Warren Buffett just sounded the alarm on inflation — here are 8 ways to be ready

Warren Buffett just raised the alarm - here are 8 ways to be ready
To worry or not to worry. That is the question - at least as far as inflation is concerned.
Following an annual rate of 1.4% in January and 1.7% in February, inflation rose to 2.6% in March, causing some experts, including the Omaha Oracle itself, to sound the alarm about rising prices.
"We're seeing significant inflation," Warren Buffett told attendees at Berkshire Hathaway's annual general meeting last week. "We're raising prices. People are raising prices for us, and it's accepted."
Ordinary Americans are looking for "inflation" online more often than they have been in more than a decade, according to data from Deutsche Bank strategist Jim Reid.
Here are eight strategies that can help you worry less about the impact of inflation on your finances, or even stay ahead of the curve when inflation rises.
1. Increase your profitability
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When inflation occurs, you can think of it in two basic ways: first, prices rise; Another reason is that the US dollar is depreciating. Either way, making more money is a pretty safe solution.
If you are currently unemployed or struggling with reduced hours, consider using the extra time you have to hone your skills and position yourself for a higher paycheck.
You can use these skills to start a freelance sideline or read the latest job postings when you think it's time to change jobs with a higher salary and more opportunities for advancement.
2. Play the stock market
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Stocks have significantly outperformed inflation in the past, making them one of the strongest hedges against it.
You can take advantage of inflation by investing in sectors of the economy that can benefit from rising prices such as food, technology, building materials or energy. Listed companies like consumer goods giant Procter & Gamble, burger chain Shake Shack, and medical product maker McKesson have either raised prices or are planning to raise prices later this year.
There are a number of innovative apps available to help you invest in the market. Weigh the pros and cons of each one, find the right one for your financial needs, and play along.
3. Become valuable
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Fears of inflation have always been good for hard assets like gold and silver. Both raw materials have developed well over the past five years. The gold value rose by 44% during this period and the silver value by an even healthier 54%.
You can hold precious metals directly by buying coins or bars, or you can take a hands-off approach and invest in ETFs that actually hold gold and silver. There is a very popular app that can help you with this.
4. Take advantage of the scorching real estate market
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Real estate has proven to be one of the most reliable long term investment games you can play.
The US housing market has been on a serious uptrend since about the fourth quarter of 2011, when the median sales price was just over $ 221,000. By the end of the first quarter of 2021, it had risen to $ 347,500.
When you have the funds to buy a home, compare mortgage rates today and get the best interest rate possible. The lowest mortgage rates usually go to the borrowers with the highest credit scores. So do what you can to move up a few notches.
If buying a home is not within your budget, you can invest in real estate without buying your own by putting your money in a real estate investment trust or REIT.
5. Adjustable prices are not your friend
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When inflation rises, so do interest rates. If you have floating-rate debt, such as B. a credit card balance or a home equity line of credit, an increase in inflation leads to higher interest expenses.
This is especially true for mortgages. If you have a variable rate mortgage, you may want to speak to your lender about refinancing and opting for a fixed rate mortgage. This guarantees that you will be paying the same interest rate until you decide to sell your home - or refinance it at an even lower interest rate.
6. Bring your debt down
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If you have a significant amount of debt but a mortgage or interest rate swap is not right for you, options are still available to you to reduce the amount of interest you pay your creditors.
One proven way to lower the cost of your debt is to take out a lower-interest debt consolidation loan. When you have all of your high-yield debt bundled into a single loan, it is much easier to budget a single payment to one lender than multiple ones.
7. Reduce any remaining costs that you can
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You've probably noticed by now that most of the suggestions are spending money here. But cost reductions are also an excellent hedge against rising inflation.
You may be paying more than necessary for your insurance products. So do some comparison shopping. You may find a better deal on your car insurance or save hundreds of dollars by comparing homeowner insurance rates.
And don't turn your nose up when clipping coupons, Buffett does too.
8. Stay on track
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Not everyone believes that the recent surge in inflation is a sign of the future.
Buffett himself said that inflation doesn't seem to be preventing many Americans from spending their money.
"People have money in their pockets and they are paying the higher prices," he told Berkshire Hathaway supporters at the May 1st meeting.
So if you are familiar enough with your current finances to absorb the higher prices - and maybe even have some "change" to invest with - you may want to ignore the hype and get on with what you do.

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