If you have a million pounds of cold, crisp cash and you don’t want it getting stolen or damaged, then you can simply bring it to the bank or lock it in a safe. Right?

Perhaps. However, even the most impenetrable vault cannot protect your money from one dreadful threat: inflation.

You can withdraw your money from the bank as perfectly crisp as they were before, but with inflation, its value will not be the same.

What is economic inflation and how can investing in property protect my assets from it? Let me explain this in today’s blog.

Understanding Inflation

Due to certain changes in economic conditions, currencies can sometimes decrease in value, sometimes drastically in just a short span of time. When this happens, it results in an apparent increase in the cost of goods and services. This phenomenon is referred to as Inflation.

Inflation is never welcome news to many investors as it depreciates assets including stocks, bank savings, and everyday cash.

Importance of Asset Diversification

Diversifying assets means you distribute your investment across multiple markets. It is a strategy used by many experienced investors as a layer of protection against volatility.

Though Diversification, you avoid dependency on the performance of a single industry. If ever one investment slides downward, you have less risk of losing all your assets.

How can property investment protect my assets against Inflation?

It is shared wisdom among experienced investors that property assets are less prone to volatility. While stock shares can rise and fall on a daily basis due to various factors, properties are more likely to retain and even increase their value. In fact, many successful players in the stock market have investments in properties too.

Unlike other tangible assets such as cars, gadgets, or equipment, properties tend to appreciate rather than depreciate in value.

Historically speaking, property value rises gradually regardless of economic conditions. Data even show that property prices can increase more during inflation periods. Last year alone, the UK recorded a nationwide appreciation rate average of 13.2%.

If you are planning to invest in property, read my recent blog on how to find the best locations with high appreciation potential.

While gradually increasing your asset value, you can also utilize your property investment by operating it as a rental business. You can choose to lease it long-term through a rent-to-rent strategy or short-term as a serviced accommodation.

Read my previous blog, Starting A Property Rental Business – Short Vs. Long Term Lease.

Is there any disadvantage?

Despite all the benefits, you also have to consider the potential downsides. If you channel your funds to property, you have to understand that this is a less liquid type of asset. Unlike stocks, you cannot convert it back to monetary form right away. Reselling can take several months.

Before you go…

There is so much more that I want to teach you about property investments. Click HERE to get my FREE e-book today!