Warren Buffett is the sixth richest person in the world – behind Elon Musk, Bernard Arnault, Jeff Bezos, Larry Ellison and Bill Gates – with an estimated net worth of around $118 billion Bloomberg Billionaires Index.
Unlike some of his billionaire contemporaries, the Berkshire Hathaway CEO seems to enjoy living the simple life and his strategies for it smart investing and accumulating wealth doesn't sound overly complicated—even in times of inflation.
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Although very few people share Buffett's investing expertise, the billionaire believes it's still possible Protect yourself from inflation if you follow one of its core philosophies.
“The best thing you can do is be exceptionally good at something,” he said at Berkshire Hathaway last year Annual general meeting of shareholders. “[People] will give you something of what they produce in exchange for what you supply.”
Skills are inflation-proof
According to Buffett, you can mitigate the effects of inflation by focusing on continuous self-improvement and staying ahead in your chosen field.
“Whatever skills you have, they cannot be taken from you. They can't be blown away from you,” he said. “By far the best investment is anything that self-develops and it's not taxed at all.”
That could mean obtain a university degreeTake training, work with a mentor, or just read more and learn about different cultures, languages, innovations, etc.
The 92-year-old says there's no need to bother looking for skills that don't serve you well, especially in these tough inflationary times. Instead, he says, aim to do everyday things exceptionally well. For example, he believes that strong communication is one of the most important skills of all.
“An easy way to become worth at least 50% more than you are now… is to improve your communication skills,” he previously said said in a video posted on LinkedIn.
“If you can't communicate, it's like winking at a girl in the dark – nothing happens. You can have all the intelligence in the world, but you also have to be able to transmit it, and transmission is communication.”
Of course, surviving in inflationary times requires something more than strong communication skills. Once you've invested in yourself, you might want to invest in some of these other popular inflation hedges.
Gold is an excellent hedge against inflation as its purchasing power has remained stable over time.
“The value of a dollar can be weakened by inflation, but gold offers you an advantage to counteract this loss of purchasing power,” William Bevins, CFP, CTFA, said CBS News.
You can invest directly in gold Buy it in its physical formeither as bars, coins or jewellery.
Invest apps can also help you invest in the commodity by buying stocks of gold mining companies on the stock exchange. Those looking for a more diverse exposure can also invest in gold exchange-traded funds.
You might also want to think about it Opening a Gold IRAan individual retirement account that allows you to invest in precious metals in physical form, such as coins, instead of stocks, mutual funds, and other traditional investments.
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Real estate is also touted as a proven hedge against inflation.
If you want your real estate portfolio to grow beyond your own home, you can invest in a residential property Real Estate Investment Trust (REIT). REITs are publicly traded. They collect rent from tenants and pass that rent on to shareholders in the form of dividends.
Also consider using one Online crowdfunding platform. These allow investors to pool their money to buy property (or an interest in property) as a group.
If you don't want the pressure to make investment decisions yourself, Invest apps And online platforms can help you invest in diversified real estate portfolios to maximize your returns while keeping your fees low.
People have enjoyed wine for thousands of years. While most wine collects for consumption rather than investment, bottles of fine wine become scarcer and potentially more valuable over time.
The wine fortune has enjoyed itself constantly Double digit growth Over the past 10 years, it has outperformed inflation while outperforming many popular asset classes.
You can invest in wine by buying your own bottles, but remember you need a place to store them properly. Home wine cellars can cost tens of thousands of dollars. Failure to store the bottle at the correct temperature or humidity levels can result in damage.
If you do not have the time and space to curate and maintain your own wine portfolio, a Wine Investment Platform can help you choose, store and insure your cylinders. It even lets you know when is the best time to sell.
Unless you're particularly rich, you might think that investing in the fine arts of artists like Andy Warhol, Banksy or Pablo Picasso would be out of reach – but today it exists Online platforms for art investment where you can grab a piece of the multi-billion dollar industry.
With these platforms, you can bypass many of the downsides of investing in physical artworks. For example, you don't have to browse galleries to find what's right for you, or deal with the logistics of shipping, handling, and securing a temperature-controlled storage space.
Keep in mind that these platforms are still quite new, exclusive and usually only open to accredited investors.
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This article is for informational purposes only and should not be taken as advice. The provision is made without any guarantee.