Inflation: What is it, and what does it mean for beginning investors?

Put simply, inflation is when the buying power of money erodes over time--we need more dollars to buy the things we need and want. Because of inflation, the prices of food, gas, houses and most everything goes up over the years -- bummer!

Economist Milton Freidman said, “Inflation is always and everywhere a monetary phenomenon.” This means when the government injects too much money into the economy, prices tend to rise and inflation occurs.

Since the financial crisis of 2008 through today, the government has been injecting billions of dollars into the financial system to stimulate the economy. When Covid-19 lockdowns halted the economy, all that cash lay mostly dormant.

Now, however, the economy is bolting ahead. All those dollars are chasing a reignited supply chain...and viola...inflation is occurring. Is it short-term? Long-term? No one really knows.

So what can investors do to cope with inflation, or -- even better -- actually profit from it?

While inflation tends to erode the value of cash, it enhances the value of assets. Real estate, gold, and collectables like art and jewelry increase in value in an inflationary environment.

The kind of premier, commercial real estate RealyInvest offers can do very well in such an environment. With RealyInvest you can buy share interests in land and buildings leased to brands you know and use everyday, like Chick-fil-A, FedEx and Starbucks. Pretty cool, right?

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