#ATCF | What to do during inflation

Vance Crowe [00:00:00] Welcome back to the podcast. I'm glad you're here. In this as the Crow flies episode, I want to try and offer some ideas about what you can do if you really think inflation is coming. You know, before I talked about the danger of how inflation can prompt people to join mobs and get involved in ideas and political will that becomes really dangerous. Now that can paint a rather bleak picture and rather than just stay bleak, I want to talk about, well, what can I do? Now, this is not meant to be investment advice. I don't know what you should do with your 401k. I don't know if you should buy property or sell it or if you should prepare yourself for opportunities that may come. But I can tell you that I personally feel really bearish. I often get this urge to just sell everything, and I have to temper that with, well, if I had a pile of cash because I've sold out of these things that I've been investing into for over years, what am I going to do with that cash? And so as I think through these things in my own portfolio and trying to work with my family to figure out, hey, what, what are the right decisions forward? I wanted to offer some things that I am certain are good investments, things that no matter what happens with the future, you can be confident that this will help you in an inflationary environment. The first one is to dust off your skillset. To really think about what is it that I am good at or what is it that is something that I used to do that if I were really dust off those skills, no matter what happens, they would be valuable. It could be something as simple as an old job that you had when you were a kid. Maybe you mowed lawns or you were involved in landscaping.

Vance Crowe [00:01:34] It also could be that you know how to do bookkeeping or you know how to do some of those tiny tasks that right now aren't great skills for you in your white collar job or in the world that you're living in. But it's always good to make sure that those skills are fresh and sharp and you're able to use them in a highly inflationary environment. The work environment changes really quickly and it's good to know what skills you have, not to mention the fact that by having those skills you'll feel more confident come what may. The next thing I would say is it is very important that you be mindful of the commitments that you're making right now. You know, you go to sign something like a lease or a a loan, you really need to understand the fine print of that. If you are going for a loan, it might be that you're getting a floating interest rate. Now, floating interest rates can be really seductive because you can come in and say, look, this person is willing, or this bank is willing to give me a large amount of money and look how low that interest rate is. Like I can cover that. I can buy that car or I can invest that into my house or even a business. But the real challenge is if it's a floating rate, that rate could go up really quickly, well beyond anything you can imagine. And if you really wanna have your hair turn up on end, just go to some of those farmers that were caught in the savings and loan crisis where they had loans out at something like six or 7% and suddenly it went to 13, 14, 20%. These people found themselves in a situation where they couldn't pay for things and they had to liquidate not only the thing that they had bought with the money they borrowed, but far, far more than that in order to be able to pay back with they owed.

Vance Crowe [00:03:15] Another thing that you should be careful about with signing is if you're signing a lease, there may be terms in that lease that say, Hey, some of our costs may go up and if they go up, we are gonna spread that cost among all of the people that have the lease. Maybe that's something like snow removal or the cost to heat and cool the building. Now you do have to come to some good arrangement with your land landlord, but you wanna be careful that you don't take on too much liability by that, that we really don't know what it will cost to plow snow or get your, your electricity to your office. But you wanna make sure that you understand just how much that price can go up. I know personally that I was able to work with my landlord and come to an arrangement that they wouldn't have to cover all of the prices if they went up, but that it wouldn't kill us if if, if those prices go up. The next thing is, I think you should learn about Bitcoin. Now, there are many cryptocurrencies out there, but I believe that Bitcoin is the canonical one. I think it's the one that if you know and understand that one, you can judge for yourself the value and utility of all of the other cryptocurrencies. Now, there's one way to learn about Bitcoin is just to hop on YouTube. There's an endless stream of videos, people that can explain to you what is the public key and private key and how does it work and what is a blockchain. And those are good and I think maybe are a great first step. But the next thing I would say about learning about Bitcoin is to go out and try and buy a small amount of them. It could be something like $25 or $50, something you're totally prepared to lose.

Vance Crowe [00:04:50] Maybe think of it as the amount that you would invest in a class to learn about something that may be really important in the future. The value of going out and actually buying a Bitcoin is that suddenly you will find out, Hey, there's a bunch of things about this that I didn't know, but I didn't even know to ask those questions. And so I would recommend buying a small amount of Bitcoin on an exchange and then moving that Bitcoin from a public exchange to what's called a cold wallet. A cold wallet just means that you control both the public and private key, and then if an exchange goes bankrupt, as we've seen in the news, they can't just take all of your Bitcoin to pay off their debts. So by doing this, you'll get all sorts of questions. You'll run into things that make you nervous or that you don't understand, but there'll be some glimpses of things that you'll say, oh aha, I get it. I understand that now and quickly, you'll be able to stack up that knowledge to decide, Hey, is this something that I'm interested in? Is this something I wanna have or not? Now, I don't know what the answer is to you for you about that, but it is always valuable to have a deeper knowledge. So many times when I talk with people and the kind of subject of Bitcoin comes up, people always kind of roll their eyes or sigh saying, oh, I wish I would've gotten in that earlier, imagining that it is way beyond the the right decision to get into. But I think if you go out and buy a small amount and move one to a cold wallet, you'll discover, Hey, this was worth knowing about. And now you can make an educated decision.

Vance Crowe [00:06:22] It's not too late. In fact, I would say this is just the beginning. Now, the next two things that I think are really important for hedging against inflation may seem a little cliche or trite, but I think they're actually probably the two most important ones. The first is your health. You need to be fit and healthy going into a strong inflationary environment, if there is one thing that will skyrocket, most certainly it is the price of healthcare. And that is because there is a limited amount of supply, how many doctors and nurses and people that can see us, but the demand is going to be infinite. There are always people getting sick, people that need care. And so that price can march up and the government will certainly get involved and be offering to do more things like Medicare and Medicaid, and that will only continue to drive the price up. So one way you can protect yourself is to finally say, Hey, I'm gonna figure out how to lose that weight, or I'm gonna make sure that I can get up and down from the ground comfortably, or that I can walk a certain distance. Once you get to that first level of like, Hey, this is the bare minimum that I want to get to, it'll be easier to take that second, third, and fourth step, your health is deeply important. If you wanna be resilient in a time of inflation, you can be no good to your family if you're sick. And it's often said a healthy person wants many things, but an unhealthy person only wants one thing, and that's their health. So do what you can to be as healthy as possible during this crazy time because it will only help you, not only because it will lower your costs of healthcare, but a healthy mind is a sharp mind.

Vance Crowe [00:08:01] And then finally, I think the fifth and most important thing that you can do for inflation is to really focus on having a strong family. Your family is what will help you. When things get really, really rocky, they are the network that you can rely on to share goods, to be able to lift the burdens of one another, to be able to make sure you're looking out for one another. Now, you may be looking around and saying, well, I don't have a close knit family, or, oh, that's just not gonna work for me. But first I would say try. You know, having a spouse that you get better and better at being able to have conversations about money is a really valuable thing. And almost no couple is automatically good at talking about money right outta the gate. And you have couples that have been together only during plentiful times. And so if you've not really developed the skill of being able to talk about money in order that you are able to control some of your impulses, some of your egos, some of the things that keep you from having good conversations, I know that I personally can get really defensive and I can say, Hey, I made these decisions and you should just agree with them. And it took me years of talking with my wife to say, Hey, this is how we share ideas. This is how we experiment. This is how we think about new things, and this is how I understand she makes decisions. Then what information I can give her so that she can come to either the same conclusions that I have or she can point out the flaws in my own decision making. It is really important that you start with that spouse relationship, but also engaging your children, helping them understand what's going on.

Vance Crowe [00:09:38] You don't necessarily need to frighten them or make them bear the burden that you have going on, but certainly kids know what's happening. So the better you can have conversations with them about what's inflation, what's happening with your family, why you're making the choices that you're making, that's all the better. And then look at your extended family trying to figure out how can I build relationships with my in-laws, with my siblings, with my parents, with my grandparents, such that they know that I'm willing to contribute to the larger pool of our family and that some days I may need to draw from that larger pool. And I don't just mean money. I mean really the ability to lean on people during tough times to be able to rely on them for things like childcare or advice and being able to talk with them confidently. Relationships with families don't just happen automatically. Most of the time. It takes one or two people in a family that really buckle down. They swallow their ego and their pride and they get through conversations that are difficult and they build those strong relationships. And if there's one thing I've learned from the Legacy Interviews, it is that strong families can be resilient through some of the most insane circumstances that you can possibly imagine. And my final word of advice on this, my mother used to always say that, if you don't have the type of relationship that you want in your life, then go be that for someone else. So if you didn't have a good relationship with your grandparents, maybe look around and say, what role could I play with somebody else that would've filled that sort of grandparent relationship with me?

Vance Crowe [00:11:15] What if you don't have strong relationships with your siblings? Well, is there somebody in your community or your extended network that you could really start to step in and offer to help and try and invite them and spend time with them? If you don't have the family that you want? There is no time like the present to build it because it is those closely built networks that are going to allow you to transcend no matter what happens. Now as the weeks and months progress and we start feeling the pinch of higher gas prices and food getting more expensive, it stops being less of a shock and it starts being more of a reality.

Guest [00:11:53] Just know that there are always silver linings. There are always things that you can do, people you can meet, relationships that can happen, and opportunities that come up even though things are bleak. And I hope you really focus on trying to figure out what can I personally do, rather than just sitting back and saying, well, I'll wait to see what other people do. All right. Without further ado, I'm gonna head out and we'll do another As the Crow Flies episode, you may notice that we are doing more episodes on inflation. Its impacts how it's going on in the globe. I hope you enjoy it. We're gonna continue this kind of in the same way that we did with COVID, and we hope that it helps you and we are always open to feedback on what subjects we could talk about and how we could make these better.