How to protect yourself from hyperinflation

How to protect yourself from hyperinflation

And another question from the FB page. Jane is asking ‘with all this money printing that's been happening already, how can we make sure that we are protected from inflation or even worse – hyperinflation?’

And we will be presenting a couple of points to help you guys be protected from hyperinflation.

1. Put yourself close to the raw materials
Stay close to land or anything that could be transformed like lumber. If you look at lumber - you need to have land, you need to cut down the tree it goes through a process and is transformed into standardized logs. Then it goes into producing furniture, then into storage and then you buy the final product at your store.

If you look at it there's a lot of added value that goes through the process of just taking lumber and selling it. And if you can get closer to the lumber then hyperinflation will have less of an impact on you because what you will do essentially is you will cut your own trees down, you will buy the machinery to cut it and make it and you'll learn how to process.

You'll get it at a lot cheaper price and it's the same with everything other raw material. If you can get closer to land transform it, sell it - you can protect yourself from hyperinflation. It's an easier way to protect yourself. The same goes for agriculture, forest, oil commodities, etc.

2. Learn new skills in high demand
In case of hyperinflation - all service in high demand will increase quickly. For example, the maintenance on your car - an essential service that you need it's going to be in high demand, because if people need it, they'll pay a lot more for the service

And if you can learn how to do maintenance on your cars, oil change, construction on your house, etc. this will have a lot of value.

Let’s say that right now it costs about $100 an hour – car maintenance and $65 an hour for construction. In case of a high inflation or hyperinflation - this is going to go a lot higher, and if you learn how to transform your time into value, then you can protect yourself.

All those skills that you learn you essentially can transform into money then or you can do your own house, you can do your own floors, you can buy your own product and work with it.

All of these decrease the impact of hyperinflation when you learn something, when you transform, when you look at doing the oil change. It takes 15 minutes to do your old change and you save about 30 to 40 USD.

And you multiply that by 4 - that's a lot of value in a little bit of time, that you can transform your time into.

3. Use debt to your advantage
So, the  inflation devalues the value of currency. This is something that a lot of wealthy people utilize. They use debt to get richer, because if you're saving money then that currency is being devalued at a very fast rate.

And if you're investing and you're using debt and if you can have long-term fixed debts, you could use that debt and use inflation to pay it off. But make sure that interest rates are lower than inflation if inflation is at 5-10%, make sure that your interest cost is lower.

Hyperinflation destroys the value of the currency by like 50% a month. That’s the worst-case scenario, if you have $100000 in the bank what's going to happen it goes from 100k to 50k, than it goes down to 25k and then 12,5k in just a couple of months.

When you use debt, that inflation will devalue the value of that long-term debt.

4. Invest in hard assets
invest in real estate, invest in gold, in silver, invest in land and commodities.

The only thing you need to be careful with gold and silver right is the huge premium when you want to buy it. There's not a lot of people that are selling it and if they're selling it, they're selling it with a huge premium.

And you would need insurance to store that gold so if you have it at home. There's a lot of companies that insure all your assets at home.

So gold, silver and land commodities, real estate are the best to invest in when hyperinflation or even high inflation hits.

So, those 4 points cover at least the basics on how to protect yourself from inflation or hyperinflation, let us know in the comments which one is your favorite.