Does Raising the Minimum Wage Cause Inflation?

Inflation anxiety: The middle class spends too much money on food, housing, education and medical expenses, and the demand for tourism and consumption of high-end goods will fall into the second line. In the environment where the consumption power of the middle class is damaged and the savings of the working class are devalued, it is difficult to implement the policy of expanding domestic demand. When the CPI exceeds the 3% inflation warning line, the middle class may not feel the pressure of life brought by this number. Pork goes up and you can eat beef; rice goes up and you can buy flour; cafes raise prices and you can drink at home; house prices go up and you can rent first. These are just "illusions of the middle class." From their own life experience, they think that inflation is not important.

Inflation anxiety

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Now, rents have begun after years of stability

Inflation

In 2007 and 2008, the main factor driving CPI growth was food prices, which did not increase the cost of living of the middle class too much.

Housing prices are pulling

Inflation

There have been examples of the brutal response to the rise in prices. Due to the dual impact of rising costs and the decline in the real estate market, a wooden flooring factory in Zhongshan has increased the price of products issued to dealers by 3 to 4 in order to ensure profits. percentage point. Dealers did not continue to pass upward pressure on prices, but they will use other methods to protect their interests-reduce promotional activities, control

Inflation anxiety

Inflation not only blows down some safe havens in the middle class, but it can also pierce their imagination about prices and the cost of living. Rising prices and living costs will be the norm. On the whole, our wages are still at a relatively low level. For a period of time, demand will continue to increase, while supply growth will sometimes slow down. In this case,

Inflation anxiety gold is not a "money printer"

Stock market worries

In two years, the price of gold doubled, and the madness of gold was jealous. In the past six months, the soaring price of gold has once again confirmed that it is the best anti-inflation product recognized by the market. However, when investing, do not pursue gold as a "money printing machine". It is a slow-moving investment product in its bones.

As an asset that follows rising inflation, the price of gold often rises several times higher than the inflation rate. However, chasing gold may capsize the gutter.

As a conservative investment product, gold is more suitable for small-water long-flow investment. In order to control gold to add value to wealth, the principle of investment should still adhere to the principle of medium and long-term investment, and gradually build positions and buy on dips. After buying, you should make a long-term investment for more than six months. The expected annualized rate of return is about 10%, which is already extreme. Don't compare it with high-risk investment products such as stocks.

Inflation anxiety hoards a shop waiting for appreciation

Now to catch up with real estate regulation then buy shops. The hammer of regulation fell down, and although the soaring house prices slightly converged, they did not mean to leave the altar. People in first- and second-tier cities began to use their brains. Although the folk has always said "one store for three generations", the investment of millions of shops has a very different investment law from that of residential houses.

One of the major taboos of buying a shop is that it only focuses on the appreciation of the property without asking about the rate of return, and applies the concept of housing for the elderly in the house to the investment in the shop. However, investors should not only consider the appreciation of properties, but also the yield. The normal retail investment return rate should be around 8% or even higher. Generally speaking, for shops with an annual rental yield of less than 6%, no matter how long you stock up, you may find buyers and rotten in your hands.

Inflation anxiety stock market is "big casino"

From a short period of excitement in 2009 to a slump since the beginning of this year, investors in the stock market have suffered a great deal of vitality this year. Some people describe this year's stock market as a big casino, with nine out of 10 losing. However, if you believe that the possibility of future inflation is greater than deflation, then the stock market is your painstaking choice, and today's casinos may be the gold mine of the future.

"Greedy when the market is scared" is the invariable rule of making money. If you have a unique vision, you can find stocks that grow 30% and less than 20 times PE each year. The European and American stock market history proves that the long-term average annual return of the stock market after inflation is maintained at about 6.5% to 7%. For ordinary investors, if there is no good technology for stock trading and the psychological pressure caused by the ups and downs of the stock market, you can consider investing in stock funds or adopting the "fixed investment" investment method of buying more on dips to reduce costs. At the same time, investment risks are diversified.

Inflation anxiety Don't take insurance as investment and savings

Speaking of insurance can be a headache. Product manuals are always as difficult to understand as heavenly books, and most people look at insurance as if in the mist. Some people equate insurance with savings. Regardless of the type of insurance and their own needs, the shorter the time for pursuing insurance, the better the protection will be. Some people take insurance as an investment, but they don't know that there are many prerequisites and restrictions on the investment function of insurance.

The main function of insurance products is protection. Emphasizing children over adults is a mistake that many families make when they buy insurance. Of course, children are important, but insurance financial management reflects the avoidance of family financial risks. The financial loss and impact of family accidents on families is far greater than children. Therefore, the correct principle of insurance and financial management should be to purchase adult products with strong protection functions, such as life insurance and accident insurance, and then buy health and education insurance for children as needed. And in terms of capital investment, it should be for adults, especially the more family economic pillars, the better.