Hopefully, you can see my cover art for my Inflation Ate My Paycheck series (101). It is a purple dragon who I choose to represent inflation. And boy, is he hungry. We are experiencing runaway inflation for the first time since the 1980s.
Let me be clear—you can’t passively beat inflation. You will have to take active steps to protect your money, reduce your spending, and increase your income. Today, my goal is to give you some options in all of these categories.
As I mentioned in Inflation Ate My Paycheck 101, I reduced my food budget during these inflationary times. Yes, you read that correctly. I used a $31 dividend to go shopping in week #3 of this month. And for week four, I will use $100 in royalties from Amazon.
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As you can see, my income streams (although not massive) can give me options to combat inflation. I still prioritize investing in dividends, but now I use those in real-world cases.
By investing first, I ensure that my dividend and royalty income continue to increase. If I reduce my investing to combat inflation, my dividend income may stagnate. With that, let’s review ten creative ways to beat inflation.
1) Gardening
2) Homesteading/Sustainable Living
3) House-Hacking
4) Consolidate Resources with Family
5) Minimalism/Tidying Up
6) Dividends
7) Content Creation
8) Coin-Op Machine
9) Rent Your Car
10) Expand Your Job (Consulting, Freelancing)
GARDENING
You can start a small garden that produces fruits, veggies, or herbs no matter where you live. To prove this point, I read the book “Apartment Gardening.”
My wife always grew cucumbers, baby tomatoes, and dill in our yard. Adding some fruit trees would be ideal; however, they take years to produce fruit.
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If you grow an abundance of produce, you can sell it to neighbors. Also, you can try to grow exotic herbs that can turn a profit. Be creative, and the marketplace will reward you.
HOMESTEADING / SUSTAINABLE LIVING
I have been reading a lot about homesteading and sustainable living. Sustainable living reduces waste, reuses products, and lowers your impact on the environment.
Luckily all of these things also reduce our expenses—so it’s a win-win. Homesteading involves gardening, raising animals, generating power, and purifying water.
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I read the book “The Homesteading Encyclopedia” to better grasp homesteading. You can honestly pick your homesteading flavor, doing what you feel fits your lifestyle best.
I wrote the article “Homesteading vs. RV Life” to compare these two minimalist lifestyles. Homesteading is more of a long-term (10+ year) lifestyle, while RV’ers move from location to location regularly. Both cost significantly less than chasing the Joneses in suburbia.
HOUSE HACKING
My favorite way to beat inflation and build wealth is house hacking. My wife and I went from -$77,000 to +$220,000 in less than three years flat. I attribute this primarily to house hacking.
We rent rooms as our way to house hack and ultimately pay the mortgage on our primary residence. However, there are many other ways to house hack, such as buying a duplex, finishing (and renting) a basement or attic, or renting an in-law suite.
Merry Debt-Free Christmas
The return on investment for house hacking is so high because it costs almost nothing to start and continue this process. If you can deal with people, house hacking is the best way to beat inflation.
CONSOLIDATE RESOURCES WITH FAMILY
Along the lines of house-hacking is consolidating resources amongst families. Do we all need to have our own homes, cars, and babysitters? By sharing living spaces, food, gardens, resources, etc., among families, we can leverage our relationships to beat inflation.
Most people avoid family at all costs, but there has never been a better time for adult children to live with parents, grandparents to assist with childcare, or start a family business. We can ensure that we beat inflation as a team by working together.
MINIMALISM / TIDYING UP
Along the lines of sustainable living are minimalism and tidying up. Reducing the things around your home can allow you to sell these items. This can give you immediate cash flow that you can use towards investing.
However, the mindset of a tidy home will reduce future needless purchases. The book “The Life-Changing Magic of Tidying Up” gives us step-by-step guidance on tidying our homes. Yes, you need to do it in a particular order.
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Decreasing possessions can increase your wealth by allowing you to focus on assets that produce money. You don’t have to go full-on minimalist to reap the benefits; you need only reduce the environmental impact in your home.
DIVIDENDS
Another favorite of mine is investing for dividends. Yes, it takes money to make money in this situation. However, if you are gardening, house hacking, or creating content, you will start to see additional cash flow.
Divert some of this cash flow to dividend-paying stocks that will give you a return on your investments. My wife and I are close to receiving $1,000/month in dividend income, and it feels great.
Having money hit your account is like having a ghost working a job for you. When the ghost receives its paycheck, it gives it to you. It’s free money! An excellent place to start is “Dividend Investing: Back to Basics.”
CONTENT CREATION
On the opposite side of dividends sit royalties. It doesn’t take much money to start receiving royalties; however, it takes time and energy. You have to produce content that people find valuable. I compare dividends and royalties in this article.
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There are multiple ways to earn royalties, so everyone should find something that suits them. Yes, it takes some time to build an audience; however, every single day is new with content creation. Create content daily, and you will amaze yourself at how fast your skills increase.
The article “What Type of Home Business Should You Start 4: Content” gives you a rundown of the six types of content you can create to produce sweet, sweet royalties.
COIN-OP MACHINES
If you have $3,000 to $10,000 you can invest, you can buy a machine that passively makes you a great return. Not everyone has this type of money nowadays, but you may want to find it somewhere.
The three types of small coin-op machines are arcades, ATMs, and vending machines. Yes, it may be challenging to find a location to put these machines, but is life supposed to be easy?
Inflation vs. Passive Income 2
Many mom-and-pop locations would love to have at least one of these machines. Be creative, find a way to fund your idea, and make it happen. The book “Passive Income, Aggressive Retirement” explains the coin-op business in greater detail.
RENT YOUR CAR
If you love your car, this idea is not for you. If you want to become rich, this method is up your alley.
You can rent your primary vehicle or a second vehicle on sites like Turo—even turning this idea into a full-blown business. The book “Turo, The Modern Side Hustle” is a great place to start.
EXPAND YOUR JOB
Everyone has some type of job skill. People are looking for your skills on sites like FIVERR and Upwork. These side gigs are a great way to fund your dividend portfolio.
Eventually, we want to use our skills to become a consultant, coach, or trainer. This gives us maximum flexibility with our time and clients. Yes, it takes time to establish these business models, but you have to start somewhere.
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The best time to start a business was ten years ago; today is the next best time. By freelancing first, you can begin to build your client base. Thus, when you become an independent contractor, you’ll have an audience.
CONCLUSION
Hopefully, I gave you an idea or two that you can pursue further. Life is a marathon, not a sprint. Trust me; I spend 4-5 hours a day writing and creating, with little financial gain. However, in five years, I will have an abundance of income.
You have to put in the work today for the results tomorrow. I make a lot of money in my military career today; however, that wasn’t the case when I joined in 1999.
I had to form a long-term outlook to get the results I have today. Everything you do today will take time to build for tomorrow. We call this “compounding,” and it is massive. Let your dedication, discipline, and hard work compound into something great for tomorrow.
Not only will you beat inflation, but you’ll gain confidence, skills, and satisfaction from your efforts. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. All Right Reserved Military Family Investing
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