If you could go back 10 years and buy a few things at 2015 prices, what would you grab? Maybe a brand-new fridge for $800 when they sell for $1,200 today? A new car for $27K instead of the current $35K price tag?
Or – how about $30,000 worth of the S&P 500 at prices from 2015?
Which of these would be the smartest financial move right now? And which of them would still be an impressive asset 10 years from now?
This is exactly the question I ask myself when I see people panic-buying.
Sure, we’re all feeling the sting from massive inflation a couple of years ago. And it could continue to hurt us this year. New tariffs are being implemented which is scaring a lot of folks. That makes sense.
Fear-based spending is at an all-time high and folks are rushing to buy “stuff” before prices go up.
But I think people have it backward.
Instead of stocking up on depreciating items, this is the time to get serious about building wealth.
Smart Stockpiling vs. Panic Buying
I’m not against stocking up on things that make sense. I love a good sale.
For example, whenever tri-tip steak goes on mega-sale at my local Vons, I grab as much as my freezer can hold! I know I’m going to eat it all eventually, and buying at 50% off means I get twice as much for my money. That’s smart.
But that’s not the same as panic-buying expensive, unnecessary stuff.
My wife and I have been eyeing upgrading our lounge room furniture for a qutie some time. Our current set is a little worn, and we’d love to replace it someday. But should we rush to buy a brand-new set just because prices might go up soon?
That’s the trap so many people are falling into – thinking they’re “saving” money when really they’re just spending it faster.
I’d rather throw a few thousand dollars into my favorite index fund! The Joel 10 years from now will thank me more for investing early than for saving 25% on a furniture set that will eventually wear and need to be replaced out again.
Doom Saving > Doom Spending
The best way to prepare for an uncertain future isn’t by hoarding depreciating assets. It’s by making sure Future You is in a stronger financial position.
If you’re truly worried about rising prices, then the solution isn’t spending more – it’s spending less. I call it doom SAVING.
People should be banking their cash, paying down high-interest debt, and, most importantly, investing in assets that grow in value over time.
Here are a few smart moves to make if you’re scared about rising prices:
- Beef up your emergency fund – Having more cash on hand gives you flexibility and security, no matter what happens in the economy.
- Pay down high-interest debt – The less you owe, the less financial stress you’ll have when prices fluctuate.
- Buy appreciating assets – Increase your retirement account contributions! Investing in stocks, index funds, or buying real estate builds up your future nest egg.
- Cut unnecessary expenses – If you truly believe there are tough times ahead, you should be contracting your spending, not expanding it. Focus on intentional spending that aligns with your long-term goals.
Some Items Might Get Cheaper in the Future
Not all things are going to be more expensive in the future. In fact, some things have consistently gotten cheaper over time.
Think about diamonds, TVs, and most electronics – prices for these things have actually dropped as production and technology improve.
Could you imagine panic-buying a $8,000 flat-screen TV 10 years ago? That same TV probably costs $600 at Costco today. What a terrible financial move.
What about doom spending on a $20,000 diamond ring 15 years ago, believing it was a great “investment”? That same diamond today might be worth less than $5k.
Home renovations and building materials are another example. Right now, many people are scrambling to buy supplies or start projects before costs rise further.
But markets fluctuate. What if the newly imposed tariffs are dropped in a few months? Or what if supply chain issues resolve quicker than expected, and prices come down significantly?
Jumping into a purchase at the wrong time out of fear can cost you big time.
So instead of making rushed financial decisions, be patient. Try thinking optimistically about the future. It’s a smarter move to wait, watch, and invest your money where it can grow.
The Bottom Line
To combat inflation and prepare for rising expenses, the best way isn’t by spending faster – it’s by making your dollars work harder. So the only thing I’m stockpiling right now is shares of my favorite index fund. Because history tells me that’s the kind of “stuff” that becomes more valuable over time!
I know it’s hard to ignore the news headlines and not freak out about future cost increases. But if you flip your mindset to taking control of your savings and building wealth, I promise you will have a brighter financial future on the horizon.
Stay the course, keep stacking assets that appreciate. That’s how I’m building my millions. 💪
