What is inflation?
Inflation is the average increase in the prices of goods (Think: bread, eggs, cars, electronics,...) and services (Think: transportation, cleaning,...). So it means that life gets more expensive: something that cost you 100 euros last year can cost you a whole lot more today. The painful thing about inflation is that your savings actually become worth less because you can buy less with them today than you could a year ago.
What to do about it?
Unfortunately, inflation itself is outside your control, but you can choose what to do with your savings. If you invest in assets that tend to increase in value over time and/or generate earnings for you, you can counteract the negative effect of inflation. This is because your investments are (hopefully) growing faster than inflation. So investing then, but in what?
Real estate as inflation protection!
Historically, real estate has proven to be one of the best hedges against inflation. The idea is that real estate usually rises with inflation and rental income is linked to inflation. With the annual rent indexation, the rent is raised which makes your investment absorb inflation well. Furthermore, they also provide a stable source of passive income so that even in turbulent times, you continue to earn from your investment.
