The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

Two Big Inflation-Outpacing Investments for Whatever the Future Holds

This might cause you to do a double take, but, buy a house! If you can afford it, buy two.

What? I hear you say, “Weren’t you just telling me that buying houses was what got the bubble going in the first place?” True. But here’s the catch.

If you’re going to outpace inflation, the best thing you can do is put dollars into hard assets. Houses are hard—and rentable—assets. So is farmland. We like both in times of inflation.

The catch: only buy what you can afford. We’re not talking house-flipping here. What you want to do is buy and hold . . . and hold some more.

Let’s look back to our last big inflationary period: the 1970s.

Say you bought a modest single family home in 1972 for $30,000. Just three years later—after inflation rates spiked to 12 percent—you were sitting on a $39,000 home. By the end of the decade, the net worth of your house had more than doubled to $64,200.

Farmland too, offers a great inflation hedge. You might say farming is the only ever-growing industry by demand. You can cut back on a lot of things, but eating is the sterling human need. And as countries around the globe have population explosions, regardless of economic conditions, we’ll need more food.

Consider just the tough times of 2008. Farmland returned investors 15.8 percent—trouncing both S&P returns and inflation.

Going back over the long haul there have only been two brief occasions when farmland offered negative returns: the 1930s ...