👹 How To Beat The Inflation Monster In 2023

What’s on the Menu 🍴

The middle class is disappearing, and it’s becoming feast or famine for many hard working folks out there.

Our mission at the Daily Dough is to help you fill your plate with enough wealth to live your dream life…

And that all starts with helping you outrun the inflation monster!

So, here’s what we’re serving up for you today:

• How To Beat The Inflation Monster In 2023 👹

• Student Loan Borrowers Get “Stimulus” 🎓

• What Will September Bring? 🍂

Today’s newsletter is a 5 minute read.

How To Beat The Inflation Monster In 2023 👹

Remember your grandparents reflecting on the good ol’ days when a loaf of bread was a Nickle?

Ever wonder why that same loaf of bread is $2.50 today?

That, my friends, is inflation in action.

Inflation measures the rising cost of goods and services over time.

Imagine you've got $100 stashed under your mattress. Ten years from now, that Ben Franklin won't get you nearly as far.

Why? Because inflation eats away at how much stuff your $100 can buy.

How's is inflation measured?

A buffet of macroeconomic data, including Consumer Price Index (CPI) and Producer Price Index (PPI), serves up ideas of how fast prices are rising or falling.

Unfortunately the “official” numbers don’t often reflect what people are feeling in real life.

And some of the most expensive things in our lives (e.g. housing, healthcare, education) have gone up faster than baseline inflation.

Taming the Beast 🐉

So how do you beat the inflation monster?

You invest!

And not just in get-rich-quick stock tips, but in a diversified portfolio designed to outpace inflation.

Here's a CliffNotes version of your game plan:

1️⃣ Accumulate Assets Like a Squirrel with a Nut FOMO 🐿️

Here's the deal—own stuff that appreciates faster than inflation itself.

The S&P 500 has averaged a yearly return of about 10% since its inception.

Real estate? A solid 3-5% annual growth.

Bitcoin is the wild child, soaring 200% annually on average, though it's got more mood swings than a teenager.

Point is, park your money where it'll grow faster than weeds in your grandma's garden.

2️⃣ Max Out Your Cash-Flow Machine 🏧

You know what doesn't beat inflation? A brand-new luxury car that loses value faster than you can say "depreciation."

Focus on generating more cash flow—either from a job, side gigs, or smart investments. Once you've got that money printer humming, then splurge a bit.

Until then, keep the champagne on ice and double down on your income streams.

3️⃣ Be a Tax Ninja 🗡️

Tax efficiency is the unsung hero of personal finance. Take advantage of tax-sheltered accounts like a 401(k) or a Roth IRA.

No need to offer up more to Uncle Sam than he legally demands. Minimize your tax burden, and you’ll have more dough to invest or to spend on inflatable pool flamingos, or whatever floats your boat.

4️⃣ Keep a Weather Eye on the Horizon 🌦

Stay agile. Markets swing, regulations change, and opportunities emerge. Keep your eyes peeled and be ready to pivot your strategy.

Flexibility in your financial planning is like the Swiss Army knife in your camping gear—versatile and invaluable.

Get Started ASAP

Inflation may be a pest, but it's not unbeatable. Invest to beat it, then you're free.

And the sooner you start, the more ammo you’ll have to defend yourself against the inflation monster.

Until next time, keep making that dough rise! 🍞💰

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This is a huge step in getting you one step closer to securing your dough!

Student Loan Borrowers Get “Stimulus” 🎓

We got wind of a new plan to help student loan borrowers.

After a 3 year pause on student loan payments and failed forgiveness, the administration is lowering payments for people on income driven repayment plans.

It’s a pretty substantial boost for low income individuals, who may have their payments completely eliminated to $0!

It’s called “The Saving on a Valuable Education (SAVE) Plan”.

It’s available for qualifying federally backed loans.

While student loan payments being based off of income is nothing new, here’s what IS new:

1. Income exemptions will be raised from 150% of the poverty line, to 225%. This will allow you to make more and quality for lower or $0 payments.

2. Interest that isn’t covered by your payment will NOT accrue and increase your balance.

3. As of summer of 2024, payments go from 10% of disposable income, to just 5%! So, borrowers will pay much less.

4. There will be an option for forgiveness after 120 payments for those with original balances of $12,000 or less.

As the market has been worried about how the consumer will handle payments resuming, this comes along just in time.

It’s very clear that it will keep money in the pockets of low income families.

Is it enough to save the consumer from spending less in the economy?

Is it enough to keep stock investors buying the dip?

To be determined… but, it’s hard to see this not helping.

What Will September Bring? 🍂

Today marks the start of September and the official start of fall!

Besides leaves changing color, pumpkin spice lattes, and school back in session, it also means that we’re moving into a busier and potentially more volatile period in financial markets.

Traders & executives are back from vacation and the summer lull is transitioning into crunch time before the holiday season arrives.

We’re always mindful of seasonal patterns in markets, especially in a year like this one where there’s so much uncertainty around interest rates, inflation, real estate, and consumer spending.

And judging by actual data, September is historically one of the worst months for stocks:

As you can see in the table above of S&P 500 index monthly returns since 1990, September is the only month where the median return is actually negative!

September also has the worst average return and the highest instances of negative returns.

Now it’s important to note that it’s still very close to being 50/50 between positive and negative returns for SPY in September historically.

But at least on a relative basis to other months, September doesn’t look so hot.

What could September 2023 look like?

We don’t know for sure, but here are some possible sources of volatility:

• Federal Reserve meeting (Sept. 20)

• CPI data that could come in hotter than the previous two months (Sep 13)

• Buoyant government bond yields

• Mortgage rates hovering at 7% while existing home sales are falling

• Concerns about commercial real estate & regional banks

• Bitcoin giving back gains despite recent court battle wins

• Binance in the regulatory crosshairs

• Credit card delinquency rates still rising

• An active hurricane season which could push energy prices up further

We don’t highlight these areas to create fear or because we think investors should make drastic changes to their portfolios.

We just want our readers to be aware and prepared.

If anything, we welcome market corrections and try to prepare our investment shopping lists should the market go on sale.

It might even turn out that this September ends up being a bull run or a total snoozefest.

No matter what happens we’ll have your back and make sure you stay better informed than most! 🙏

We Talk Money Episode 120 🎙️

This week we saw a huge step forward for bitcoin…

And in this week’s episode, we’re diving into the question - “Does a bitcoin ETF change everything?”

Also, you’ll learn:

• What is the macro data saying about a recession?

• Why do stocks keep trucking higher?

• Where does the SEC attack next?

• And much more!

Food For Thought 🧠

Rising prices on every shelf,
Squeezing budgets, draining wealth.
Groceries high, and rent's not kind,
Inflation's monster lurks behind.
Yet there's a way to beat the beast,
Investing well, to say the least.
In stocks or bonds, perhaps in land,
To hold your ground, to make a stand.
Inflation sucks, but here's the key,
Invest to beat it, then you're free.

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.