WHY INFLATION IS SCARY | The Real Reason We Fear Inflation
Make 2022 The Year You Start Your Journey As A First Home Buyer
Inflation has become a buzz word this 2022. It is one of those economic terms that trigger worry and fear on the faces of consumers and investors these days.
In this video, I’m going to discuss what inflation is and the real reason why we fear it. I’m also going to give you a little hack on what to do about inflation. Let’s go!
What is inflation?
First, let us understand inflation.
Inflation is basically the overall rise or increase in prices of goods and services or the cost of living in a nation.
What actually happens when prices rise across the economy is it decreases the purchasing power of the consumer’s money – and while it can affect us differently, inflation actually hurts poor people and those on fixed incomes the most.
While positive inflation can be sometimes beneficial, excessive price rises can have a detrimental influence on the economy’s long-term performance.
Why you’re so scared of inflation?
So, why inflation is scary?
The inflation challenge Australians are facing now is obviously higher than before, and people can anticipate that it will even be significantly higher in the coming months.
The problem nowadays is, that people panic and have less confidence in the economy as influenced by media.
I would say most people on YouTube and other social media platforms are less than 45 years old, meaning most of those exposed to media are also those that lived through a “goldilocks period” – that is, living in a period with steady economic growth.
In Australia, we have lived through some of the most prosperous times in history for the past couple of years. Unfortunately, that can also mean many people are too indulged in a steady economy, and their minds are conditioned that things will just go smooth and so have not prepared for a sudden economic shift like recession and inflation – and whenever we are not prepared for something, we fear a lot.
So, moving forward, you should be creating your action plan to prepare for inflation. Preparation shall be something that you constantly do to be able to cope with life’s challenges including inflation and recession because these things really happen. It’s part of the cycle and we cannot avoid it.
What to do with inflation?
So, what are the hacks we can do to cope up with inflation?
1. Take responsibility for your financial future.
– Tighten up your budget. Fix up your bills. More importantly, plan ahead.
– Most of us are going to live until the age of 90. So, ask yourself, “Do I want to be working until I am 80?”, “Do I have enough cash for my retirement?” and a lot more other stuffs which I have addressed in another video which I’ll link in the description.
2. Refinance your debt and cash out so you have enough money to get you through.
-This is a major hack to get you through and be able to sleep at night during these hard times
– This is a lot of paperwork, so I strongly suggest you engage a good mortgage broker to assist you in the process. Your mortgage broker will figure out what you can do to restructure your debts, refinance your current loan to get a cheaper rate, or access some cash from your equity.
– Your cash out can help you in many ways especially provide you the extra funds you need during inflation. Just make sure you’re aware of the risks.
The team here at Will Bell Mortgage Broker has been helping a lot of people refinance their current loan. If you, too, are interested, just give us a quick chat and we’re happy to accommodate your needs!
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