Inflation? Cost of Living? No Big Deal.


Let’s look back. Specifically 2019 through year-to-date 2023. That covers COVID-19, economic “upheaval,” recovery, inflation and the Fed raising interest rates. Whew. That’s a lot in just four years. And just what are we looking back at? Again, specifically, inflation and the cost of living. Have the last four years been good, bad or no big deal? That would, of course, depend on your investments………or lack thereof.

Over the past four years, economic conditions changed very unevenly for most people. A vast majority saw their daily living conditions worsen with inflation eating away at their income. Others saw their daily lives little changed (but more stressful) and managed to keep ahead of the increased cost of living. And then there are some that actually wound up way ahead and the economic changes were no big deal. Why, and how?

According to government statistics, the overall cost of living increased roughly 20% between 2019 and currently here in 2023 (and you know government numbers don’t lie). So if your income didn’t increase more than 20% during that time, your living standards suffered. Whoops. Now, if your income didn’t increase BUT you held some investments that returned more than 20%……congrats. Wrong investments? Reverse congrats.

So what might have been (or still are) the best investments to beat that cost of living 20% bump? Lets just look at three to keep it simple.

First stocks. Specifically the S&P 500. That’s what most investors equate to investing anyway. Actually, not bad. The S&P 500 index was up 43% (2,900 end of 2019 & 4,150 currently), easily surpassing that 20% cost of living increase.

How about gold? I mean inflation, banking crisis, etc. would certainly help gold. And, it did. Gold was up 42% ($1,400 end of 2019, $2,000 currently). Nice. Take that cost of living.

BUT, how about bitcoin? Inflation and a cost of living increase ain’t no big deal. BTC was up 386% ($7,200 end of 2019, $34,000 currently). I know, i’ts volatile but if you want big returns, you deal with volatility.

So a 20% increase in the cost of living the past four years? No big deal. Just keep it simple and invest wisely.

Bill Taylor is the CEO of Digital Wealth News and a 40+ year veteran of the financial markets.  You can also ready his weekly musings on BTC, ETH, Gold & SP500 at “The Taylor Market Report“.