12 Best Investments During Inflation [w/ Investing Guides]

The Millennial Money Woman blog post "Best Investments During Inflation"

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Inflation is a silent killer. It hides in plain sight and constantly diminishes the value of your money.

But luckily, there are investments that will help you hedge against inflation and protect your wealth.

With that said, here are the 12 best investments during inflation:

  1. Blue-Chip Art
  2. Rental Real Estate
  3. Private Real Estate
  4. Fine Wine
  5. Farmland
  6. Sports Collectibles
  7. Gold
  8. Your Kids
  9. Your Financial Plan
  10. Yourself
  11. Alternative Assets
  12. Rare Whiskey

I’ll also show you how to invest in each asset so you can combat inflation right away.

Let’s dive in.

1. Blue-Chip Art


Blue-chip art is a $1.7 trillion asset class with a track record of performing exceptionally well during periods of high inflation.

In fact, the art market had an annual appreciation rate of 33.2% in the 1970s when inflation was at 9%.

The best part?

The art market has outpaced the S&P 500 by 165% over the past 25 years.

Contemporary Art Market Performance vs SP500 1995-2021

And it gets better:

The art market has a very low correlation with the economy, which reduces the volatility of your portfolio during a recession.

Correlation Factor 1995-2021

So if you’re wondering where to put your money during inflation, then blue-chip art may be your best bet.

How to Invest in Blue-Chip Art


You can invest in multi-million dollar works of art – for as little as $500!

Here’s how to do it:

  1. Sign up to Masterworks
  2. Schedule a phone interview
  3. Talk to your dedicated sales rep
  4. Fund your Masterworks account
  5. Research the art investments
  6. Execute your investments

Just keep in mind that to make the most profit, you should hold on to your art investment for 3 to 10+ years.

However, Masterworks does offer a secondary market, so if you’re ever in a bind and need cash fast, you can always sell your art shares.

Recommended Reading: Masterworks Review

2. Rental Real Estate


Rental real estate is an effective inflation proof investment.

Why?

Because you earn cash flow in the form of rent and during inflation, there will be a rise in the cost of rent.

Therefore, earning you higher cash flow.

Rent vs Home Prices

Source: Stessa

As you can see in the graph above, rent (in blue) has been stable over the past few decades.

And historically speaking, rents are somewhat predictable, and rents will be collected even during a recession.

Another thing to consider when investing in rental real estate?

The rapid appreciation of home prices.

10 Year Average Property Value Appreciation of Single Family Homes in the USA

And it gets better: Rental property home prices have either stabilized or increased during minor recessions.

So not only do you earn passive income but you can also exit your rental property investment with a profit, assuming the property has appreciated.

How to Invest in Rental Real Estate


You can invest in rental real estate for as little as $100.

Here’s how you can get started:

  1. Sign up to Arrived Homes
  2. Browse and research the pre-vetted properties
  3. Determine how much money you want to invest
  4. Fund your account
  5. Execute your order
  6. Sit back and earn passive income

As you may have guessed, investing in rental real estate can be an illiquid and long process (taking up to 5 to 7+ years).

So just be sure that you’re ready to invest for such a time period.

Recommended Reading: Arrived Homes Review

3. Private Real Estate


Private real estate is an excellent income producing asset.

But can it help you hedge against inflation?

It certainly can.

In fact, there are 2 main reasons why real estate can be a lucrative investment – especially during inflation:

How Investing in Commercial Real Estate Works

With private real estate investments you can earn:

  • Passive income
  • Profits from appreciation

And when compared to 3 popular investment classes, private real estate has shown strong passive income results over the past 20 years:

Private Real Estate Performance

When you consider the volatility of private real estate investments versus the return, you’ll also find this could be worth your time:

graph of risk adjusted return potential of bonds vs private real estate vs publicly traded reits vs stocks

Not only is private real estate considered less volatile than stocks and publicly traded REITs, but private real estate holdings also provide higher returns than stocks.

Examples of private real estate investments include: 

  • Single-family homes
  • Apartment complexes
  • Industrial / commercial
  • Home developer construction

How to Invest in Private Real Estate


As long as you’re comfortable with investing for the long term (sometimes 5+ years), then private real estate investing may be right for you.

Here’s how to start:

  1. Sign up to Fundrise
  2. Select your real estate portfolio strategy
  3. Fund your Fundrise account with cash
  4. Execute your investment orders
  5. Collect your passive income (in the form of dividends)

Always make sure to thoroughly research your options before investing.

Recommended Reading: Fundrise Review

4. Fine Wine


Want to know the best kept (and tastiest) secret in investing?

Fine wine.

Investing in fine wine is a great way to protect against inflation and build wealth.

Check out the chart below:

Fine Wine vs Oil vs DOW Jones vs SP500

Not only did fine wine (shown in blue) not get impacted by the last 3 market corrections, but it actually increased its overall returns!

How to Invest in Fine Wine


If you’re looking for the best investment for inflation, then fine wine could be one of the top choices.

But how do you invest in fine wine?

Here’s the process:

  1. Sign up to Vinovest
  2. Build your wine portfolio
  3. Fund your Vinovest account
  4. Schedule a call with your wine advisor
  5. Execute your wine investment

Just keep in mind that fine wine is a long-term investment.

The good news is that with Vinovest, your wine will be:

  • Insured
  • Can be sent to you at any time 
  • Stored securely (in a secured, undisclosed location)

Recommended Reading: Vinovest Review

5. Farmland


If you’re wondering what to buy before hyperinflation hits, then farmland could be your best bet.

Why?

Land is a finite resource, yet the world’s population continues to grow.

This means that the value of land will continue to increase.

Check out the evidence in the chart below:

Farmland Returns vs Other Major Asset Classes 1990-2020

Not only do people need land to live, but they also need land to sustain themselves.

This means that farmland could be one of the best investments during inflation because the cost of food and rent has risen.

Farmland also has lower volatility and a similar growth rate as the S&P 500 and other real estate investments.

Major Asset Classes Returns vs Volatility

With appreciating assets like farmland, you’re getting the best of both worlds: 

  • Low volatility
  • High return potential

Here’s a quick average annual return comparison chart:

farmland average annual return

There is a catch, however: You must be an accredited investor.

As long as you pass this test, then you can start investing in farmland starting at around $10,000 to $25,000.

How to Invest in Farmland


Investing in farmland and timberland is very straightforward.

Here’s the process:

  1. Sign up to AcreTrader
  2. Confirm you are an Accredited Investor
  3. Browse & research the available investment options
  4. Fund your AcreTrader account
  5. Execute your investment order
  6. Earn passive income in the form of dividends

Keep in mind that the holding period for farmland can be between 5 to 10 years.

After the holding period, you can expect to receive your principal and any appreciation from the sale of the land.

Recommended Reading: AcreTrader Review

6. Sports Collectibles


Sports collectibles are arguably one of the hottest markets in 2022.

The current market value is $26.1 billion and since 2008, the sports collectible market has outperformed the S&P 500.

PWCC 500 vs SP500 2008-2022

As you can see, investing in sports collectibles could be a good way to protect your wealth from inflation.

And it gets better: Sports collectibles don’t suffer from the same ups and downs experienced in the stock market.

Plus, the average ROI is 60%, and the average inflation rate hovers between 2% to 8%, you can beat inflation with this alternative investment.

How to Invest in Sports Collectibles


Want to join sports fans, fellow investors, and others who want to build wealth?

Here’s the process to invest in iconic sports collectibles:

  1. Sign up to Collectable
  2. Browse the sports memorabilia options 
  3. Fund your Collectable account
  4. Execute your investment order
  5. Hold your investment for the long term (5+ years)
  6. Exit and make money

The great news is that you can start investing for as little as $5!

7. Gold


Gold is often praised as a way to hedge against inflation.

Why?

Because the price of gold typically rises during economic uncertainty and when inflation is high.

Take a look at the graph below:

Gold Price vs US CPI

Over the past decade, gold has outperformed inflation (measured by the Consumer Price Index, aka CPI).

How to Invest in Gold


Investing in gold is a simple process and you can buy it directly from your phone.

Here’s how to do it:

  1. Sign up to OneGold
  2. Choose your favorite type of gold
  3. Send funds to your OneGold account
  4. Buy your gold

When you’re ready to redeem your gold, you can sell your holdings 24/7 and send the funds back to your original funding source.

Your metals can be stored in either:

  • Canada
  • America
  • Switzerland

8. Your Kids


Riding a bike and learning financial basics are virtually the same thing: They require hands-on practice and time.

While your kids can sit and listen to you teach about the theoretical concepts of riding a bike – they won’t actually know how to ride a bike until they try it out.

The same goes for finance.

You can talk about money all you want, but unless your kids actually have some experience with:

  • Researching investment options
  • Living through some market volatility 
  • Making requests to invest in companies
  • Monitoring their investments in the stock market

They probably won’t grasp the full concept of what it truly means to be an investor.

That’s where the Greenlight Debit Card for Kids comes into play.

Kids are our future – and it’s critical that we teach them early about managing money.

By teaching your kids about money from an early age, you could help them: 

  • Get ahead
  • Invest earlier
  • Save for retirement
  • Handle money in their later years
  • Build a nest egg from an early age 

While this “investment” doesn’t necessarily immediately beat inflation, I did think it was important to include in this blog post.

That’s because your kids and your family are a very important financial consideration.

How to Invest in Your Kids


The good news is that it does not take much time to sign-up and start investing in your future: Your kids.

Here’s how:

  1. Sign up to Greenlight
  2. Verify you are the parent
  3. Set-up your child’s account
  4. Fund your Parent Wallet (minimum of $5)
  5. Determine how much money you want to send to your children’s accounts

A cool feature is that you can teach your kids how to invest!

Your kids can research companies and make investment requests.

It would be up to you, then, to execute the order for your child.

If you’ve ever wanted to help your kids get ahead in the game of life, Greenlight is the magic card.

Recommended Reading: Greenlight Card Review

9. Your Financial Plan


If you’ve ever played a treasure hunting game, chances are, you had to follow a map to find the big, red “X” where your treasure would be buried.

Well, think about mapping your financial plan just like mapping out your route to your golden treasure.

In the end, your financial treasure is your nest egg and the fact that you can retire, right?

That’s why it’s time to consider investing in your overall financial plan. Now.

In fact, about 65% of individuals who have a financial plan in place feel financially stable.

65 percent of people who have financial plans in place feel financially stable

Not only can a financial plan lead to healthy money habits but it can also lead to healthy investing habits.

How to Invest in Your Financial Plan


Building a financial plan can be simple and cost-effective.

Here’s how to do it:

  1. Open a free account with Personal Capital
  2. Link your financial accounts
  3. Use the free financial tools
  4. Get an overview of your finances
  5. Schedule a meeting with the financial advisor of your choice
  6. Create your financial plan
  7. Start investing

Remember that the earlier to start investing in your own financial plan, the sooner you will become financially independent.

10. Yourself


The fifth wealthiest person in the world, Warren Buffett, once said:

The best investment you can make is an investment in yourself.

This is 100% true.

Here’s how I invest in myself:

  • Exercising daily
  • Learning new skills
  • Eating healthy food
  • Growing my network
  • Building my business
  • Meeting with my mentor
  • Reading books and blogs

…And the list just keeps going.

Truth be told, you don’t need to spend $100’s of dollars when investing in yourself.

You can find the information you’re looking for on YouTube or in blogs (like this one!).

Just keep this saying in mind:

The more you learn, the more you'll earn.

If you learn more, you can earn more, which means that investing in yourself is a bullet proof way to hedge against inflation.

How to Invest in Yourself


You can never go wrong investing in yourself.

Here’s how you can get started:

  1. Create an account on Udemy
  2. Choose from many courses
  3. Sign-up to your favorite one
  4. Learn, interact, and engage with the class
  5. Implement the new skills you learned 

Speaking from personal experience, the key to success is to be consistent.

You cannot win without discipline.

So, whether you are:

  • Building a blog
  • Running a horse farm
  • Developing a computer program

…You have to be consistent with your efforts.

You got this!!

11. Alternative Assets


The ultra-wealthy were previously the only ones with access to sexy, non-traditional assets.

Not anymore.

Thanks to companies like Yieldstreet, that playing field has now been leveled and virtually anyone can access the alternative asset world.

For example, you could invest in:

  • Art
  • Crypto
  • Real estate
  • Private credit
  • Private equity
  • Venture capital
  • Legal contracts
  • Marine financing

…And the list goes on and on….

So why even consider alternative assets as a way to hedge against inflation?

That’s because alternative assets have outperformed the S&P 500 by about 30% as of Q4 in 2021:

Alternative Assets Performance vs Other Asset Classes

In fact, the alternative asset index increased by about 90% in 2021, as shown by the graph above.

So, if you’re wondering where to put your money during inflation, then investing a small portion into alternative assets may not be such a bad idea.

The graph below supports this notion as well:

Alternative Portfolio Volatility and Returns

So, you get the best of both worlds:

  • Volatility is significantly less than stocks
  • Returns equal to or slightly greater than stocks

From a historical perspective, alternative assets can also help accelerate the growth of your overall portfolio.

Related: How to Create Multiple Income Streams

How to Invest in Alternative Assets


Modern technology makes it easy to sign up to alternative investment platforms – for both accredited and non-accredited investors.

Here’s the process:

  1. Sign up to Yieldstreet
  2. Determine whether you are accredited or non-accredited
  3. Research the alternative assets you want to buy
  4. Determine how much money to invest
  5. Fund your account
  6. Execute your investment order

Before you invest, here are a few things that I would look into first: 

  • Lock-up periods
  • Expected returns
  • Fees for each investment
  • Whether the investment can be held in a Self-Directed IRA
  • Whether you can liquidate a portion of your investment before the lock-up period is over

And always remember that alternative investment classes are typically for the long-term.

So, make sure you do your thorough research!

Recommended Reading: Yieldstreet Review

12. Rare Whiskey


Rare whiskey investing has become a global phenomenon that shows no signs of slowing.

In fact, rare whiskey has seen its value grow by 564% over the past 10 years:

RW Icon 100 Index

Simply put, rare whiskey increases in value over time which makes it one of the best investments during inflation.

The average cost per bottle of whiskey has also increased substantially, with the latest data from 2021:

Rare Whiskey Prices 2016-2021

The graph above shows the cost per bottle for the year-end of 2021 and is expected to crack a new record – £434.78 (or $518.52).

Whiskey has considerably outperformed the following over the past 6+ years as well: 

  • Oil
  • Gold
  • Inflation
  • FTSE 100
Rare Whiskey Returns vs Other Asset Classes

Since inflation hovers between 3% to 9% and the whiskey index is now hovering around 237%, you could certainly say that whiskey is an effective hedge against inflation.

How to Invest in Whiskey


Ready to add whiskey to your portfolio?

Here’s how to do it:

  1. Request early access to Whiskeyvest
  2. Connect with a whiskey specialist to research your options
  3. Build your whiskey portfolio
  4. Fund your account
  5. Execute your order
  6. Watch your portfolio grow

You can request the whiskey to be delivered to you and you can sell it at any time.

Keep in mind that the longer you stay invested, the higher your chance of earning a larger profit.

Inflation Investments: FAQs

If you’re looking for inflation proof investments, then consider investing in asset classes such as private real estate, farmland, sports collectibles, blue-chip art, fine wine, rare whiskey, or yourself!

The safest investment against inflation is investing in yourself. Other stable investments could include real estate or Treasury Inflation Protected Securities (aka TIPS), which are backed by the U.S. government.

Common hedges against inflation include gold, fine art, fine wine, rare whiskey, farmland, and real estate.

The best investment during inflation is real estate, which tends to appreciate in value over time while still earning passive income from rent.

Real estate is arguably one of the best investments during inflation because properties tend to appreciate over time and you can earn passive income from rent.

It’s important to make your money work for you during inflation, so consider investing in blue-chip art, farmland, your business, yourself, your financial plan, or your kids.

While it’s necessary to keep an emergency savings fund in cash even during inflation, you don’t want to have excess cash lying around. Instead, put your money to work in inflation hedges such as real estate, blue-chip art, farmland, your business, your education, etc.

While CDs tend to offer a higher interest rate than your regular checking or savings account, CDs are generally not inflation protection. If you have excess cash, then consider investing it in real estate, fine wine, or your education.

How to Hedge Against Inflation


As interest rates continue to rise, the ultimate hope is that inflation will decline from its 40-year highs to pre-COVID times.

While this certainly could be a possibility, it is clear this will take time.

That’s why it’s critical to invest in inflation hedges to protect your wealth.

And even if you’re adding just a few new investments to your portfolio, over time, they can help your wealth survive (and thrive!).

It’s crucial to not make the mistake and implement dramatic changes to your portfolio (such as investing 100% of your assets in real estate).

Diversification is key.

Consider your options today, implement them tomorrow, and your bank accounts will thank me later!

Now it’s your turn:

What steps are you going to take to hedge against inflation?

Let me know in the comments section below.

Fiona Smith
Fiona Smith
Fiona Smith is the founder of The Millennial Money Woman. She holds her Master of Science Degree in Personal Financial Planning, has advised decamillionaires for 6 years in the corporate wealth management sector and has co-founded a local non-profit community teaching financial literacy. She is the author of the personal finance book How to Get Rich from Nothing and her work is featured on Forbes and FinCon.

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