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Elon Musk’s most advice during inflation: invest in “physical things”

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Inflation has become a major concern for many Americans. On Wednesday, the Federal Reserve announced it would raise interest rates for the first time since 2018, at a time when the pandemic and supply chain crisis have raised the cost of just about everything.

Tesla CEO Elon Musk (Photo: AP Photo/Susan Walsh, File)

Food and cars are more expensive, as are transportation costs and labor of any kind. Things that could reduce inflation, such as supply security and rising labor participation, have not happened, Fed Chairman Pro Tempore Jerome Powell said.

From the central bank of the world’s largest economy they also corrected the rise in their inflation forecasts to a median of 4.3% for the end of the year, compared to the 2.6% projected in December.

How do billionaires think?

When it comes to inflation, some of the world’s richest men, like Elon Musk and Warren Buffett, have recommended much the same strategies.

On Sunday, Tesla’s chief executive tweeted that in times of high inflation, “it’s generally better to own physical things like a house or shares in companies you think are good products,” rather than keep cash stashed away.

There is nothing new. Buffett tells you that the most important forms of inflation protection are owning a piece of “a wonderful business.”

Berkshire Hathaway Chairman Warren Buffett walks through the showroom as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual meeting of shareholders in Omaha, Nebraska, USA, on May 4, 2019. 2019. REUTERS/Scott Morgan

Warren Buffett (Image: REUTERS/Scott Morgan)

At the end of the Great Recession, the CEO of Berkshire Hathaway is clear that no matter what happens to the value of the dollar, a company’s product will be in demand.

“If you own Coca-Cola, you’re going to get a certain share of people’s labor 20 years from now and 50 years from now for your product and it doesn’t make any difference what’s happened to the price level,” he said in 2009 during the Berkshire Hathaway Annual Shareholders Meeting.

Invested in “physical things”, what does it mean?

But unlike the Oracle of Omaha, who is a bit more skeptical of cryptocurrencies (non-physical things), Musk remains confident in digital assets, clarifying: “I still have and will not sell my Bitcoin, Ethereum or Doge.”

Dogecoin jumped 7%, immediately after the CEO of Tesla issued that Opinion, according to Fortune magazine.

An article by Kevin Vandenboss for Benzinga notes that “the most important point of Musk’s message is that physical assets are generally the safest investment”.

“This message from ‘Father Doge’ himself should say a lot,” he said.

The real estate analyst believes that, although it is not a very feasible option for many investors at the moment, having the category of owner in this sector is a good strategy when there is high inflation.

“Specifically, single-family homes, multi-family homes, storage units and farmland,” Vandenboss mentioned as some of the options available to buy fractional shares or even invest in a property portfolio fund.

Real estate low rise construction building exterior in new residential settings for sale sunny blue sky background.  Urban development concept image

Multi-family housing block (Photo: Getty Images)

Four Ways to Invest in “Inflation Resistant” Property

in reading single family homesFor example, retail investors can buy shares of individual rental properties with as little as $100.

To read multifamily properties There are multiple options to receive passive income through crowdfunding. “Accredited investors can search for offers on sites like CrowdStreet or RealCrowd and invest in a project with minimum investments of $25,000,” the expert recommends.

Options are perhaps a bit more limited for non-accredited investors, but other platforms like CalTier Realty have a multi-family fund with a minimum investment of just $500.

storage unitsself-storage or “storage rooms”: Vandenboss highlights the real estate crowdfunding platform RealCrowd, which currently has an offer with a minimum investment of $50,000.

Lastly, read land with agricultural potential. They are also a good alternative and may be “one of the hottest long-term real estate properties available right now”.

Vandenboss explains that farmland is shrinking across the country at a rate of more than 1 million acres per year, while global demand for food is steadily increasing.

For one thing, farmland investment platform FarmTogether has already launched an offer for an organic vineyard in California, with a minimum investment of $15,000.


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