The Bureau of Labor Statistics released new inflation figures this week.
They showed an 8.5% rise in consumer prices over the past 12 months.
This affects your wealth in two ways…
First, you need more money just to get by.
Bloomberg estimates that the average U.S. household has to spend an extra $5,200 this year – or $433 a month – to keep up compared with a year ago.
Second, you need higher returns as an investor just to stay even.
With inflation where it is today, we have to make an 8.5% return on our investments just to keep our buying power intact.
That’s why today, I (Chris Lowe) am putting a time-tested strategy for beating inflation back on your radar.
It’s something the ultra-wealthy have done for centuries. It’s simple to follow. And it allows you to sleep easy, even if inflation keeps rising.
Before working here at Legacy Research, I worked alongside newsletter industry legend Bill Bonner at his Bonner & Partners Family Office advisory.
It focused on helping wealthy families hold on to their wealth. Not for just their lifetimes… but for generations.
We used to meet these families every year at the Chateau de Courtomer, Bill’s 350-acre estate in Normandy, France.
At one of our events, I asked a German fellow in his early 70s who’d arrived in a gleaming Bentley how his family had preserved wealth over generations.
He answered, “A third, a third, a third.”
You divide your portfolio among three “hard assets.”
These are assets that have fundamental value and are hard to produce more of relative to their existing supplies. So they resist inflation.
This won’t bring you riches overnight. But it’s not supposed to…
It’s supposed to keep your wealth intact through the worst the world can throw at it.
And you don’t have to come from a wealthy family to protect your wealth this way. It’s easy to do… no matter your net worth.
And that makes sense, because these are three of the world’s hardest assets.
Gold is expensive to dig out of the ground. And unless we figure out alchemy, there’s only so much of it on Earth.
Fine art is scarcer than gold… and harder to produce more of.
Land is also scarce. As Mark Twain put it, “Buy land. They’re not making it anymore.”
Each of these assets is a great way to protect against inflation. Together, they supercharge that shielding power.
People have been using it to protect their wealth for thousands of years.
Today, most folks don’t own much gold. But that will change as inflation drags on and more people seek the refuge of hard assets.
Just look at what happened during the 1970s. Spiraling inflation marred the decade.
That coincided with one of the greatest bull markets for gold.
Gold began the decade at $35 an ounce. And it hit a peak of $875 an ounce in January 1980.
The simplest way to buy gold is through a gold-backed exchange-traded fund (ETF).
A good option is the Sprott Physical Gold Trust (PHYS). It stores gold bars allocated in your name in vaults at the Royal Canadian Mint.
For centuries, the ultra-wealthy have used art to grow their fortunes and increase their status.
And it continues to keep them ahead.
Since 1995, for instance, the value of famous painters’ art has gone up 14% a year. That compares with an average annual gain of 9.5% for the S&P 500, including dividends.
Of course, it’s not easy to know your way around the fine art world. I don’t. And even if I did, I wouldn’t have enough money to buy the most sought-after pieces.
That’s why a recommendation Teeka Tiwari and his team made at our Palm Beach Letter advisory caught my eye.
It’s called Masterworks. It allows you to buy shares in hand-picked multimillion-dollar paintings. That makes it an easy way to get exposure to art in your portfolio.
(Masterworks doesn’t let most folks sign up immediately. It puts potential new clients on a waitlist. But if you’re a paid-up Palm Beach Letter subscriber, Teeka has secured you a special “skip the line” pass. You can catch up on how to use that in your Da Vinci Factor special report here.)
Like fine art, this is often tricky for regular investors to buy.
Land is pricey. And it typically requires a lot of management.
That’s why I spotlighted Gladstone Land Corporation (LAND).
Our natural resource investing expert at Legacy, Dave Forest, has been recommending it to his readers as a way to get exposure to farmland.
Farmland is among the best types of land to own because it’s productive and throws off a yield.
But running a farm is hard. Most folks don’t want to do that.
Gladstone owns and operates income-producing farmland for its investors.
It’s a real estate investment trust, or REIT. That’s a type of company that trades on public stock exchanges like a regular stock.
That’s not how most old-money families do it. They tend to own land directly. They can afford it.
But owning shares in Gladstone is a better deal in three important ways… Again, you don’t have the hassle of farming the land yourself. Plus, you can buy and sell REITs anytime you want. And they offer more diversification than a single farm.
Gladstone owns 127 farms, spanning 94,000 total acres across 13 U.S. states. Its land is valued at over $1 billion and is 100% leased.
It even pays a dividend yield of 1.4%.
As a Legacy Research reader, you’ll likely also have a chunk of your wealth in the tech stocks Jeff Brown recommends.
You also might’ve speculated on the cryptos and pre-IPO (initial public offering) deals Teeka recommends.
And you may also have a stake in the stock warrants Dave recommends at our Strategic Trader advisory.
These are all great ways to really move the needle on your wealth.
But you want to play defense as well as offense… Especially with inflation on the rise.
So take a leaf out of wealthy families’ playbook and add some gold, fine art, and land to your portfolio.
They’re time-tested ways to protect your wealth over the long term – long enough for even your kids and grandkids to enjoy it.
For more on how to protect your wealth from inflation, check out the special report my team and I have put together here.
It contains insights from Teeka, Jeff, Dave, and the rest of the team. And it’s free to download and keep, no strings attached.
Regards,
Chris Lowe
April 14, 2022