Questions about inflation and financial success | On Financial Success

Q: Where’s the best place to protect my money from inflation?

A: Although the stock market has outpaced inflation in the past, the stock market’s returns are too volatile to only invest in the market.

In the past, investors had few options for shelter. Today, however, the government sells TIPS and Series I bonds which compensate investors for inflation (ironically, inflation directly caused by the government).

Although you can directly invest in these government bonds, most people would be better off investing in an inflation protected mutual fund like Vanguard’s Inflation-Protected Securities (VIPSX).

Q: You write about getting ahead as if it’s so easy. Most of us will never end up rich because the deck is stacked against us. -Skeptical

A: I don’t mean to make building wealth sound easy. It is simple, but far from easy. Spending less than we earn is a simple concept, but you won’t find many people who enjoy spending less, so they can invest more.

And while the majority of the world’s population still labors under oppressive governments and has little capital with which to work with, if you’re reading this, the odds are you live somewhere where freedom and opportunity abounds. You just need to set your mind to it.

That’s not to say that we’ll all end up rich. After all, rich is a relative term. You might not be rich compared to a multi-millionaire, but even the poorest people in the western world enjoy luxuries unimaginable to royalty just one century ago.

If you’re still skeptical, check out some of the personal finance and wealth building blogs where average, regular people are detailing their journeys to their own financial success.

A few blogs worth checking out: Frugal Dad, Mrs Micah, MoneyNing, Moolanomy, My Investing Blog, plonkee money, & The Wisdom Journal.

If you have a financial question, contact me to have it answered on the site. Please be sure to state whether your name can be listed, or if you’d like to remain anonymous.

Photo by Stefan