Inflation went up 6.8% since last year. Here’s what you can do to protect yourself and lessen the effects.
How’s it going everybody this is peter bush inflation has reached 6.8 percent and i think it’s on everyone’s mind on how to avoid paying this this video is brought to you by weeble why only take three free shares of stock when you can get five free shares of stock now weeble is giving away one free share of stock just for signing up that’s valued between three and
Three hundred dollars you’ll get another four free shares of stock value between 32 and eight thousand dollars just for signing up and depositing any amount even a penny in addition you can get five free dollars worth of crypto just for trading one dollar worth of cryptos this promotion is valid between december 10th and december 23rd so get it before this expires
Check out my referral link down in the video description below the current inflation is 6.8 percent the month before six point two percent and the month before that five point four percent keep in mind that six point eight percent is not an increase from last month it’s an increase from one year ago so whatever you paid one year ago let’s say it’s a hundred dollars
Today you’re going to have to pay 106 dollars and 80 cents whenever we look at inflation data i always want to look at real income that goes with it so let’s take a look at this chart and you’ll see what i mean real mean household income cumulative growth by quintile and top five percent when they say quintile is just all of the entire population divided into fifths
So the bottom quintile is the bottom 20 percent of earners the next one is the next 20 and so on and so forth the key takeaway here is that for the top earners the real wage roughly stays about the same and for the bottom half of the earners it roughly went down a little bit although this data is for 2016 it generally holds true for now and going forward the next
Five or ten years mainly because the rich are getting richer and poor or getting poorer so in the end you might see your wages increase but inflation is keeping up right along with it so therefore you’re not really gaining a raise you’re just getting your wages readjusted for inflation this is holding true for the top 60 of the earner you can see the percentage
Change is zero but for the fourth quintile and the bottom quintile it peaked around the year 2000 and currently it sits at minus 2.4 percent decrease in real wages for the bottom quintile it peaked around 1999 and then percentage change is minus 9.4 percent this article is pretty interesting because i thought that it was pretty typical for a profit earning company
To not want to pay its employees more google exec tell employees they won’t raise pay company-wide to match inflation google employees they’re smart people they know inflation is going up at 6.8 percent and then they’re requesting their managers to give them a raise in accordance to inflation and the fact that they’re refusing this is just typical because they don’t
Really have to at the end of the day if you want to get paid more well you know go find a better job keep in mind though google employees are probably the top quintile of earners as long as you earn 213 000 or more okay maybe second quintile and then the top quintile why pay more if you’re not forced to a business main goal is to make more money for its shareholders
Not to make employees happy by helping you out with inflation by refusing a company-wide pay increase they can keep the employees that are too lazy or does not really want to move how do you force a 6.8 percent increase you go look for a new job get an offer letter and you show this letter to your manager there are a couple ways to avoid inflation and if you have
A lot of cash sitting around your problem becomes a little bit bigger because that amount of money is essentially being inflated away if you don’t have that much cash laying around it’s actually much easier because all you have to do is just switch job you then earn today’s money and then you don’t have to worry about inflation at all this actually only works for
The top 60 earners because if you’re the bottom 40 well even if you switch jobs the wages are gonna still stay pretty low and you’re not going to be able to beat inflation if you have a lot of cash and because inflation is going up interest rate is really low you may be incentivized to invest in the stock market now the stock market is not guaranteed and you have
To take on some amount of risk and you also have to make more than 6.8 percent in order to beat inflation another option is to invest what’s called tips treasury inflation protected securities now this may or may not be familiar with you but let’s take a look at what it really does tips provide a protection against inflation the principle of a tips increases with
Inflation and decreases with deflation as measured by the cpi when tips matures you are paid the adjusted principal or original personable whichever is greater tips may pay interest twice a year at a fixed rate the rate is applied to the adjusted principal meaning if your principal went up due to inflation they’re going to pay your interest based on that bigger
Amount the principal interest payments rise with inflation and fall with deflation so at least you are guaranteed the original amount that you put in you can buy tips from us in treasurydirect by the way treasurydirect.gov is not a sponsor this is a government website that you go to and buy these tips things you can also buy tips through a bank or a broker you
Can also hold the tips until it matures or sell it before it matures a few more important things here minimum term of ownership is 45 days interest income and growth in the principal are exempt from state and local income taxes but you do have to pay federal income taxes another way to avoid inflation is just to have real property as inflation goes up you have to
Pay more for real property like houses or anything that is physical they tend to generally increase in price as inflation goes up the last way to avoid inflation and may not be so popular with everyone is just to embrace minimalism ever since i did so and kind of got forced to eat vegan because of my own health issues i no longer need to buy as much meat meat has
Increased 24 in one year and i have to admit i probably bought like 20 40 of meat in the entire year in general even though you reduce the amount of meat that you buy you do increase the purchase of other fruits and vegetables and other kinds of proteins like beans or tofu but generally your grocery bill is definitely going to reduce by more than 50 percent if you
Decide to go this route i know being a vegan is not for everyone and you know when i was a meat eater i actually profusely refused to eat only a salad i would complain non-stop if i had to eat just one meal of salad so i’ve been there gasoline is up 51 i don’t pay for gasoline buy an electric car i know it’s expensive but if you happen to have an electric car well
You are largely unaffected by this gasoline inflation who cares don’t buy stuff stuff has gone up if you don’t buy material things you don’t actually need to buy that much material things appliances are up 15 i actually keep on fixing my appliance they’re like 10 years old or more and when there’s something broken in it i just fix it myself so i don’t need to pay
This inflation adjusted price for appliances i know in the end people still need to buy a certain low level number of things sometimes things really do break and you cannot no matter what fix it so the idea here really is to have less frequent upgrades fix the stuff that you already own and use it until it’s completely worn out another side benefit for not buying
Anything new is that you do not have to pay sales tax anymore over here in california they go for around seven to ten percent sales tax hotel went up 26 from last year car rentals went up 39 i know this is not going to be a popular thing to say either because people love to travel people love international travel it kind of broadens your mind to see new things and
I i agree you know you need some amount of travel to just kind of take in new ideas new sites and scenes new cultures new foods over the last year of course i didn’t do any international travel i did a little bit of local travel within california itself but the idea here is to travel less if you travel less then you don’t have to pay for hotels or car rentals that
Went up so if you do all these things you might be able to at least minimize effects of inflation thanks for watching this video don’t forget to give me a like and subscribe for more thanks for watching you
Transcribed from video
How to Protect Against Inflation By BeatTheBush
