Protect Yourself From Inflation With Scalable Income

Universal Demand, David T Rosen

Inflation has been in the news regularly lately, a consequence of the ongoing global recession. Inflation is an important metric for central banks and investors to measure, as it gives some insight into the actual value of an given currency. Because inflation impacts wages and prices at the same time, the biggest concern is not the purchasing power for average people on point-of-sale purchases (though that is what is often highlighted) but rather the impact on long-term debt and investment holdings.

Inflation is going to be generally helpful to people who are holding a lot of debt – if you take out a $10,000 loan and then the dollar loses value, you’re paying back the same number of dollars even though each individual dollar is worth less. Additionally, inflation encourages spending and stimulates the economy, generating more income for businesses (a fact often overlooked by people who automatically think inflation is bad for them).

As a business owner, however, inflation really can impact your earnings in the other direction – over time, as inflation takes its toll, every dollar you earn is going to be worth somewhat less. That means you need to be earning more each year just to keep even, let alone grow.

Traditionally, investors and business owners have protected against inflation using interest bearing accounts like Certificates of Deposit or Guaranteed Investment Certificates, or through investing in securities like stocks and bonds. But with interest rates near record lows and showing no sign of increasing in the near term, traditional hedges aren’t offering the same security – and stock market volatility has cost even the most experienced investors money, making the securities market an uncertain defense.

You can’t control interest rates or the stock market, but when you take control of your own Personal, Independent Earnings and connect your work with your wages, you give yourself the tools you need to protect yourself against inflation proactively (proactive link) by putting yourself in control of your income. Consider this: an employee who works for somebody else would have to negotiate a raise every year, and argue for an increase that not only matches the inflation rate but actually exceeds it in order to grow wealthier. The employer, however, needs to make enough money from the employee to not only pay for all expenses associated with the cost of doing business, but also to pay for the employee’s wages and expenses and still make a profit for the company as a whole. Any excess you try to take is going to come directly out of the company’s profit margin – something the company is likely to guard fiercely.

By contrast, you can cut out the middle man and take control of your own earnings, ensuring you keep the profits that your labour generates without having to negotiate over every spare cent. And because your work will be directly connected with your income, you can scale your earning simply by working harder or increasing your residual income through affiliate marketing – both of which are rarely possible in a traditional employment situation. Scalable income means that you can increase your income to suit your lifestyle regardless of the impact of inflation, giving you a hedge that doesn’t rely on an inconsistent market or the beneficence of an employer. That’s taking control of your own future.

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