How to Beat Inflation by Investing in Crowdlending Platforms
There's one word that causes dread in the world of Economy, and that word is inflation. Every investor, whether experienced or amateur, wishes to keep their money safe from this harmful phenomenon.However, several investments methods you can do, so you can beat the inflation even if there is a significant rise in the price level. Crowdlending is one of those, but before diving into the multiple choices you should consider, you must know in detail what they're all about.
What is inflation?
Inflation is often defined as a rise in the general price level after an imbalance between the quantity of money available and the trading needs. However, this concept refers to the general trend of prices, not to variations of a specific price. It is related to the shifts in the value of the currency itself, when the value drops, the prices of goods become higher.
What this leads to is a decline in the purchasing power of the currency. Thus, making it harder for people to maintain economic stability. But how is inflation measured? Well, it can be reflected in the increase of an average price level of a basket of selected goods. Inflation is expressed in a percentage, which means the rise in the general level of prices over a determined period.
Check out this video where TheSchoolOfLife explains what Inflation is.
Methods to beat inflation
Even if you’re one of those who save up money and keep tabs on their finances, this economic phenomenon can affect you. While the prices of necessary goods continue to go up, the value of your savings will decrease in time. This is why you should take some measures to ensure the value of your money doesn’t go downhill.
The best way to stop your savings from losing their value is by moving them around. Investing your money in different products or goods will not only save its value from decreasing but sometimes, it can bring you profit in the long term.
There are many options to choose from when it comes to investments, however, we’d like to share with you the best solutions possible to beat this problem.
Even if one of the traditional ways to stop your savings from losing their value is investing in bank deposits since they offered rentability of 0.1% to 0.4%. However, this is not recommended nowadays because inflation has escalated, making that rentability unbeneficial.
This is why you must look for alternatives that offer better long-term rentability, such as:
One of the reasons why so many people choose to put their money and trust in investment funds is because it adds an interest rate as time goes by. However, your money must be kept in these funds for a long time. This can be a disadvantage for some people since they can’t take it out whenever they want to. But if this isn’t a problem for you, this could be a good choice.
Companies listed on the Stock Exchange
Another way to protect your money from inflation is to invest in company stocks that could increase your wealth, the best way to do so is to find companies that pay out good dividends. Most shares can ensure your money’s value won’t decrease, but you can also get a decent profit from them, which makes it an appropriate choice in the long term, but only recommended for experienced investors.
This is a recent way to preserve your money’s value, it consists of a network of collective financing. How does it work? Any person who wants to has a project can start a crowdfunding campaign to obtain donations or financing to make their project come true.
There are different types of crowdfunding depending on what the participants receive for giving their money. These 5 models of Crowdfunding are:
- Donations: Those who participate don’t get any type of reward.
- Rewards: The participants get a reward for their import.
- Shares: By giving your money to a certain project you get a portion of the shares of the company or the project.
- Royalties: When you invest in a determined project or company and expect to get a share, even if it’s symbolic, of the benefits.
- Crowdlending: It’s a form of massive financing through loans from companies in exchange for an interest rate in the money borrowed.
Defeat inflation with Crowdlending
If you want to make a smart move and diversify your investments, then you must try this form of Crowdfunding. The risks are relatively low, and you will be able to support and finance SMEs.
You must be careful to put your money in the hands of people that will fulfill their part of the deal, or else you will lose your savings. In order to avoid that, we recommend the following online platforms where you can invest safely and get amazing returns.
Did you Know
Savings Account vs. Crowdlending
Online investment platforms can cause a general feeling of mistrust amongst many people, especially those who are stuck to the traditional methods, like a savings account. Even if this particular scenario has worked out for some in the past, the reality is it’s no longer a viable choice.
Keeping all your money in one place will only contribute to its devaluation, especially on a bank account that generates such low interests that could never compete with the rate of inflation that we’re going through today. That is why we recommend you choose to invest your money through crowdlending.
Whether it’s a short-term or a long-term investment, this method is a low risk and can guarantee your savings will keep their value through time. Besides, you’ll be able to make more money, due to the rates of interests these platforms can provide. No matter the size of your piggy-bank, you can start to test the waters in the world of crowdlending whenever you want!