How to deal with Inflation

Inflation is something that everyone is affected and bo matter what part of world you live in. It is everywhere and its like some countries are infected badly and some countries have lesser inflation rate but no country is in the world without inflation. Now it is also important to understand what is inflation and how it work. In simple words inflation is a process that indicate the price increase over the period of time but I did some Google search to figure out the exact definition.

What is inflation

Inflation is the rate at which prices increase over a period of time. It's a broad measure, such as the overall increase in prices or the increase in the cost of living in a country

Price increase for goods and services is common in the world and we just can't expect the same price for a long time because inflation is there and because of that it is imperative that prices go up. This is connected with us and if you observe it closely then you will notice that prices for some daily needs items keep on increasing time to time and this is our expenses are increased that can be considered as part of the inflation. Every government publish the inflation number for a country and this is how we can measure the overall inflation with sometimes goes up and sometimes stay stable but in most of the cases this number is most likely does not go down. Maybe once in a while it can show some reduction on the number but that is not common and I don't think it happens frequently.

How to deal with inflation

Technically we can't manage or control inflation because it's not in our hands and it's managed by the government. The kind of policies government makes result in inflation. Mostly after the election an spike on inflation is seen and it's because the government try to get more money after more expenses in election process.

I think there is a way that we can use to deal with inflation and it is just the investment. If we invest money in the right instrument offering a descent interest rate then we can't deal with ongoing inflation. There is an example that if you keep your money idle with you without investing anywhere then you're not going growing your money instead it is losing its value. This is why it is never recommended to keep the money in the bank account even because that does not pay a good interest rate and it is very low that is not even able to manage the rate of inflation. Some countries have very little interest rate on the savings bank account which is not even one or two percent per annum however some countries have got pretty good interest rate which can very between 3 to 4%. But over all this percentage is also not capable of dealing with the inflation rate because that is mostly only higher side in most of the countries.

Bitcoin can be a great solution to deal with inflation because the appreciation rate is high and Bitcoin also do not depreciate like Fiat currency. Fiat currency is highly affected by the inflation rate and we just can't do anything because this system is designed in such a way that citizens have no power to control it how yours through the alternate process they can surely figure out the solution but the problem remain same.

I invest on various instruments including mutual funds some index funds and also on Crypto and this is how I tried to reduce inflation impact on my money management. The good thing about crypto is that it is free from inflation and mutual funds are affected but because the apr is much better than the traditional investment and this is why there is least effect on such instruments. The simple and the best solution can be to overcome this problem is to follow the investment habit and make sure that you are investing or something which is more interest than inflation rate then only you will be able to cover the gap and grow your wealth else this is also not a solution.

Thank you

Posted Using InLeo Alpha