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As Americans watched their buying power erode through 2021 and 2022, with inflation peaking at a 40-year high of 9.1% in June 2022, pundits offered a long list of factors they blamed for causing the rise in the cost of goods: increased consumer spending, rising labor costs, supply chain disruptions and monetary and fiscal policies.
However, if the late Nobel Prize-winning economist Milton Friedman, renowned for his work on monetary policy and free-market principles, was still alive, he’d certainly have a more straightforward explanation for the phenomenon: “Inflation is made in Washington because only Washington can create money, and any other attribution to other groups of inflation is wrong,” Friedman famously stated.
“Consumers don’t produce it. Producers don’t produce it. The trade unions don’t produce it. Foreign sheiks don’t produce it. Oil imports don’t produce it. What produces it is too much government spending and too much government creation of money and nothing else.”
Although Friedman (who died in 2006) made these remarks decades ago, they seem to be striking a chord once again today. Sen. Rand Paul posted a clip of this speech on X in early October 2024, which garnered more than 51 million views.
The post also caught the eye of Tesla CEO Elon Musk, who reposted it, along with a “100%” emoji to signal his full agreement with Friedman’s message.
High prices have been throttling Americans’ budgets for years now. The good news? Musk has already shared some strategies for navigating these inflationary pressures.
In March 2022, just before U.S. inflation reached a decades-high peak, Musk advised: “It is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high.”
Let’s take a closer look at these assets.
Real estate is a well-known hedge against inflation. As the cost of raw materials and labor rises, new properties become more expensive to build, which then drives up the price of existing real estate.
However, well-chosen properties provide more than just price appreciation. They also come with a steady stream of rental income — which also typically goes up when prices do.
Over the last five years, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has surged by more than 50%.
Of course, that also means properties don’t come cheap these days — especially when you factor in today’s still-high mortgage rates.
But you don’t need to buy a house to start investing in real estate. Crowdfunding platforms like Arrived have made it easier for average Americans to invest in rental properties without the need for a hefty down payment or the burden of property management.
With Arrived, you can invest in shares of rental homes without worrying about mowing lawns, fixing leaky faucets, or handling difficult tenants. The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase, and then sit back as you start receiving rental income deposits from your investment.
Another option is Mogul, a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
Equities offer another powerful tool for combating inflation — something billionaires like Musk understand well.
In January, the non-profit Oxfam reported that the world’s billionaires have become $3.3 trillion wealthier than they were in 2020, with their wealth increasing at a rate three times faster than that of inflation.
For many of those billionaires, much of their wealth is linked to the companies they founded or currently manage. As inflation drives up prices, businesses that can successfully pass these costs on to consumers through higher prices can maintain or even grow their profit margins. This, in turn, can lead to increased earnings and potentially higher stock prices.
But you don’t have to be in the billionaires’ club to reap some of those benefits yourself. Trading platforms like Public allow everyday investors to capitalize on the stock market by investing in fractional shares for as little as $10. You can easily pack your portfolio with your favorite companies, with zero commissions.
Of course, not all stocks are created equal. To make informed decisions, investors can use research tools like Moby, which provide expert analysis and market insights, helping users optimize their portfolios.
Ultimately, everyone’s financial situation is unique, with different obligations, risk tolerance, and investment goals. If you’re still unsure about navigating the market on your own, consulting a financial professional is always an option. That’s where Advisor.com comes in.
Advisor.com is an online platform that connects you with vetted financial advisors to make the process of finding the right advice easier.
Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your retirement goals.
