Inflation is here, spend now worry later

“Diesel could rise to N1,500 per litre”, was a screaming headline across several online media platforms including Nairametrics during the week. Marketers pointed to rising commodity prices, difficulty to access forex and distribution bottlenecks as major concerns.

These are just one of the fallouts of that evil economic phenomenon called inflation. Inflation is the number one enemy in the world today and that is because it is killing the financial aspirations of countries, businesses, employees, and anyone who saves, invests, or spends money.

Earlier this week, the National Bureau of Statistics reported that Nigeria’s inflation rate for the month of May 2022 galloped to 17.7%, the highest in about 11 months. Across the world, the same appears to be the case. From the United States to Europe and Asia inflation is ravaging nations forcing central banks of most countries to raise interest rates at a pace not seen in decades.

While the central banks continue to grapple with taming high inflation, investors are also having to deal with a crashing stock market, catering to the cryptocurrency market, and a generally grim view of investing across all spectrums. The purchasing powers of individuals and retail investors are being decimated and it appears there is no end in sight, at least in the short to medium term. This is a sticky inflation which means it is not going anywhere soon.

So, what do we need to do to avoid getting your finances ravaged by inflation? Some of the cost-effective ways of fighting inflation are owning what economists refer to as “inflation-proof assets” such as real estate, dollar-earning assets or simply selling “Giffen Goods” which are low-income goods that record higher demand despite price increases. But while these investable assets address investments in items that are inflation-proof, there is a different approach to dealing with spending on goods and services that are frequently impacted by inflation.

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