Ways to beat inflation
- Thread starter Arcadio
- Start date
SunnyD
Belgian Waffler
Imp
Lifer
- Feb 8, 2000
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Preferred bank funds unless you think banks are NOT too big to fail...
Things are like bonds, but trade-able, and the price is relatively (key word) stable. I go with preferred ETFs because preferreds aren't as easy as they look: some can be redeemed by the bank at any time for a set price, dividends/distributions can be missed, etc. The two I play with have dividends of 5.5-6.2%, which is way more than the CDs/savings accounts.
Things are like bonds, but trade-able, and the price is relatively (key word) stable. I go with preferred ETFs because preferreds aren't as easy as they look: some can be redeemed by the bank at any time for a set price, dividends/distributions can be missed, etc. The two I play with have dividends of 5.5-6.2%, which is way more than the CDs/savings accounts.
dr150
Diamond Member
- Sep 18, 2003
- 6,570
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Look into MLPs (Master Limited Partnerships).
Since bonds are returning squat, rich folks and charities are buying into these.
These companies act as a toll road for booming oil transport in the US.
KMP (dividend yield 5.88%)
EPD (4.36 yield)
Yields are consistently great and is much more market movement independent due to their business model.
Due to arcane tax laws, keep such investments out of retirement accounts.
Since bonds are returning squat, rich folks and charities are buying into these.
These companies act as a toll road for booming oil transport in the US.
KMP (dividend yield 5.88%)
EPD (4.36 yield)
Yields are consistently great and is much more market movement independent due to their business model.
Due to arcane tax laws, keep such investments out of retirement accounts.
SphinxnihpS
Diamond Member
- Feb 17, 2005
- 8,368
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The safest you can get are Series I savings bond (I-Bonds) or Treasury Inflation Protected Securities (TIPS).
I-Bonds sold now will return the inflation rate for up to 30 years (not redeemable for 1 year, 3 month interest penalty if redeemed before 5 years). I-Bonds have a variable rate above inflation that is set when you purchase the bond. It's been 0 for a long time, and will probably remain 0 until interest rates start to rise.
TIPS are treasury bonds and are sold at auction. They return a small yield (determined at auction) plus an inflation adjustment. They are issued in 5, 10 and 30 year durations. They are marketable securities, so you can sell them early if needed. If you do sell early, you may gain or lose money, as the value of the bonds vary based on the rest of the bond market. If you buy at auction and hold to maturity, you get the the yield + inflation adjustment.
http://www.treasurydirect.gov/indiv/products/prod_tipsvsibonds.htm
I-Bonds sold now will return the inflation rate for up to 30 years (not redeemable for 1 year, 3 month interest penalty if redeemed before 5 years). I-Bonds have a variable rate above inflation that is set when you purchase the bond. It's been 0 for a long time, and will probably remain 0 until interest rates start to rise.
TIPS are treasury bonds and are sold at auction. They return a small yield (determined at auction) plus an inflation adjustment. They are issued in 5, 10 and 30 year durations. They are marketable securities, so you can sell them early if needed. If you do sell early, you may gain or lose money, as the value of the bonds vary based on the rest of the bond market. If you buy at auction and hold to maturity, you get the the yield + inflation adjustment.
http://www.treasurydirect.gov/indiv/products/prod_tipsvsibonds.htm
ViviTheMage
Lifer
Treasury Inflation-Protected Securities (TIPS):
http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm
After that, if you plan to hold for 5+ years then an S&P 500 ETF or mutual fund.
http://www.treasurydirect.gov/indiv/products/prod_tips_glance.htm
After that, if you plan to hold for 5+ years then an S&P 500 ETF or mutual fund.
What i was going to say.
I'd also say gold and silver bullion are good investments even though they're taxed heavily. Lock the gold and silver up in a fire-proof safe with all of your cash. Barter whenever you can, especially with like minded people.
Stocks are not a good idea because you never know when that bubble will burst. TIPS and CDs don't return anything and if you buy TIPS then you're just enabling the govt to borrow more.
This. Safe corporate bonds and stable dividend paying bluechips are the way to go. DO NOT put emergency fund money into these though.
brianmanahan
Lifer
- Sep 2, 2006
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brianmanahan
Lifer
- Sep 2, 2006
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yeah, individual dividend paying bluechips are not good if you want any sort of guarantee you'll have your investment amount available anytime in the short to mid term future.
or longterm even, potentially. see eastman kodak.
SphinxnihpS
Diamond Member
- Feb 17, 2005
- 8,368
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Duh, unicorns and fairies.
Also, it's not, at least solely, that inflation is purposefully underestimated, it's that inflation does not give you a very complete picture of the cost of living.
BudAshes
Lifer
- Jul 20, 2003
- 13,990
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Takes a lot of effort though and bad renters can leave you without rent for many months.
Jeff7
Lifer
- Jan 4, 2001
- 41,596
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I've been dumping more money into my 401k plan, and also shifting money into I-bonds, since savings accounts pay nothing, and banks are introducing fees that apparently are intended to sweep out customers. (I guess they can get money from the government for next to nothing...customers are just expenses now.)
So the I-bonds are effectively the savings account now. It's a bit more restrictive and cumbersome, but I guess it works; better than plain cash, anyway.
So the I-bonds are effectively the savings account now. It's a bit more restrictive and cumbersome, but I guess it works; better than plain cash, anyway.
And in 30+ years, those X ounces of gold you put in will still be.....the same X ounces of gold. No growth. I guess it's a good thing gold's price is so stable. :hmm:
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Most debt comes with an interest rate so it would depend on that - but I do enjoy having an interest rate on my wife's student loans that is notably lower than inflation. Now if only inflation would increase so it becomes an even better deal! (Thats how it works right?
)I'm surprised there are so many answers given we don't know what the OP considers risky and what his time frame is. A long enough timeframe and an index stock fund is pretty safe. A short time frame or easy access to money will negate some of the other suggestions in the thread
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Imp
Lifer
- Feb 8, 2000
- 18,828
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If OP is dumb enough to expect solid and well thought out financial advice from a bunch of random people, then use said advice without discussing with a professional or confidant....
Every finance thread here devolves into a debate about how much a person should keep in reserve as an emergency fund, so may as well keep it simple given the context.
- Jun 5, 2007
- 5,637
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I've got money invested in index funds already , and I am talking about beating inflation with money NOT going into any risky investments, not even mutual funds. Of course I'm not taking advice from random people seriously. I just want ideas.
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