US consumer prices rose 6.8% in November, the fastest pace in 39 years. While stocks continue to largely shake off inflation fears, many prominent investors have been busy raising the alarm.
rich dad poor dad Author Robert Kiyosaki is one of the more vocal people.
“Crash and depression are coming,” Kiyosaki tweeted earlier this week. “Time to get richer after a fake inflation collapse. Be aware. Be careful.”
To be sure, Kiyosaki has made a similar appeal in recent months, but it hasn’t quite worked out. In September, he told Kitco News that the “biggest crash in the history of the world” would happen in October.
But Kiyosaki has not given up on his extremely bearish stance. In fact, he’s doubling down on his favorite inflation-fighting asset.
“I’m buying more gold, silver, bitcoin, ethereum, rental real estate and oil,” he tweeted last month.
For those who share Kiyosaki’s concerns, let’s take a quick look at these inflation hedges. It might be worthwhile to invest some of your extra cash.
gold and silver
The famous author is a longtime advocate of precious metals investing. It’s clear why he’s still playing big on two of the most popular products: gold and silver.
Gold has helped investors protect their wealth for centuries. It cannot be printed out of thin air like fiat currency, and its value is largely unaffected by economic events around the world.
Silver can also be used as a store of value and as a hedge against inflation. Also, silver is an industrial metal. It is widely used in the production of solar panels and is also a key component in the electrical control units of many vehicles.
You can buy physical gold and silver at your local bullion store. Alternatively, you can look at big miners like Barrick Gold, Newmont and Wheaton Precious Metals.
If gold and silver prices rise, these miners are likely to flourish.
Bitcoin and Ethereum
Some people think that Bitcoin is the new gold. Kiyosaki likes it too.
When Bitcoin surged above $60,000 in October, the author tweeted that the cryptocurrency’s future was “very bright,” but was just waiting to drop before investing more.
Well, Bitcoin has definitely pulled back since then and is currently trading around $47,660.
Kiyosaki is also buying ether. While Ethereum isn’t as big or popular as Bitcoin, its use in peer-to-peer lending, NFTs, gaming, and stablecoins means it’s something crypto investors shouldn’t ignore.
You can buy Bitcoin and Ethereum directly.
Today, many exchanges charge up to 4% commission just for buying and selling cryptocurrencies. But some investing apps charge 0%.
You can also invest in companies linked to the cryptocurrency market.
For example, the HIVE blockchain mines both Bitcoin and Ethereum. The stock is up about 55% so far this year.
Then there’s Coinbase, which operates the largest U.S. cryptocurrency exchange with 7.4 million monthly trading users, and reported third-quarter revenue of $1.24 billion.
To be sure, Coinbase is currently trading at $270 per share. But you can own a fraction of a cryptocurrency exchange using a popular stock trading app that allows you to buy fractional stocks with the money you’re willing to spend.
Historically, owning real estate has been one of the most effective ways to hedge against inflation and earn passive income.
Today, you don’t need to be a landlord.
There are a number of publicly traded REITs that offer investors generous cash distributions. These companies own income-generating real estate, collect rent from tenants, and then pass the money on to shareholders in the form of regular dividends.
For example, Realty Income has been acquiring and managing commercial real estate for the past 5 years. It earns rental income from long-term net lease agreements and pays monthly dividends to investors.
You can also look outside the stock market.
For example, some popular investment services allow you to lock in a steady stream of rental income by investing in prime commercial real estate—from an R&D campus in San Jose to an industrial e-commerce warehouse in Baltimore.
One of the clearest signs of soaring inflation is the rebound in commodities we saw earlier this year. In fact, commodity prices are often considered a leading indicator of inflation.
So it’s no surprise that oil — the world’s most traded commodity — is also on Kiyosaki’s list.
Crude oil prices have slipped over the past month, but they are still up more than 40% so far this year.
As you might expect, strong oil prices benefit oil producers. So far this year, investors have reaped big returns from the likes of Chevron (40%), Exxon Mobil (51%) and ConocoPhillips (84%).
That said, investing in commodities is a particularly volatile business.
If you’d rather invest in something without the extreme ups and downs of stocks, cryptocurrencies, and commodities, take a look at some lesser-known alternative assets.
Traditionally, investing in things like exotic vehicles or litigation financing or even ocean finance has only been an option for the super-rich like Kiyosaki.
But with the help of the new platform, retail investors now have access to these opportunities too.
This article is for information only and should not be considered advice. It does not provide any kind of guarantee.