With such a strong focus in the media on real estate today, have you ever asked yourself, “Why real estate is getting MORE expensive today than yesterday?”.
If this is the question you are asking yourself, then you are asking the WRONG question.
The REAL question you need to ask is “why does my money only allow me to buy LESS of a house today?”. Think about this for a second. If you had $1 in your hand today, it is still $1 tomorrow. You know it is still $1 because the currency that you utilize denotes this fact. So why is that same $1 allowing you to buy FEWER goods and services for tomorrow? There can be many economic reasons but it all boils down to a single common denominator – INFLATION.
There is much hype about inflation today so let’s have a quick chat about it. Inflation is one of those topics that are either misunderstood or completely ignored by the general public.
Your money (dollars) has a fixed denomination to it. However, the VALUE of the goods and services around you is constantly changing (mostly increasing). Imagine inflation is like a clock. The seconds’ hand on the clock continually moves along advancing time (VALUE) regardless of what you do with your money. When you’re ready to deploy your money, inflation would have taken some of your purchasing power away as the VALUE of the goods and services you now require has increased, which is reflected in its PRICE. If your money had been static, perhaps sitting in a bank account or under your mattress, then your FIXED denominated money will afford you FEWER goods and services, as VALUE (represented by price) have GONE UP. This is WHY your money is buying you LESS of a house today than yesterday. The house is NOT getting more expensive, although it feels like it. Your money is worth LESS, so you’ll need more of it to acquire the same amount of the commodities or goods and services you seek.
When you consider money in this context, you will begin to understand why inflation is a big THREAT to your savings and personal wealth. Your only defence against inflation is INVESTING to GROW your money in order to stay AHEAD of inflation. Investing should be your goal, not savings. Investing is a necessity – at a minimum – to protect and preserve one’s wealth. When planned and executed properly, investing can propel and advance you financially to ease the effects of inflation.
I hope this short explanation on the topic encourages you to reflect on your own personal financial portfolio and how best to protect it against inflation.
Inflation doesn’t have to be all doom & gloom. There’s a strategy that you can use to benefit from inflation to build your wealth, our team works closely with financial planners who know best how to implement these strategies and ensure that our clients are able to utilize their wealth to their best advantage.
Happy Investing!
Angela Calla is an 18-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages.
In August of 2020, at the young age of 37, Angela surpassed $1 Billion dollars in funded personal mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.
Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.
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