Inflation is once again outrunning wage growth, and that\u2019s creating a problem for anyone sitting on too much cash.<\/p>\n
The inflation rate climbed 0.6% in April, pushing the annual rate up to 3.8%, a three-year high (1). And consumer prices rose 3.8% year over year while inflation-adjusted hourly wage growth came in at 3.6%, according to CNN (2). That means the purchasing power of many Americans is slipping, even as they continue to earn more on paper.<\/p>\n
Here\u2019s how to\u00a0get rich from rising US property values with as little as $100\u00a0\u2014 and without the stress of angry tenants<\/p>\n<\/div>\n<\/li>\n
Robert Kiyosaki says\u00a0this 1 asset will surge 400% in a year\u00a0and begs investors not to miss this \u2018explosion\u2019<\/p>\n<\/div>\n<\/li>\n
Millionaires under 43 are reshaping investing \u2014 just 25% of their portfolios are in stocks.\u00a0Here\u2019s where their money is going<\/p>\n<\/div>\n<\/li>\n<\/ul>\n
For savers, the challenge can be even more frustrating. If your savings account is earning less than the rate of inflation, your money is effectively losing value over time.<\/p>\n
That\u2019s why some financial advisors are rethinking where they keep their own cash. While many still prioritize safety and liquidity, they\u2019re increasingly looking for places that can help preserve purchasing power instead of letting savings become what one advisor called \u201cdead money.\u201d<\/p>\n
Andrew Fincher, certified financial planner at VLP Financial Advisers, told MarketWatch (3), \u201cInflation has definitely changed the way many people think about day-to-day spending and long-term planning.\u201d<\/p>\n
Fincher said that his plan of attack amid the inflation squeeze was to take a hard look at day-to-day spending.<\/p>\n
\u201cI\u2019ve become more focused on cash flow efficiency \u2014 reviewing recurring expenses more closely, being more deliberate about large purchases and keeping a higher emphasis on value rather than convenience spending,\u201d he said.<\/p>\n
Andrew Herzog, certified financial planner at the Watchman Group, told MarketWatch that he was shifting what classified as a family need to save money. He canceled the weed treatment and lawn fertilization service they\u2019d been using, since \u201cpursuing a perfect lawn is no longer viable.\u201d<\/p>\n
Nicholas Bunio, certified financial planner at Retirement Wealth Advisors, told MarketWatch that he has been thinking twice about bigger purchases \u2014 and it\u2019s been an ongoing process. \u201cLast year, I put off getting a new set of irons, and this year I\u2019m putting off buying a new telescope, as I\u2019m an amateur astronomer,\u201d Bunio told Marketwatch.<\/p>\n
Bunio and his family have also shifted how they view dining out. \u201cWe don\u2019t go out on random days anymore. Just birthdays, anniversaries, and Mother\u2019s Day,\u201d Bunio said. \u201cCutting back saves a few thousand bucks.\u201d<\/p>\n
Read More:\u00a0Taxes are going to change under Trump\u2019s \u2018big beautiful bill\u2019 \u2014 4 reasons you can\u2019t afford to waste time<\/strong><\/p>\n When it comes to your savings and investments, you could also consider how your financial planning stacks up when it comes to inflation.<\/p>\n If the interest rate that you\u2019re earning on your savings account is less than inflation, you\u2019re losing money.<\/p>\n It\u2019s a stressful thought, especially if you are saving for a short- or medium-term goal, and you want a low-risk option so that you can withdraw your money when you need it, without worrying about whether the market is in a downturn.<\/p>\n Jeff Judge, certified financial planner at Chesapeake Financial Partners, told MarketWatch that he moved cash into low-risk, government-backed investments.<\/p>\n \u201cI shifted some cash into shorter-duration Treasurys and I-bonds when rates were favorable,\u201d Judge said. He noted that he \u201cdidn\u2019t rebalance out of equities, but I made sure I wasn\u2019t holding two years of cash in a savings account earning nothing. That\u2019s dead money right now.\u201d<\/p>\n Another certified financial planner, Catherine Valega, with Green Bee Advisory, has been giving similar advice to her clients. \u201cMake your cash and emergency savings work for you […] money markets, Treasury bills [and] CDs for that short term cash,\u201d Valega told MarketWatch, noting that she recommends you \u201cadd more stocks as your time horizon extends beyond three years.\u201d<\/p>\n Certified financial planner Mike Casey, with AE Advisors, chooses to beat inflation by turning to crypto. \u201cThe thesis is straightforward: a fixed supply, significant institutional adoption and a truly neutral monetary asset,\u201d Casey told MarketWatch. \u201cI see bitcoin the way earlier generations viewed gold, a non-correlated store of value, sized appropriately within an overall allocation.\u201d<\/p>\n While there\u2019s no one-size-fits-all inflation hedge, the advisors interviewed by MarketWatch agree on one point: leaving large amounts of cash in a low-yield savings account could make it harder to keep up as rising prices continue to chip away at purchasing power.<\/p>\n Thanks to Jeff Bezos, you can now\u00a0become a landlord for as little as $100\u00a0\u2014 and no, you don’t have to deal with tenants or fix freezers. Here’s how<\/p>\n<\/div>\n<\/li>\n Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake \u2014\u00a0here\u2019s how to fix it ASAP<\/p>\n<\/div>\n<\/li>\n No time to shop for cheaper car insurance?\u00a0This 2-minute check could save you up to 15%\u00a0\u2014 no phone calls required<\/p>\n<\/div>\n<\/li>\n Are you 15 years from retirement but having nothing saved?\u00a0Here\u2019s why it\u2019s actually not too late \u2014 and how to turn things around<\/p>\n<\/div>\n<\/li>\n<\/ul>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly.\u00a0Subscribe now.<\/strong><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our<\/em>\u00a0ethics and guidelines<\/em>.<\/em><\/p>\n Bureau of Labor Statistics\u00a0(1); CNN\u00a0(2); MarketWatch\u00a0(3)<\/p>\n This article originally appeared on\u00a0Moneywise.com\u00a0under the title:\u00a0‘Dead money’: 3 financial advisors reveal where they’re parking cash as inflation hits a 3-year high<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Inflation is once again outrunning wage growth, and that\u2019s creating a problem for anyone sitting on too much<\/p>\n","protected":false},"author":6,"featured_media":3258,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[88,7,48],"tags":[],"class_list":["post-3257","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","category-news","category-us"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/posts\/3257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3257"}],"version-history":[{"count":1,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/posts\/3257\/revisions"}],"predecessor-version":[{"id":3259,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/posts\/3257\/revisions\/3259"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=\/wp\/v2\/media\/3258"}],"wp:attachment":[{"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.cedritech.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Where financial advisors are parking cash to fight inflation<\/h2>\n
Short-term Treasury securities and I-bonds<\/h3>\n
Treasury bills and CDs<\/h3>\n
Crypto<\/h3>\n
You May Also Like<\/h2>\n
\n
Article Sources<\/h3>\n