How To Survive an Era of Crazy Inflation and High Interest Rates

Given that inflation and interest rates are rising so fast right now, it might seem surprising that ​everything is going up while the stock market isn’t following!
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There have been ups and downs in the economy throughout our history, so the question is: should you be worried?
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If you’re financially prepared, then probably not.
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But how can you be sure that you are prepared?
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The real key to weathering an economic storm is a strong financial cushion.
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There’s no set magic number as everyone’s circumstances are different, but there are a few guidelines you can go by.
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The gold standard is to keep 3 to 6 months worth of living expenses in cash aside. Increase this cushion as you get closer to retirement age, and add even more if you’re prepping for an economic downturn.
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It might not be possible to avoid all financial pain (even if that’s the dream outcome). The goal is to weather the storm with the smallest possible impact on your assets and still be able to get growth in the long run to keep up with inflation.
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Some retirees push back on holding large amounts of cash in today’s low-interest-rate environment. It’s tempting to try and invest to get maybe another 3-5% interest, but growth should not be the purpose of these short-term reserves. This is your Cash Stash and it should be separate from your growth money.
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Just remember that the 3 main buckets of money are Liquidity, Income and Growth. Each serve a different purpose and each should be invested differently.
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This is what a robust investment portfolio looks like. View the cash as a security blanket.
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If you need help deciding how to build your own Bucket Plan or adjust the one you already have with the right amount in your Liquidity Bucket, Income Bucket, and Growth Bucket just click the link below for our online calendar.
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​Don’t forget a good plan accounts for the good times and the bad times. ​They happen all of the time and they have to be planned for.