There’s been a lot of talk about inflation, especially in the aftermath of the global pandemic and how it affected every part of our lives.
When we talk about inflation, we’re looking at how it affects us personally – the rise in food costs, supply chain, and gas – but as business owners, we also have to look at how it affects our business.
Just so we’re on the same page, what exactly is inflation?
In the simplest terms, it’s a decrease in the power of your money. So, if you have $1,000 in the bank last year. That amount is your buying power.
Let’s say there’s an inflation of 5%; that would then bring your $1,000 of buying power down to $950.
You lost $50 because of inflation. That’s crazy, right?
Now before you freak out, there’s a good spot here that you have as a wholesaler. As wholesalers, we’re trading in real estate.
Thankfully, real estate is one of those vehicles that is protected from inflation because it usually rises with inflation.
Certainly, you’ve seen the rising costs of housing prices; that’s due to inflationary pressure.
So, if you take that $1,000 from before and put that into real estate, you’d actually be gaining about $400 at that 5% inflation rate.
That’s $1,400 instead of $950!
This is the main reason why, as wholesalers, we want to meet, network with, and do deals with high net investors because they know how to put their money to work for them – in vehicles like real estate and not just sitting in the bank.
I talk a little more about inflation in this video:
Bottom line, guys – you should put your money to work for you, instead of just sitting in the bank.
I can tell you that the investments that I have in real estate have made money, despite the pandemic and the effects that came after it.
A big part of that is understanding how inflation works, while also talking to investors about how we can help them keep that money in real estate and keep it growing.
Inflation doesn’t have to be a scary word or event if you know what it means for your business and how you can work within it.
Guys, if this was helpful to you in any way, please subscribe to my YouTube channel or if you’re ready to start doing deals, come join us at Astroflipping!