We’ve been busy updating our investment thesis and to make a long story short here are a few key points we’ll jump right into.
- Inflation will be high for years
- Globalization is currently undergoing a re-configuration. With a threat of China invading Taiwan and Russia being sanctioned for the Ukraine invasion, it is clear things won’t return to “normal” nor as it was before covid. This reconfiguration will lead to more supply chain issues and shortages of goods so prices will continue to climb.
- Demographics will impact the western world heavily. In the US, 60 million boomers will hit the age of 65 by 2030. Europe and many parts of Asia will suffer a similar fate. There will be demand for goods and services but not enough people to provide those goods and services. this will drive wages higher and higher leading to more inflation.
- Debt has exploded globally and the repayment of debt will be difficult especially if interest rates rise across the world.
- Income generation will be key to survival (what we are doing)
- Real Estate does well during periods of high inflation. We are investing in physical rental properties and have had very positive results so far.
- Real Estate Investment Trusts (REITS) provide consisted dividend income as most REITS payout a large percentage of their revenue in the form of dividends. We have been investing in REITS and have written about those here and here.
- Alternative Real Estate investments through crowd sourcing sites such as Arrived Homes, Groundfloor, Crowdstreet, etc. We’ve started to nibble at these investments because they have low cost entry from a few hundred to a few thousand to get started versus huge capital outlays in other real estate investments.
- Dividend Stocks will provide income and do well during high inflation. We have positions in many dividend stocks and are waiting for a stock market correction to acquire more.
- Aggressive wage adjustment will be a necessity not a luxury. Changing jobs, asking for a promotion or asking for a significant cost of living adjustment will need to be done. We recently had a few members change jobs and earn a significant bump in pay to adjust to our new reality.
- Investing in education and skills development will help with aggressive wage adjustments by demonstrating to employers that we have valuable skills worth the money.
- I-Bonds are almost paying 10% interest. We opened several accounts a TreasuryDirect.gov and bought I-Bonds. These are the only bonds we are investing in right now.
As you can see from the list, it’s a tall order and it’s been keeping us all very busy. We will write more about each topic in detail but for now stay tuned and stay solvent…