Tuesday 7 December 2021

Most Effective Hedge Against Inflation


Earn More.

No. I'm not kidding!

Let's start at the country level. Throughout our human history, there were many bouts of high inflation. Yet humanity still survived. 

Of course there were countries that suffered and fell into oblivion, then there were countries that thrived.

If you not a fan of history, but you love travelling, next time you visit those countries that have lots of zeros on their dollar bills, try asking the tour guide or locals how they, or their parents/grand parents, survived through it.

Who "prospered" from high inflation, and who got "clobbered"...  I'll bet that will be more illuminating than reading "theories" and "opinions"!

Especially youths who have not experienced inflation of the 70s. 

Wait. I so stupid! Just ask your parents or grandparents also can! Travel not needed.

If a country can export and earn more revenues than the what they have to pay in imports, does inflation matters?

Just look at oil producing countries. If they can raise oil prices in an inflationary environment, would they be complaining?

At the corporations level, you know you may have to update your resume when the company you working for is practicing austerity in an inflationary environment...

That meant the company can't raise prices despite higher input costs. It has no pricing power.

But if you working for Apple or Microsoft, customers may complain about higher prices, but they still will buy as that's the power of having fan boys and girls as your customer base. For Microsoft's "captive customer" base , unless you are a techie who can switch to Linux, switching to Apple is "lagi" more expensive!

And that's the same for boring and defensive companies like utilities, telecoms, and public transport... Unless big daddy is willing to subsidise us by "stealing" from our grandchildren, what can we do as consumers facing higher prices?

Utilities and telecoms no way out. At best we use less; practice Save More. Only public transport we can do something about it. Walk or cycle to work anyone? We can "spin" it as being environment friendly!!!

"Look ma! No carbon footprint!"

Now comes to the individual level. Inflation sucks for those who are on a FIXED income. And those whose pay raises are lower than the inflation rate.

But if you are a high performer, you are not phased by it. Not when you are getting double digit pay increments annually like 10% or more... And 40-50% promotional pay increases every 2-3 years!

True or not?

That's where most of us in this community comes in. Why do we invest or trade? 

Because our day job sucks lah! Or we suck at our day job; don't hit the face!

No choice. The Save More route is out for us; that's for the high income earners. 

Hence Earn More it is!

Talking about Earn More, I would like to give a shout out to Kevin of Turtle Investor:

Alternative Income  (I like this post as few commercial bloggers are so transparent. Read the part about active efforts on his part)

There! If our alternative incomes are more than our regular day job, whose afraid of a little inflation?

Ah! How to Earn More if you want minimum effort with maximum reward? And you not really into craftmanship that sort of thing?

Buy Toto?  

I must write to Singapore Pools for affiliate marketing commissions! I am plugging Toto so often, at the very least, buy me a drink!


  1. Smol,

    Lol! When I just saw your blog title, my first thought was "a job"!

    Practically speaking, a job will hedge inflation better than investments ... even hard assets like gold, commodities, wide-moat companies, cryptos etc .... becoz volatility will throw most off the train at many times along the way.

    Only a job (and maybe rental properties) will have the stability and the roughly inflation-matching income for a typical person to hold through.

    Which is why high inflation is so tough for retirees. Yikes!

    Then again my gut feel is that inflation this time round will be similar to 1980s more than 1970s. Still pretty high at average of 3.5% in the US, but not the persistent high single digits & double-digit spikes of the 70s.

    We've been spoilt by last 30 years of globalisation.

    1. Spur,


      If one is still climbing up the mountain, let's not throw away the baby with the bath water...

      Yup, Singaporeans have been spoilt. We don't have to crack our heads what currency or currencies to denominate our wealth in - unlike our neighbours. One less hassle to worry!

      With China exporting deflation globally since opening up in 1979, most developed countries globally have benefitted, especially those who can Earn More.

      But everything has a price.

      Globalisation is not fun for US or European workers in factories that have moved to Asia...

      But if they bring the jobs back to US, would US consumers willing to pay more?

  2. My first thoughts is:


    1. Sillyinvestor,


      If got heavens or gods protect, who is afraid of anything?

      But then again...

      I'm atheist :(

  3. Hi Smol

    With wfh during this pandemic, digitalization has sped up and one can step out of their comfort zone within their comfort zone in the home like example you used in Kevin's case.

    Ironically, some corporate settings could not really embrace that when comes the real thing, one very good example will be hardcopy documentations required for house keeping( This is one of the way to sieve out whether this company is really embracing digitalization or just cock talk) One thing they are supporting going green, but another thing they are printing out loads of hardcopies paper for housekeeping?

    Some use digitalization to increase earnings and learn new things along the way( All these takes time and effort ). Some use digitalization for pure entertainment purposes, while some resist digitalization as they fear to be obsoleted.

    1. Small Time Investor,

      Yes, more paper has been printed and wasted due to "housekeeping" during the transition to digitalization!

      During my first 9 to 5 office job at Montgomery Ward as a Buyer 27 years ago, I was a so perplexed to discover my assistant had to print out all our email correspondence!?

      Some more 4 copies at one go in those ancient Dot-Matrix printers.

      White copy for me, pink one for my assistant, blue one for the Managing Director, and green one for the Office Receptionist!?

      The MD practice BIG BROTHER watching over us. Talk about micro management! Once in a while, he will "lecture" me on how to write "proper" emails. Thank goodness I don't have to write like that ever again once I left the company ;)

      OK, but why do the receptionist need a copy? Backup of backup? Talk about "kiasi" and "kiasu" protect ass corporate behaviour!


      Snake oils like us have to adapt to survive. I was so impressed with the media savvy real estate agents using YouTube to sell properties!

      Even youths are ditching blogging by switching to making YouTube videos to "lelong" financial snake oils ;)


  4. Thanks for the plug ha! The answer is really that simple - work harder and smarter in order to earn more. Most people do want max. rewards for min. efforts, so it's really not that impossible to get ahead of them if our body, heart and mind are willing.

    Burning a candle at both ends is no joke! Those of us who have been through it will understand ;)

    1. Kevin,

      You're welcomed!

      You are one of the coolest commercial bloggers out there ;)

      Tell me about it!

      I'm like a duck. People see me taking it "easy" on the surface.

      What they don't see is me peddling furiously under water. If not, how to run circles around graduates with my O'levels?

      Success is what we are willing to sacrifice to achieve it ;)

      Its just another way of saying in women's speak:

      There are no ugly women; only lazy women.


Related Posts Plugin for WordPress, Blogger...