Originally Posted by Gunfighter

Building a basket of cash flowing assets that responds to inflation prepares you for 1% just like it does 9%. In times of high inflation, the response is more pronounced and in times of low inflation there is less response. A leveraged asset basket will have an expanded response to inflation, much like a 2x, 3x index ETF responds in kind to the underlying index

Consider a package of concrete, lumber, copper, steel, rock and glass, store the bundle in a safe location and have it guarded for safekeeping. I call that bundle a rental house in a good neighborhood with a properly screened tenant. If you have a larger sum to dedicate or prefer pooling assets, consider an apartment vs a house. Rather than pay for storage and security of physical commodities, collect cash flow via lease income. This particular commodity basket lags inflation by up to 1 year as taxes, insurance and rent are typically 12 month agreements. Other packaged commodities with short leases like self storage have a quicker response time on income with the same 12 month lag on expenses. A NNN lease well have a longer lag for income response, but the tenant is on the hook for expenses.

Residential rent growth has an amazing correlation to inflation. Shelter makes up 1/3 of the CPI. It has a bigger impact on inflation than Apple, Microsoft, Google, Amazon, Meta, Tesla, Exxon, Nvidia, JP Morgan and Home Depot do on the S&P 500. Once the NOI from your packaged commodities exceeds your personal expenses, inflation begins working in your favor.

Preparing for 1% is the same as preparing for 9%. Safely leveraging the portfolio, then running into 9% inflation will water your eyes. It's the difference between a Model S Plaid and a MX-5 at the racetrack.

Trip gets the concept, he's just taking on a much more challenging approach by building the life raft while the boat is sinking.