pay interest on the loan for a certain period until the full amount they borrowed is paid back.
Convert cash into cryptocurrencies
Another option you can try is getting your hands on cryptocurrencies. With the emergence of different marketplaces today, you can easily convert your wealth by buying Ethereum (ETH), Bitcoin (BTC), Tether (USDT), and other cryptocurrencies. Peer-to-peer (P2P) marketplaces like Paxful offer you over 350 ways to convert your money into crypto easily and securely.
Digital currencies are considered to be one of the riskier options to preserve wealth because of their volatile nature. While their prices can also dramatically drop, they can also increase in value in no time, depending on how the market performs.
Refinance loans
This is often considered by borrowers who want to respond to the shifting economic situations. Let’s say you have an existing loan and the interest rate increases because of inflation. In that case, you might end up paying more. Refinancing loans involves making favorable changes to the interest rate, payment schedule, and other terms of an existing loan. Among the consumer loans that can be applied to refinancing include car loans, student loans, and mortgage loans.
Purchase ounces of gold
Gold and other precious metals have been among the long-standing assets for wealth preservation globally. While many assets and investment properties have sprung up in the past couple of years, gold is still considered one of the most reliable assets to safeguard your wealth against inflation.
As per JM Bullion charts, an ounce of gold is selling at over 1,800 USD at the time of writing. On the other hand, a gram of gold sells at around 58 USD, while a kilogram sells at over 58,600 USD. These divisions offer you many options regarding the amount of gold you need to get started.
Invest in real estate
Apart from gold, real estate is another option you can try your hands on if you’re looking to protect your wealth. Unlike vehicles and other assets that diminish in value over time, real estate often shoots up in price, especially those situated in prime locations. According to a recent report from Bajaj Finserv, notable places to buy real estate in India include Bengaluru, Pune, Kolkata, Hyderabad, and Chennai.
There’s no better time than now
Economic swings can happen anytime, which is why it’s better to be prepared when that time arrives. Protecting your wealth isn’t necessarily an easy job, but it doesn’t always have to be complicated. All it takes is a little time for preparation and a plan to execute when tough times pay their visit. Have you decided on the route you’ll take to prevent your money from losing its value? Go over our list above and try which one suits you best.
