How to protect your money from inflation
“Printing money is merely a taxation in another form. Rather than robbing citizens of their money, government robs their money of its purchasing power.” - Peter Schiff
History seems to repeat itself….
As the US government faces another financial crises, it has yet again turned to printing money as the answer.
Government loans/grants for businesses as well as stimulus checks to families, make up for multiple trillions of dollars being added to the overall money supply. But while this functions as an economic bandaid, the result of such printing is a loss of buying power in each US dollar.
This is an invisible tax, which we are subject to year after year. And it’s only getting worse. So how can we protect our money and profit from this predictable and repeating behavior?
Multifamily Real Estate
One of the greatest hedges for inflation has been and always will be investing in multifamily real estate. This is precisely why the majority of wealthy individuals are also investors in real estate assets. They know and understand the monetary system and instead of losing buying power, they invest to benefit from it.
How does real estate act as a hedge to inflation?
Simply speaking, multifamily real estate valuations are based on profits from rents. Traditionally, as inflation and the cost of living increases, so do rental rates. This increase in rent, adds to overall income, which in turn increases cash-flow and property valuations.
When rents rise, so do property values.
In multifamily real estate, for every dollar of additional annual income, a property will rise in value by $10-$20. This is how owner’s of multifamily assets position themselves on the right side of the equation.
For example, if inflation pushed profits by $10,000, this could increase the property's value by $100,000 - $200,000. So instead of losing as inflation rises, owner's of multifamily real estate benefit as a result.
What side of the equation are you?
For the average American, the notion of saving is a good thing. But unfortunately as the Federal Reserve continues to add to the overall money supply, savers become the losers. Cash sitting in a bank account doesn't necessarily disappear or decrease in count, but it does erode in purchasing power. This (while disheartening) is simply how the system is designed. So the choice belongs to all of us...
Watch our purchasing power erode or invest in assets which will protect our hard earned dollars.
Cadia Capital Group
Cadia Capital Group is committed to growing passive income and wealth through affordable housing assets. These include mobile home parks and affordable apartment communities. If you are an accredited investor and interested in connecting with us, please complete the form below.