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Five Thoughts About Money to Help You Fight Inflation, the Recession, and the Chaos

by | May 16, 2022 | Money

Imagine walking into Ukraine right now with a smile on your face.

I spoke to a friend and former colleague last night. He did exactly that.

“Mate, you didn’t answer all my calls last week. What’s going on? I said.”

“Went for a short trip to Ukraine and just got home.”

“Are you freaking crazy? Do you understand there’s a war going on?!”

He gets deep into the story. I’ve always known his wife was Ukrainian. From the day he met her he used to tell me stories about her parents back in Ukraine. He’d tell me they live in a war zone. There was daily fighting.

The idea the war in Ukraine is new makes him frustrated. The war has gotten worse but it’s not new in his mind.

Two weeks ago his wife’s parents became unsettled. Their town was next to be targeted by the enemy (previously the brunt of the war was far from them). The violence started to escalate.

They told their daughter. She cried to my friend. So he got on a plane and said “I’ll be back soon. Look after the kids.”

With no plan he bordered a plane to Europe and began looking for a way to get his in-laws out. What’s bizarre is his American employer found out what he was up to. They offered to pay for all the costs to have a team join him and rescue his in-laws.

I won’t bore you with the details but they made it into Ukraine. They met his in-laws and took them to Moldova. He was relieved and thought the stress was over. Then he says violence broke out in Moldova, too, so he took the team and his in-laws to Bucharest.

From there he phoned home to Australia and was able to get his in-laws a 3-year refugee visa to escape the war and start a new life.

(Oddly, the biggest risk he faced on the trip wasn’t the violence so much. It was catching coroni-rona, which would have stopped his ability to fly on planes.)

Once all the paperwork was done he got on a plane back to Australia with his in-laws. They greeted his wife at the airport. This sentence he said to his wife made me tear up:

“I bought you a Mother’s Day present.”

Throughout all the chaos there’s always hope if you care to look for it.

Here are five more thoughts.

1. Some investments will never go back up

“Buy the dip” is popular advice. This Aussie in a cowboy hat writing these words says it all the time. It’s often misunderstood.

Some assets will never go back up after this downturn in markets.

Peloton, for example, is a piece of crap exercise bike from the 1990s with an iPad strapped onto it for 1000s of dollars.

Or the price of Zoom stock going to euphoric highs probably won’t go up again either. There are loads of competitors now and we’re staying at home less. Plus products like Google Meet offer the same service for free.

Lesson

When stocks go down it doesn’t mean they’re all worth buying. Some stocks are just bad businesses and will never go up again.

2. The one thing that will lower inflation (nobody’s talking about it)

James Altucher is a smart man.

When he writes something people pay attention. Some throw apples at his afro, others (like me) worship the ground he walks on and kiss his hairy feet. The guy gets finance.

In a recent post most people missed, James breaks down the current situation. He explains how 40% of all US dollars in history were created out of thin air since March 2020.

Then he says the Federal Reserve used to control inflation with interest rates. But since the “Lost Decade” in Japan back in 1989, where they printed loads of money and destroyed their economy, it no longer works.

Raising interest rates is a dog and pony show for amateurs.

James says what’s crashing markets is the Federal Reserve stopping all the free money created of thin air. Free money is crack. No crack … and Wall Street cries, sells everything, and crashes markets.

Here’s what blew my mind…

James says that so much of our wealth is tied up in the stock market. If the stock market goes down then our ability to spend money will go down too.

When we stop spending, inflation cools off.

So the stock market going down is what lowers inflation. And the best way to make the stock market go down is for the Federal Reserve to stop creating money out of thin air. Now you know the real strategy of what’s going on.

Lesson

Once you understand the finance game, it is easier to invest and reach financial freedom sooner.

3. A new asset class that gets little attention

Amid all the chaos of the current world events, so much time gets spent thinking about financial markets.

Very few people talk about digital assets. You could be creating digital assets right now — templates, PDFs, courses, videos, eBooks — and earning passive income from them.

Lesson

A new income stream can help take the bite off inflation and prepare you for the recession.

4. Don’t save money

The cliche advice during hard times is to stop buying $4 lattes. But I love my oat milk, decaf, no-moo-cow, perfectly brewed latte. I’d die without the sweet, sweet taste of her on my lips.

There’s another way….

Instead of saving money, make more money.

Few talk about this. The amount of money you can cut from your expenses is limited. The amount of income you can earn is unlimited. We’re optimizing our money in the wrong direction.

We shouldn’t want to limit our experience of life by cutting out all the good stuff because it costs money. No.

Lesson

Hard times should inspire us to make more money so we can do the things we love. How? Use your wifi.

There are infinite ways to make money online. Don’t make me list them — it’s not fair for my poor, little, fragile hands to retype them all again.

5. Money has nothing to do with a wealthy life

True wealth isn’t having lots of money though.

As my friend who entered Ukraine during a war taught me — true wealth is having people you love right next to you. It’s having your family be safe from harm.

It’s having time to spend with them before a life clock expires and your or them exit this world forever.

That’s what this chaos and recession have taught me.


This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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