The cost of living keeps growing while people’s savings and income remain the same. Inflation is a decrease in the value of the dollar. Companies increase their prices so they receive the same value for their products – they just ask the customer for more dollars to keep up with increasing company expenses and the cost of living. But while prices rise, the number of dollars in your accounts may not. If the interest rate on your bank account or investments is less than the rate of inflation, you could actually be losing money by letting it sit there.
Compare today’s prices with prices 40 years ago. In 1970, the average rental price of a property in California was $484/month. Today, it’s approximately $1,430/month, almost triple the cost in 1970! Based just on inflation alone, an item that cost $100 30 years ago would cost $215 today or more.
It is getting more difficult to afford the basic needs for the family. Due to inflation, it is becoming harder and harder for some families to cover the costs of childcare, health care, housing, transportation, and sometimes even food. If you’re lucky enough to be able to meet your expenses and have some money left over, how do you protect that money from the eroding effects of inflation?
Buying and owning gold helps protect you against inflation. Unlike most investments, the value of gold usually keeps up with the pace of inflation. While inflation can negatively affect your financial situation, having a portion of your investment portfolio in gold helps shield you from those effects. For example, the amount of gold you’d need to pay for a car 50 years ago is roughly the same amount as you’d need to pay for a car today, despite cars costing several thousand more dollars.
Many financial advisors suggest their clients put up to 15% of their investment portfolio in gold as a hedge against inflation. The price of gold usually increases alongside inflation so as the U.S dollar weakens, gold prices rise. Gold investments can protect against world instability and economic uncertainty and their value is based on the metal itself. Having a share of your investment portfolio in gold can help ensure that your investments are protected during uncertain times.
Call us today at (818) 827-7152 to learn about the benefits of investing in gold. Who do you know that is concerned about inflation and the devaluation of the US Dollar? Have them call or email us, or have them get in touch via our Facebook page.