Inflation and Market Volatility — Why Real Assets Hold

Inflation and market volatility. Two things that are on a lot of investors' minds right now. I want to give you a framework for thinking about your capital when inflation is rising and markets are swinging, and then explain specifically how real assets, the kind we invest in, behave differently from what most people hold. Here's the core problem with inflation. If your money is sitting somewhere earning 2% and inflation is running at 4%, you're losing purchasing power, meaning your money buys less and less over time, even though the number in your account is going up. You're not even breaking even. You're falling behind. That's the quiet erosion that inflation causes, and it's one of the most important things to understand about long-term wealth building. Stocks are often the first answer. Over the long run, equities have historically outpaced inflation. But they come with volatility. Your portfolio can drop 30% in a year, and for investors at or near the income or retirement stage of their investing life, that kind of swing is genuinely disruptive. Bonds have a structural inflation problem. A fixed coupon on a government bond doesn't adjust upward when inflation rises. If you locked in 3% and inflation runs at 5%, you're losing ground every single year. Real estate, specifically the workforce housing, senior housing, and self-storage we own, has a natural inflation hedge built in, meaning it holds or grows its value as prices rise. Here's how that works. When inflation rises, construction costs go up. Labor, materials, permits all get more expensive. The cost to build new housing goes up. That means fewer new units come to market and the existing supply becomes more valuable. People still need a place to live, so demand stays constant even as supply tightens, and that pushes rents up. Our income rises, which means your returns are supported by real economic dynamics, not just hope. Property values also tend to rise with inflation because physical assets hold value in a way paper assets simply don't. Now, FreedomNotes are a fixed-rate debt instrument, meaning your return is set at the time you invest. So if you're earning 10% and inflation runs at 4%, you still have a 6% real return, meaning your money is growing in real purchasing power, not just nominally growing on paper. That matters. Compare that to cash. In an inflationary environment, cash in a savings account is losing value every day, even if the balance looks the same. With FreedomNotes, your capital is working and earning well above the historical rate of inflation. Market volatility is where real estate-backed investing has a really great story to tell. One of the things I hear most from investors who come to us after a period of stock market stress is that they're tired. Tired of checking their portfolio and seeing it down. Tired of making decisions out of fear. Tired of feeling like their retirement security is tied to a news cycle. I call this the search for calm money. Calm money is capital that doesn't panic. It doesn't have a ticker symbol. There's no CNBC segment that causes it to move. You invest it, it earns, you get on with your life. That's what private real estate backed investing can be. And that's a quality of life difference for a lot of investors. That stability is not an accident. It comes from two things. First, private investments are not subject to public market sentiment. Their value doesn't move based on what traders are doing at 9:30 in the morning. Second, we invest in needs-based assets. People need housing in recessions. They need housing during pandemics. They needed housing in 2008, in 2020, in 2022. Every single one of those periods when markets were in chaos. There's not a point in time ever to date that we have not paid our investors exactly what was owed them through every one of those environments. And I'm not saying real estate is without risk. I'm not saying FreedomNotes are risk-free. I'm saying that the type of risk and the type of stability is fundamentally different from what you find in public markets. And for investors who are looking for a place to put capital that holds its ground while everything else is swinging, That difference matters. Calm money never panics. And right now, a lot of investors are looking for a little more calm. In one of our next videos, we talk about legacy investing, how to structure investments that build and protect wealth across generations. I hope this was helpful, and I hope we have the opportunity to work together. Head over to chatwithfreedom.com and let's talk about what that calm could look like for your portfolio.