Protect Your Wealth from the Ravages of Inflation: A Three-Step Method

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Apress, Aug 19, 2011 - Business & Economics - 146 pages

Protect Your Wealth from the Ravages of Inflation is for people who have financial assets to protect in an unpredictable, inflationary environment. Maybe you have tried traditional financial advice, financial planning, and passive investment management techniques and you’re still losing ground. Maybe you’re worried that by the time you need to use it, your retirement fund will be worth less than your total contributions. Maybe you believe that high inflation will significantly decrease your standard of living in the future. Maybe all of these issues apply to you. Don’t despair; help is at hand.

Protect Your Wealth from the Ravages of Inflation is a concise, no-nonsense, straightforward guide that will help you to do three things:

1. Ensure that your emergency fund will still have some purchasing power when you need it. Emergency funds sitting in checking accounts, or near-cash investments, will just be eaten away by inflation. There is a better way to give you access to the cash you need when you need it. This book shows you how.

2. Insulate you from significant changes in the strength of your home currency. If all your income and expenses are in a single currency like the U.S. dollar, you run a significant risk that your home-country currency will lose value. Currency risk in your income-purchasing power and working capital is often overlooked until it’s too late to do anything about it. This book deals with this issue and gives you easy-to-follow advice to protect the value of your money.

3. Generate a better risk-adjusted return in your investment accounts. Buying a basket of stocks and mutual funds and then performing the traditional “annual rebalancing of a diversified portfolio” just doesn’t generate the returns most people require from their investments. This book shows you simple, powerful, and sophisticated techniques you can use to manage your investment accounts more effectively—and without making it a full-time job.

Protect Your Wealth from the Ravages of Inflation can’t guarantee that you will meet your financial goals, but it can guarantee that your odds of success will be significantly increased if you follow its advice. The book:
Explains why traditional investing methods virtually guarantee a negative rate of return in real terms. Illustrates the pernicious effect of inflation on an average investor’s portfolio—and why an inflationary period may be in the offing. Provides a three-step process to withstand emergencies, protect your liquid assets, and produce a superior risk-adjusted return on a stock portfolio compared with conventional investing methods.

What you’ll learn How government policy normally leads to a debasement of the currency and subsequently an inflationary environment How inflation significantly reduces your standard of living unless you can consistently increase your income or reduce your expense How the current U.S. Consumer Price Index seriously underestimates true inflation How to construct an inflation-proof emergency fund How to mitigate home-currency risk How to generate a better-than-average risk-adjusted return in investment accounts How to do all this before it’s too late Who this book is for

The book is aimed at people who have reached a level of financial stability and whose income is greater than monthly expenses. They have emergency cash, day-to-day working capital, and investment accounts (including retirement accounts) to protect and grow in a potentially inflationary environment. Although U.S. residents will be the primary focus, all the methods and techniques presented should be relatively straightforward to adapt to any country with a fiat currency.

Table of Contents Financial Fitness Inflation: What's the Problem? Step 1: Set Up an Emergency Fund Step 2: Make Savings and Working Capital Work for You Step 3: Generate a Good Risk-Adjusted Return on Investments Taking Control

Appendix A: Recommended Reading
Appendix B: Useful Resources

 

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Contents

Financial Fitness
1
Whats the Problem?
13
Set Up an Emergency Fund
39
Make Savings and Working Capital Work for You
50
Generate a Good RiskAdjusted Return on Investments
69
Taking Control
107
Recommended Reading
116
Useful Resources
121
Index
123
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About the author (2011)

Paul King is owner, head trader, trading coach, and financial consultant at PMKing Trading, LLC. His background is in information systems, but he moved from technology to the business side as a consultant to Wall Street companies. King is passionate about trading and helping traders improve their performance through his international mentoring program. He has trading clients all over the world, including in the U.S., Canada, South America, and Australia. As well as sharing his insights in his blog, mini-eBooks about trading, and articles published in Futures magazine and elsewhere, King is very interested in personal finance and helping his clients become wealthier. Author of The Complete Guide to Building a Successful Trading Business, King’s philosophy on trading and life in general is summed up by this old Chinese proverb: “Those who say a thing is impossible should not interrupt the people doing it.”

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