How Inflation Makes You Rich 😳

How inflation can actually make you rich. Most people only see the downsides of inflation, but everything in our world has and goes through cycles and has equal upsides and downsides. So if you only see inflation as a bad thing, that means you truly don't understand the balanced equation of inflation and the equal upside of inflation. However, you have to know how it works. So inflation is the devaluation of both credit and debt, and this is what people don't understand. Inflation is the reduced spending power but not just of credit, also of debt. So stay with me here. So when inflation is in double digits, 10% or more like it is now, most of the population only see money, spending power, the prices of what you can buy. But they don't see the erosion of debt as well as the erosion of credit. So if you have a credit card bill for £10,000 and inflation is 10% a year, within a year, £1,000 of that £10,000 on your credit card bill has actually been eroded by the reduced value of the debt. So whilst inflation erodes the value of credit, it also erodes the value of debt. Now, I am by no way saying go and get loads of credit card debt. Now on to the title of this video: how to get rich through inflation. So if you have good debt— and by good debt I mean debt that buys assets that produce income and go up in value— if you have good debt, inflation pays your debt down for you. Now, by the way, when inflation is in double digits like it is right now, Inflation will pay off your debt quicker than you can pay off your debt, or you do pay off your debt. You know, let's say, let's take a mortgage as an example. So you'd usually get a mortgage over 25 years, and they're usually what's called top-heavy, which means in the first early years you're paying off nearly all interest and nearly no capital, or principal as they call it. And then towards the end of the term, you're paying off nearly all capital or principal and virtually no interest. So at the start of any mortgage, you're usually paying off mostly interest. But when inflation is 10%, inflation essentially reduces the value of your mortgage by 10%, just like it reduces the value of your money. By 10%. So people only usually see downside of debt or downside of credit, but there's an upside of credit and an upside of debt. So if you have high interest rates, that's obviously bad if you've got loans because your interest on the loans is higher. However, if you have cash savings or you lend out money Obviously that's good because you're getting a higher interest. So it's very important to understand about money and finance that everything has an upside and a downside. A creditor and a debtor, an asset and a liability, a profit and a loss. One person's debt is another person's credit, and one person's credit is another person's debt. So if you really want to leverage the power of inflation Invest in assets, put good debt against them, especially while interest rates are still quite low, because they are low relatively speaking, and they're going to go up. So let's say you're going to get a property, put a 70% mortgage on it, um, and make sure that you've got a low enough mortgage and a high enough rent that it cash flows and gives you income, and then High inflation will help you pay down your mortgage for you. Now, I don't actually mean the government do a direct debit into your bank or to your mortgage company. What I mean is the relative spending power, the relative value of your money goes down, just like the relative value of your debt goes down. So, um, the government actually helped me pay off £3.3 million worth of debt in the last 12 months. So look, you've seen me rant every now and again on Facebook Lives— every day— and I've criticized, or at least challenged, the government on some of their policy. And yeah, inflation is really bad for savers, it's really bad for people who have cash assets, it's really bad for people, you know, who don't have a lot of disposable income. And their prices have gone up, their living expenses have gone up significantly. So of course inflation is bad for that, that's obvious. The world's going on about that. But no one really tells you about inflation being really good for debt. Good debt. Well, and bad debt actually pays off your bad debt, but you shouldn't be getting bad debt just because of inflation. So, you know, they say the rich get richer and the poor get poorer. Most people don't understand why. They think it's greed, power, and corruption. This is one of the reasons the rich get richer, because when inflation is high, their good debt loans and mortgages and borrowing against all of their assets is getting wiped down. So make sure that you build assets, make sure that you get good debt against assets, and inflation is your friend, and inflation can make you rich. Because if we have 2 or 3 years of the double-digit inflation, or there or thereabouts, 20 to 30% of the value of your loan will be paid off relatively by the government. That's a huge amount of money. That's one of the reasons the rich get richer and the poor get poorer. So let me know what you think about that in the comments. Look, my mission, the purpose of me living on this planet, my personal vision, is to help as many people get better financial education and knowledge. I want to help the globe be able to start and scale a business, to be able to create income streams, build their own businesses, build online businesses, side hustles, part-time income, full-time income, big-time income. So if you'd love to learn how to do that, um, and you know, you'd like to kind of saddle me up and ride me into the sunset, go and join Rob.team. Rob.team is my educational platform. It's completely decentralized. Complete freedom of speech. It is online, it is digital, anyone around the world can join. It costs less than a large coffee, so no matter how bad inflation or your currency is, you can afford it. It costs one-third of the price of Netflix, and it will help you get better financial education and knowledge, you know. And I do content like this every day, every week on my Rob.team platform— short bits like this and then longer masterclasses. So go and join now, rob.team. Team. Open up a new page on the internet, type in rob.team. Go do it right now because this is just a quick video. I'm going to do a summary, then I'm out of here. So, um, go and join rob.team. Get digitally downloadable, instantly accessible content to help you start and scale a business. Better financial education and knowledge. Make money and make a difference. Passion into profit. Content into cash flow, information into income, multiple streams of recurring income, digital assets. And this is in the form of Zoom live masterclasses with me and my multi-millionaire mentor friends, and resources and articles and podcasts, YouTube video tutorials, you name it, um, live meetups, ask me anything lives, all in rob.team for less than a large cost of coffee and one-third of the price of Netflix. So go join right now. There is no contract, you can cancel anytime, and you can go back and watch hundreds of hours of content going back years. So what are you waiting for? Go join rob.team. Type in r-o-b dot t-e-a-m. rob.team. So Camilla said here also, because of inflation, not only are the prices going up but also the value of the properties are going up. Yes, that is correct. So Look, remember, every— well, everything in life has an upside and a downside, and I believe it's equal. Because, you know, if you think about our ecosystem on Earth, we're perfectly finely balanced. Um, and, you know, a magnet has a, um, a two— a plus, a positive, and a negative. You know, there is male and female. And when you look at finance, every tool and vehicle within finance has an upside and a downside. Credit has an upside and a downside. Debt has an upside and a downside. Interest rates have an upside and a downside. Inflation has an upside and a downside. So when the value of your assets go up, of course inflation is probably slightly artificially pushing that up. That is a factor to consider. So if your assets go up 10% in a year but inflation is 10%, essentially they've stayed the same. This is why it's vital to have inflation-beating assets, because you might think, well, 5% is a reasonable return. Well, when inflation is 10%, 5% is a -5% return. So your assets must beat inflation, which is why cash is trash, which is why savings aren't gonna work right now. Government bonds aren't gonna work right now. Now, if you've got debt against your assets and your assets go up 10%, let's call that net zero with 10% inflation, but your debt goes down 10% because of 10% inflation, you're net 10% better off. So you want to look at the net. Now look, you can't control inflation, and over time inflation's not going to be 10%. It's not the long-term average, just like interest rates are not going to be 1% or 1.25%. That's not the long-term average. But you have to look at inflation from both perspectives. Now, if you don't have any good debt put the light on. If you don't have any good debt, you're not leveraging inflation paying off your debt for you. And like I said, many people bitch and moan that the rich are getting richer and it's not fair, it's greed, power, and corruption. No, it's because they understand how to leverage debt and credit. They understand the power of inflation paying off their debt. And like I said, um, because I've got a portfolio worth tens of millions of pounds um, and I've got less— I think I've got about 60 to 65% debt on those assets. Let's call it— well, you can work out the numbers. I worked out that my accountant, my wife, and my business partner say, don't tell anyone your net worth, it's your private information. By the way, your net worth could be 20 million or 100 million depending on various different factors that the cycle of the market, whether you put goodwill and a multiplier on the value of your companies, etc. But you know what, a lot of millionaires and billionaires don't hold a lot of cash. Why? Because cash is trash. But I worked out in the last 12 months the government have paid off £3.3 million, $4 million of mortgages, relatively for me, because that was 10% of the mortgages that I had in my portfolio at the time. Thank you, government. I have been critical of you at times, but thank you for helping me pay off my debts— my good debts, by the way. Now, don't go and get credit cards just to get 10% inflation paid off. Good debt, not bad debt. Ferdi has said, what assets go up during a recession? Get real. Um, well, I don't know what get real means. This is real. This is absolute fact, and this is very real. And actually, most people won't tell you this. So, um, what assets go up during a recession? Well, um, it's not linear like that. It's not like in a recession ABCDE assets go up and FGHIJK assets go down. Generally, when there is, um, hyper-devaluation of money, hard assets, hard money goes up. So things like gold, they generally tend to go up if there's a revolution, if there's a debasement of currency. Generally hard assets go up, um, or, you know, real physical tangible assets. Watches went crazy through lockdowns, um, classic cars went crazy, art went crazy because they are hard physical assets. But those assets don't produce income, they're just capital. Real estate goes through cycles of, you know, booms and busts and highs and lows, but the general trajectory is up. So it kind of goes up as opposed to up. It's not a straight diagonal line up, it's a wavy line. It goes up and down. However, I don't really care about the capital value of my properties as much as I care about the income. Like, would I rather my property portfolio is worth £100 million but costs me £1 million a year to finance in negative cash flow Or would I rather my portfolio value is worth a pound but it pays me a million a year in income? Now those two, you know, extreme variables are not likely to happen, but the point is I'm more interested in the income than the capital value. Really important. So I don't really mind about the price. And by the way, when the prices come down, the yield tends to go up. Prices come down, rents generally— not always, but generally tend to go up. So actually, I love property in a recession. One, because I can buy it cheap. Two, because rents go up, so the yield is better and the income is better, but the actual capital value can go down. Hope you found that answer useful. By the way, thanks for tuning in, everyone. Um, if you like this kind of content and you like these kind of discussions, um, you get these 10x in rob.team because I do ask me anything live before our Zoom masterclasses. You can actually ask me questions back and forth. I did the, um, 21 Ways to Monetize Social Media live masterclass, now recorded in rob.team. I did the 9— I think it's 9-module 11-hour How to Invest series in rob.team. The How to Automate Your Sales and Marketing masterclass in rob.team. Uh, the Recurring Income 2-Day Summit, you can get a ticket for that in rob.team. So go and join rob.team. Open up a new page on the internet and type in R-O-B .com. Rob as in Rob Moore, my name. Team as in soccer team, football team. Rob.team. Go join right now, won't cost you any more than a large cup of coffee. You can cancel anytime with no contract. One-third of the cost of Netflix. Learn, earn, invest. Okay, quick summary. Please hit the share button while I'm doing this summary because my mission is to help as many people on this planet get better financial education and knowledge. And if you share, that's how you can help me. And if you think I give you good value, that's a way you can give back. Well, of course, join rob.team, but that's more for you than for me. So you can get rich through inflation if you have good debt leveraged against income-producing assets, because inflation wipes down the value of that good debt just like it wipes down your cash and spending power. Because every upside has a downside and every downside has an upside. And in finance and money, there is an equally balanced upside and downside to every financial lever. And inflation is bad if you're holding cash, bad if you've not got a lot of spending power, really good if you have good debt because it— assets leveraged for income. Your income's going up and your debt is going down thanks to the high inflation. There you go. Did you know that? Let me know in the comments. Let's have a chat. Hit the share button. Join rob.team. And remember, if you don't risk anything,