 It's inflation. Hyperinflation. It seems like almost everything is more expensive these days. Just look at the price of gas per gallon. More and more people are agreeing that inflation is getting worse despite the government assuring us that they have it under control. First they said there was no inflation, then they said that inflation is transitory, then they said there's just a little bit of inflation and now they're saying the historic levels of inflation are just due to supply chain issues. In fact, I put a poll up and over 75% of you believe that we are heading towards hyperinflation. But there's a problem. A lot of us believe that this is a serious possibility, but what are we really doing about it? Probably nothing. Well, by the end of this video, you're gonna have a really good idea what could be coming down the line and some easy steps you could take in order to prepare for it. All right, so first thing, do not rush to pay off your existing debt. And here's why. If hyperinflation truly does occur, that means your debt is going to get cheaper and cheaper. So let's say you have $100,000 in fixed interest debt, something like 4%. Let's say just to keep things simple, inflation goes up 100%. So that means your money is worth one half of what it used to be. That also means that your debt is worth one half of what it used to be as well. And most of the times when you've seen hyperinflation throughout history, it's of course accompanied with an increase in salary. So $100,000 a year might be the new minimum wage. And so $100,000 in debt wouldn't be that difficult for you to pay off. Now I will say here, this isn't financial advice and also make sure to check what type of debt you have. So for instance, is it a low interest rate? Is it a variable interest rate? Is it a fixed interest rate debt? Even if it is variable interest rate, you wanna check to see if there's a cap on that interest rate. So it's really important for you to understand your debt. And another thing you might wanna take into consideration is student loan debt might end up being forgiven. Now I've really been keeping my finger on the pulse of student loan debt. Obviously I make a lot of videos about college degrees. And I do think that there's a good chance that it's going to get partially forgiven. I hate to be the bearer of bad news, but I don't think it's gonna be fully forgiven even though politicians keep on talking about it. They're just talking about that so you will elect them basically. But I do think there's a good chance that it is partially forgiven. Now let's go ahead and play devil's advocate here and let's talk about several different scenarios that could happen, probably won't happen, but they might. Let's say a total almost apocalyptic scenario happens like the United States ends, the economy collapses, a new regime takes over something along those lines. Now this is very unlikely to happen for reasons that I'll get into later on in the video. But if it did happen, there is a good chance that your debt would get wiped out. And the truth is in these worst possible situations you'd probably end up being screwed either way because if we don't have an economy things would just totally descend into chaos. So it really doesn't matter and you shouldn't spend too much time worrying about it. But analyzing this kind of from a game theory perspective if you look at all the possible outcomes if hyperinflation actually does happen there are very few outcomes where you would come out on top by paying off your debt on time. And one of those few examples would be if your loan is callable. And being callable means that your loan can be recalled at any time. And when it gets recalled you have to immediately pay it back. And again, this is something that you would want to check on. All right, so the number thing you wanna do is map out an investment strategy. Now one of the most common things you're gonna hear as an investing strategy to hedge against inflation is going to be investing in precious metals like gold. And it is true that when the United States had inflation issues in the 70s gold did spike. So it was a good hedge against inflation when it happened in the 70s. However, since the 70s gold has performed worse than just about any other asset class out there. Index funds, for instance, which is a very safe investment since that time even the bad ones have gone up over 16X. Whereas gold has barely doubled. But again, let's take it worst case scenario here you're putting your money into gold because you think the United States is gonna collapse. It's gonna end like the Roman Empire did. First of all, very, very unlikely. I do think the United States will eventually collapse just like every empire does. But in the case of the Roman Empire and I'm actually a huge fan of history it took a very, very long time. It was a gradual process for the Roman Empire to collapse. And yes, they did have a lot of the same inflation issues that we're having today. So the US dollar first of all is the Petrodollar. So everyone has to use it and it's linked to gas. It's also the world's reserve currency and everyone else bases the value of their currency on ours. And on top of that, the US dollar is backed by the US government which has the most powerful military in the world. And on top of that, we are still very involved in the geopolitical scene and we're basically still the world police which don't even get me started on that one. And all of these are reasons that inflation hasn't hit us nearly as hard as it should have after we printed trillions of dollars during COVID. And without a doubt, it is going to take a long time for the US to lose their throne. These sorts of things do not happen overnight. But that's just my opinion. And with that being said, it is still possible. So let's go ahead and play devil's advocate, right? So another situation, the US as it's currently known, maybe it ends up splitting in two, maybe it ends up getting into a war and we lose. First of all, if you're using a company to buy gold for you and store it, which most people do, how are you gonna know that you're gonna be able to get a hold of that gold? If the world goes to war or we lose a war, something along those lines, how are you going to be able to enforce making that company give you the gold that you bought from them? How are you gonna make them honor their end of the bargain? You're probably not. There's no way to enforce that. Now, the second thing that people do is they buy their own gold and then they store it themselves. And first of all, that's really difficult to hide. It's also really heavy and difficult to move. It's not very liquid at all. It's very difficult to convert gold into money. And on top of that, it's not the easiest thing to trade. Like, can you imagine taking a gold bar into a market and then trying to trade it for like 20 loaves of bread? I'm not hating on gold. I don't wanna give you that impression. You wanna keep it as part of your portfolio. You know, that's totally fine. What I'm saying is it shouldn't be your only hedge against inflation. A much better hedge against inflation, in my opinion, is cryptocurrency and specifically decentralized finance. First of all, many cryptocurrencies are designed to be deflationary. That means they actually gain in value over time. And this is because the total supply of the cryptocurrency either stays stable over time, like it has a maximum amount of supply, or in some cases, it goes down over time. So for instance, with Bitcoin, everyone knows about Bitcoin, there will be 21 million total Bitcoin ever created. There will never be 21 million and one Bitcoins. And over time, especially towards the beginning, many of these Bitcoins have gotten lost. So a lot of people estimate that there's more like 17, maybe even as low as 15 million Bitcoin that will be left. And that supply is gonna keep going down over time. Now, Bitcoin is the most well-known one, but in my opinion, there's even better hedges against inflation in what's known as decentralized finance or DeFi. And DeFi is built on the blockchain and it gets rid of many traditional problems of finance, such as inflation, government manipulation, censorship, and corruption. And it's a pretty complicated subject, but this is something that I discuss in my Patreon where you can get access to a private community, my buy and sell alerts, as well as one-on-one coaching from me. There's also a premium Discord community as well, and you can find all of that down in the description below. Number two on the list is to keep your costs low. Now, I know this is boring. It's almost like getting a lecture from Dave Ramsey, but it's really important, okay? And it's especially important if you're living in a first-world country to keep your costs low. If you're living in a first-world country, you are living in a toxic consumer culture where you are likely spending way more money than you need to on stuff that you absolutely don't need. Your consumers. Now, first of all, I'm gonna talk about some traditional ways to keep your costs low. I'm not gonna lecture you too much because I know you might've heard some of these, but I'm gonna talk about the most important ones. And then I'm gonna talk about some non-traditional ways. So first of all is keeping a budget and figuring out what actually makes you happy in the long run, right? What actually brings you joy versus things that kinda make you happy for a moment, but in the long run, they probably end up making you unhappy, right? So eating a bunch of junk food, for instance, might make you happy for a moment, but in the long run, it's gonna make you unhappy because you're gonna be unhealthy, you're gonna gain weight, et cetera. Now, the type of spending that I think is totally worth it is if you maybe have a hobby, something that truly makes you happy. Let's say you really get into photography, for instance, so you buy a camera, it costs maybe a thousand bucks. In my opinion, if that's something that makes you happy in the long run, it's absolutely worth it. Now, when it comes to expenses, you really wanna pay attention to the big ones. So things like housing, food, and vehicle costs. Now for housing, many ways to keep this cost low. For instance, you could buy a house and basically turn it into an investment. You can rent out at some of the rooms and in many cases, you're living for free or you're paying very little in rent. And in some cases, if you really get a deal, you can actually make money doing that. That's commonly referred to as house hacking. For food, there are many different ways as well. My personal favorite is to use a crock pot. And the reason for that is because a crock pot saves you time and money. I can't tell you how many times I used a crock pot when I was in college. Basically, right before I went to bed, I would put some stuff in the crock pot or maybe right before I went to class. I would set it for five hours or eight hours, whatever it was. And then when I got home, it would be done. There were many times where I lived on less than $100 a month when it came to my food bill. Now, when it comes to a car, again, just really quick tip, there's a lot more to this. But generally speaking, you wanna get a car that has about 10 years of depreciation. And what I recommend is getting a Toyota or a Honda because they are super reliable. Now, non-traditional ways of saving money. This is something that I've talked about a couple times on this channel. And in my opinion, this is super underrated. And it's also not something that everybody can do, but it's something that you should consider. And if you're in a position where you can do this, this can be a huge opportunity. So if you live in a big city, maybe consider moving 10 minutes outside of the city where home prices are probably half. And cost of living in general is probably half as well. You might also consider moving to a more affordable state. Some states are much more affordable as well as being more tax friendly than others. Now, this is a big one, and I know not everyone's gonna be able to do this, but consider moving to a more affordable country. There are many countries where your money or cryptocurrency can go three to five times as far as it does in the US. All right, so number four on the list, this is a very important one, and that is to have an emergency fund. Now, investing is great, keeping your costs low is great as well, but make sure you have an emergency fund so you don't have to dip into your investments. Yes, I know emergency funds are super boring and in an inflationary environment, it is going to lose value, but having one is better than not having one at the end of the day, so it's still super important. Number five on the list is for you to have an exit strategy. So if really bad things do happen and the shit hits the fan as they say, there are a few different things that you can do to have a good exit strategy. So first of all, being able to live off the land, things like having some basic survival skills, knowing how to make a fire, knowing how to prepare food, also having extra food, water, and necessities. You also wanna have an exit strategy for your various investments as well. You wanna know exactly how long it takes for you to withdraw your money, for instance. You know, with crypto, for instance, you can withdraw your money relatively quickly if you know what you're doing. With some brokerages, it might take you a long time to withdraw your money, so you wanna know exactly how long that is. And then again, having other countries that you can go to if need be. Now there's one thing I wanna talk about really quickly when it comes to hyperinflation. I think this word is thrown around a lot and there's a lot of people who have different definitions of the word. So Investopedia, for instance, has hyperinflation at 50% inflation per month. So we are definitely nowhere near hyperinflation by that definition. Now there are other definitions of hyperinflation that are a lot less than that and those might be possible, but in my opinion, the more likely scenario is stagflation. And stagflation is basically where economic growth is stable or even goes down, but prices go up and unemployment goes up. And usually this is not accompanied by an increase in salary. Now stagflation is a little bit different and I'm probably gonna end up making a video on that. But the point here is I don't think we're gonna get to levels of 50% inflation per month. Now if you enjoyed this video, you'll probably also love this video right here. Go ahead, gently tap that like button, hit the subscribe button, ring the notification bell and comment down below any thoughts, comments, et cetera that you have on the video and I will see you next time.