INFLATION: SAVE LESS. INVEST MORE

By John In Uncategorized 81 Comments

One of the wisdom nuggets most passed down from the older to younger generation is the art of saving. The idea that the best way to beat poverty and live a comfortable life is to save every part of one’s income has been shared in millions of manual and personal interactions as a surefire way to rise above poverty. Indeed, this wisdom is substantiated in Samuel Clason’s timeless novel, “The Richest Man in Babylon”, when he wrote ” a part of all I earn is mine to keep”, which means to build wealth, you must save a part of all your incomes.

However, while saving is indeed a smart thing to do, it must be said that you will still end up coming to poverty if all you do is save without making your saving work for you through investing. In fact, Clason’s book, earlier quoted, went further to promote the idea of putting one’s savings into profitable investments in order to completely escape poverty.

In the face of biting inflation in Nigeria and many parts of the world, the wisdom in investing one’s savings on a profitable investment vehicle has never been more effective.

Currently, the inflation rate in Nigeria is 21.09% which implies that most assets are losing their value daily. In the face of foreign exchange challenges and unstable naira value, smart investors are looking to put their savings into vehicles that can not only preserve their funds, but yield them some income. They understand that the secret to making money in an inflationary climate is to hold investments that appreciate faster than the inflation rate.

This is conceivable because not all assets are adversely affected by inflation. What you need to do as an investor is identify the best ways to mitigate the effects of inflation on your investments.

That is where investing in real estate comes in. As inflation rises, so do property valuations, and landlords would be inclined to charge higher rents. This results in higher rental income for owners of the property. So, when you purchase landed property, you place yourself in the position to benefit from the rising cost of real estate.

You can gain direct exposure to real estate by buying properties directly. Alternatively, you can delve into Real Estate Investment Trusts (REITs) if you cannot afford entire properties to invest in a unitized way. If you are looking for profitable real estate investments to make, or you seek advice on other investments vehicles to put your savings in this period of biting inflation, contact us today at PWAN Stars and we shall be happy to help.