Inflation Is Rising - Do THIS To Protect Your Money

This is what I'm doing with my money to protect against inflation and what you should do too.

Ryan Pineda

November 30, 2021

According to Jack Dorsey, Hyperinflation is coming. He's not the only one who thinks so. There are investors everywhere who are saying it’s going to happen at some point. Pretty much the only people who don't believe this will happen is the Fed. They have consistently said that these rising prices are transitory and that they are going to stabilize here at some point. Well, it doesn't take a genius to know that that's probably not the truth. When you just look around at what's going on in the world. In some places, gas prices are hitting as high as $7 a gallon. The used car market is selling for more than what new cars are selling for.

Other goods and services are all experiencing the same phenomenon so it's getting pretty serious. I want to give you my thoughts on what's going on with inflation and how I plan to thrive during it. The reason that we've gotten to this inflationary state is that the government has printed trillions of dollars since the pandemic and the government will tell you they had to print it because of everything going on and that it was going to be transitory. I might believe that if they were going to stop printing money, but the reality is I would not make that bet.

My guess is they're going to continue to print money at crazy levels. One of my favorite books, The Price of Tomorrow by Jeff Booth actually predicted this would happen well before the pandemic. I really liked that book because it opened my eyes on what was truly happening in the world with our money system. With technology increasing at an exponential rate, it’s not making things cost more money. Tech is actually making things cost less. If you think about when the first cell phone came out, it cost thousands of dollars. But over time as tech got better and as more competitors entered the market space, the cost of a cell phone decreased significantly. 

The same thing happened with the plasma TVs. Initially they cost thousands of dollars and it was a luxury item for most people. Now you can go get a really good TV for a few hundred dollars. An example of services, where tech is making things cheaper and better is with Airbnb and Turo. Before you could only stay at a hotel in one little room and it was really costly. Now you can rent out an entire house for less than the price of that hotel room and go bring a bunch of people with you and have a better experience. Turo has done the same thing in the rental car market. If you try and go get a rental car with Hertz or Avis right now, the prices are insane. But if you go and try and rent a car on Turo, it's significantly less and you can get a better car.

So the whole point of the book is that tech is decreasing the prices while also increasing the value, those different services and products. It's a really cool thing for us as consumers, but it's a bad thing for the government. You see the government is incentivized to push inflation. If the value of your home is constantly going up, it forces you to do many things like sell it or refinance so that you can get that money back and go spend it in the economy. If you own stocks and they print more money and it flows into those stocks. Now the value of your stocks go up and you're going to go sell or borrow against them and spend more money. That's why a small increase in inflation each year is a good thing that the government wants.

The moment we start having deflation people act in ways that are not good for the economy. If the value of your house is going down, you're not able to refinance or sell it and go spend money. You have to hold the house. If you know that your assets values are decreasing, you're going to be less likely to spend money, you're going to be more likely to save instead. The government doesn't want you to save money because if you're saving money, you're not spending it on the economy. If you're not buying my products or somebody else's products, then we're not able to go create jobs and innovate new things. So by pushing for inflation, everyone wins. Well, actually I shouldn't say everybody because people lose. If they're not putting their money to work in some type of assets, if your money is sitting in the bank making 0.01%, you are losing money today, and  every time the government prints more.

The money printing is not going to stop. In fact, what Jeff predicted in that book was that the government was going to have to print exponential amounts of money to combat all the deflationary pressure that tech is creating. That's exactly what we're seeing. They are printing more than ever in order to keep things moving along this path. Now, I think we all agree that this path will end at some point. There's no way we can continue to just push prices up in order to keep things rolling. That leads to the two most common questions I get, “when is it going to crash and what am I going to do when it does?”

I've got a lot of debt in real estate right now, and that is my biggest liability if something were to crash. I'll be honest with you as it stands right now, I'm trying to buy even more. As I've watched all this inflation and money printing play out for the last year and a half, I've noticed that it has been a huge benefit to me. In years past our average house flip was around $20,000, which was pretty good. This year we're well over $50,000 in average profit.

It's not because we've all of a sudden gotten so much better or we're getting better deals. The reality is prices are appreciating so fast due to all these different government policies that it is making our flips that much better. So obviously for me, I'm trying to buy as many flips as possible because I believe the market is going to still continue to go up as we go into 2022. I'm not the only one who believes this. There've been many articles with people projecting as high as 10% to 20% increases. So if you're sitting on the sidelines waiting for a crash, you're probably going to be sitting even longer. 

Here's another factor that I always tell people who ask me about a potential crash. One thing to think about is the money has already been printed and it is circulating out in the world. So if something does happen, the money is just going to flow from one person to another. It's not like it's going to just catch on fire and totally disappear. So once you have all of this money, circulating prices are naturally just going to go up or stay high. So in the event of a crash, somebody's gotta be prepared to take the money wherever it's going to flow. Honestly, I believe that one of the places is going to continue to flow is real estate. It's not just because I'm personally buying it, but I'm watching a lot of people who are much smarter than me do the same. When you see companies like BlackRock and Blackstone buying up all the real estate, you've got to take notice.

I'm going to follow exactly what the big hedge funds are doing because they're a lot smarter than me. But on top of that, I'm fortunate enough to have a unique skill set in real estate. 

I will say there's another hedge against inflation that I'm excited about. I do believe that cryptocurrency is here to stay and it's going to continue to become enormous. Now, for those of you who've been following me for a while, then you know that I sold all my crypto earlier this year when everything tanked and it hurts to admit that I had such paper hands because it cost me over a million dollars. I do believe in the technology overall. I really like Bitcoin, I like some of these other alt coins coming up and I'm really excited about the NFT space.

The last thing I want to hold during inflation are US dollars because they are being devalued every single day, that money is printed. You want to own assets like real estate, crypto or even stock. I'd even buy gold over holding US dollars. As I look towards the future and what the government is doing, my main plan is to buy a lot of real estate and start doing some more things in crypto. 

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