Inflation remains a critical topic in the news, and many people stay fixated on reports about rising prices. While older persons may remember days gone by when inflation dramatically affected their living expenses, younger persons might not be familiar with this painful economic cycle. The young and old, the wealthy and those of modest means, and those with or without financial backgrounds all want advice about dealing with the situation. Elon Musk may have some insights for them.
Thoughts from Elon Musk
Elon Musk became a well-known figure in the technology world, thanks to his status as chairman of Tesla, the renowned electric car company. Musk earned millions of dollars making the right decisions at Tesla, so his insights into financial matters carry some weight. Recently, Musk took to Twitter to provide his thoughts about inflation and, more importantly, steps to deal with rising costs.
Musk suggested that owning “physical things” seems advisable during periods of high inflation. “Non-physical things” might refer to cash or investments based on services. Logic could dictate that keeping large volumes of cash holdings in money markets or certificates of deposit might not be preferable since inflation makes purchasing power and currency weaker.
So, someone who owns real estate could be in a good position. Inflation, among other factors, has driven the price of real estate relatively high. A homeowner may appreciate the increased equity such soaring real estate prices deliver. Similarly, someone who rents real estate may find higher rent prices produce more income.
And then there’s gold, which is doing well during times of inflation. Prices hit incredible highs, at least for the time being.
Stocks and Crypto
Elon Musk did not rule out the value of stocks, even though stock prices have fallen due to inflation and other stressors. Musk suggests stocks involved with physical goods may be worthwhile investments.
Interestingly, although the cryptocurrency market is not doing very well, Musk pointed out he’s holding onto his crypto assets. Crypto is volatile, as many people realize. Perhaps Musk feels that crypto will make a comeback as it adjusts to inflation’s pressures.
Of course, Musk’s opinions are his own. Investors must weigh their situations before deciding how to react to the current troubled economic times.