How to protect your wealth when money loses value

When governments weaken their currency, prices rise, and assets become more valuable understanding this can help your family avoid losing buying power and build wealth.

When a government weakens its currency, it makes its money worth less (worthless?) by printing more or lowering interest rates. This means your own cash buys less, overseas imports cost you more, but assets like property and shares usually go up in value.

1. Cash loses value when more money is printed

• When governments print more money, each dollar buys less - that's why your groceries get more expensive.

• If the Aussie dollar drops 20%, your cash can buy 20% less, but your mortgage, groceries and electricity bills don’t shrink. This is what's happening with the US dollar and whatever happens to them, happens to us.

• Wealth Impact: Holding too much cash means your savings lose value over time. Cash just can't keep up.

• Action: Don’t keep all your wealth in cash - consider spreading it across different assets.

2. Assets like property, shares, gold and Bitcoin rise when the dollar falls

• Real assets (property, shares, gold, Bitcoin) usually go up in value when the value of the dollar goes down, because it takes more dollars to buy the same thing.

• In the past, when the US dollar dropped 25%, property and shares soared, and Bitcoin rose even faster.

• Wealth Impact: Owning real assets helps your wealth grow faster than inflation eats it away.

• Action: Review your investments - make sure you own some assets that can rise with inflation. Want some homework? Ask ChatGPT to tell you about gold and why it has been a 'store of value' for thousands of years.

3. The wealthy buy assets, not just hold cash

• The rich get richer during currency drops because they own things that go up in value, while the poor get poorer by holding cash. It's all complex and those in the know can take steps to protect their wealth. Sad for the average family who do not seek help, but it's true.

• Families who owned property or shares during past currency drops saw their wealth multiply, while those with only cash lost buying power.

• Wealth Impact: Owning real assets is the key to growing and protecting family wealth across generations.

• Action: Don't bury your head in the sand - pay attention. Shift your mindset and think like the wealthy and focus on building an asset base, not just saving cash.

Don’t wait for your savings to lose value - take action now by reviewing your finances and investing in assets that protect and grow your family’s wealth.

More soon.