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BiggerPockets Real Estate Podcast
The One True “Inflation-Proof” Investment (EVEN with Tariffs)
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- [00:00]
Dave Meyer
You need to protect your wealth from inflation because inflation eats into your net worth and makes every dollar you earn worth less. And inflation is always a threat. But data has shown it on the rise recently and massive new tariffs are rolling out. Over the long run, it's safe to assume that every dollar of your net worth will be worth less in the future than it is today. That's just how inflation works. So if you want to achieve your financial goals, you need your investments to grow faster than the pace of inflation and you need to adjust to that soon. So today I'm sharing my best investing strategies to combat inflation right now. Hey everyone, it's Dave Meyer, head of real estate investing at Biggerpockets. And today we are talking about everyone's least favorite part of the economy, inflation. We don't know yet which of the new administration's tariffs will remain in place or what their effect on inflation will be. But it's safe to say that we're entering a very different economic environment than we've been in the last few years. And as investors, we need to adjust our strategies and account for that uncertainty before it takes effect. So today I'm going to help you not just live with inflation, but grow and thrive in any type of inflationary environment, whether it's high, low, flat, whatever. We're going to explore whether the common wisdom that real estate hedges inflation is actually true. And if it is, what types of real estate are the best ways to battle the devaluation of your dollar and actually do one better. Not just hedge inflation, but outperform. And I'll share with you some simple but critical analysis skills that you should be using to ensure that the nominal gains you might be seeing on paper when you analyze your investments actually translate into increased real spending power in your day to day life. So let's get into it. First things first, let's review what inflation is in the first place. It has a lot of definitions, but basically it's the devaluation of the dollar. In other words, your money buys you less. $10 used to buy you a sandwich, chips and a drink. Now you're lucky if you get a sandwich for 10 bucks. And there are different causes of inflation, but typically there are sort of these big two buckets. The first is the printing of money, or you may hear economists call this creating more or increasing the monetary supply. And basically what happens is when you have more money circulating around the economy, each dollar that you is just worth a little bit less. So that's one big bucket. The second bucket is supply Shocks. When there is not enough of a thing that people want, prices go up. Just as an example of food or goods, we've seen this in eggs, right? Because of avian flu and all these things going on, there was a supply shock. There were less eggs available, but people still want eggs, and so they're willing to pay more and more for eggs. And that drove egg prices up. We also see this in service examples, right? For lawyers or doctors or, you know, services that require a lot of education. There just aren't that many of those people out there, but they're very important to people's day to day life. Everyone wants a doctor. Hopefully you don't need a lawyer that often, but when you do, you really want a good one. And so you're willing to pay for these things. And that again, because there is scarcity of supply in these, that pushes prices up. You also see this in labor examples, right? During COVID there were just weren't enough people to work at restaurants. And so wages for servers, for frontline employees went up because there was a supply shock in terms of labor supply. So those are sort of the big two buckets. One is an increase in monetary supply and the other is sort of a supply shock when it comes to either labor goods or services. Now, contrary to what a lot of people believe, some inflation is actually seen as a good thing among almost all economists because it stimulates the economy. Just think about this logically, right? If people all thought that prices were going to go down over the next month or year or decade, they'd probably wait to make big purchases like a car or a tv. Businesses would probably do the same thing before making investments. And so they would spend less, which hurts economic output and could put us into a recession and generally just a worse economic situation. Counter that with modestly rising inflation of 1 to 2% per year, people will buy products and services because it's cheaper to buy them today than it would be a year from now. And that gets people to spend their money and it keeps the economy humming along. Now, when I say that some inflation is good, the target is generally around 2%. So of course what happened over the last couple of years was terrible. And we had both of those buckets that I mentioned earlier. We had the printing of money, we saw the monetary supply go up a lot, and we also had supply shocks. And that is what caused inflation to spike up to 9%. And it has been above the Fed's target of 2% for the last several years. As of now, inflation has been hovering around 3%. That is higher than the Fed wants, but it's better than we've been at in recent years. So we're getting closer to what would be an acceptable rate of inflation, but we're just not there yet. So to recap, inflation is when prices go up and the value of your dollar decreases. Some inflation is acceptable and even desired in a capitalist economy, but we're still above where we want to be. And just as a rule of thumb, generally speaking, inflation halves the value of your dollar every 30 years. That is the long term average that you could keep in mind. I find having that just rule of thumb is really useful. And I know it might not feel like that because in recent years inflation has been so intense that the value of your dollar has dropped faster than that pace for sure. But if you zoom out and look at sort of the long term average, it's every 30 years, the value of your dollar approximately halves. So that is the general rule of thumb that you should be following. But let's also just take a minute and acknowledge that that sucks, right? Imagine saving up a million dollars for retirement and then you get there 30 years from now and that money can only buy half of to that is not cool. And up next, we're going to talk about how you can avoid that problem and outperform inflation with your portfolio. Stick with us. Before we move on, today's podcast is brought to you by Resimply, the All in One CRM built for real estate investors. Automate your marketing, skip trace for free, send direct mail and connect with your leads all in one place. Head over to resimply.com biggerpocketsnow to start your free trial and get 50% off your first month. It's a fresh start to the year. Are your investments working as hard as you are? Here at BiggerPockets, we've partnered with Baam Capital to bring you an effective way to invest. Baam Capital specializes in tax advantaged multifamily real estate investments designed to help you plan smarter for both your finances and your future. By planning for the year ahead and leveraging the benefits available, you can kickstart your financial growth while maximizing deductions, grow your wealth and manage your taxes more efficiently. This year. Discover your options with BAM Capital today. That's B A M capital.com biggerpockets real estate it's been a cornerstone of wealth building for generations, but it's also often a major headache for investors. You get these 3:00am maintenance calls, tenant disputes, property taxes. Enter the fundrise flagship Real estate fund, a $1.1 billion real estate portfolio built for you. We're Talking more than 4,000 single family homes in the thriving Sunbelt, 3.3 million square feet of in demand industrial facilities, all professionally managed by a very experienced team. With the Flagship Fund, you're tapping into real estate's most attractive qualities like long term appreciation, potential, hedge against inflation, diversification for the stock market, all of those things. Check, check, check. All this comes without complex paperwork. Massive down payments are the soul sucking landlord duties we all know about. So visit fundrise.compockets to explore the portfolio. Check out historical returns and see just how easy it can be to add real estate to your investing strategy. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's perspectives@fundrise.com flagship this is a paid advertisement Real estate investing is a great way to build wealth, but let's be honest, managing rentals can make your investment feel like a full time job. But what if you could continue to earn passive income powered by real estate without any stress? That's where short notes come in. Short notes allow you to invest in real estate development and earn 7 and a half to 9% annualized interest, all without managing properties or worrying about tenants. Choose from flexible terms as short as six months, enjoy monthly interest payments and put your money to work on your terms. Go to connect invest.com bp and get started investing today. Tired of the headaches that come with hunting down sufficient rental property insurance? Well, say goodbye to the endless calls and all the stress with National Real Estate Insurance Group or as they call it, nreg. With nreg, you can customize your coverage easily, manage it online and keep every property you own, regardless of occupancy status, protected on one monthly schedule and bill. There's no fuss, just flexible, reliable coverage that adapts to your Portfolio is a BiggerPockets.com insurance to learn how effective insurance can be with National Real estate insurance group, that's biggerpockets.com insurance. Go visit it to request a proposal today. Welcome Back to the BiggerPockets podcast. We're here talking about inflation and how it can SAP your returns. Up next, we're going to talk about first how real estate performs against inflation historically. And then we'll discuss and compare that to other asset classes like the stock market and bonds, and see which one does the best to combat inflation and build wealth over the long term. Before we jump into that, I just want to clarify two important terms that I'm going to be using. And you'll probably hear, if you read about or learn about investing and inflation over the long run. The first word is nominal. And this basically just means not adjusted for inflation. If you want to remember it, it starts with the letters no. So I always remember that as not adjusted for inflation. And then the counter to that, the other term that you need to know is real. So when you hear someone say real returns, that means it's adjusted for inflation. Or if you hear someone say real wages, that means income after adjusting for inflation as well. As an example, right, Think about bonds. Right now, if you lent your money to the government in the form of a 10 year U.S. treasury, you would earn a return of 4.2%. But let's just round up and say that inflation right now is at 3%. Your real return would actually be 1.2%, right? Because your bond is getting you 4.2%, which sounds good, but you have to subtract that 3% to see what you're getting after inflation eats away your spending power. And in this example, that would come to 1.2%. Or perhaps a better, more relevant example for real estate investors is let's say your rent goes up 5% in a year, but the inflation rate is 2% that year. Your actual real return would be 3% because, yeah, your rents went up 5%, but inflation basically negates 2% of that return. And so you're left with a 3% return, which is still good because that's outperforming inflation. And as investors, I want to challenge you all today to start thinking like this. Start thinking in quote, unquote, real terms. And this took me a long time personally, because frankly, I started investing in 2010 and inflation was so low from 2008 to 2020, it was a historically low period of inflation that it honestly wasn't really that important. But as we now know, it is super important. And I promise you, if you start thinking in real terms, it will really change. You think and act as an investor, and I bet you you will be better off for it. All right, so now that we have those terms defined, let's talk about different asset classes. And maybe you've heard this, maybe this is the whole reason you're listening to this podcast in the first place. But many people believe that real estate is one of, if not the best way to hedge against inflation and potentially outperform inflation. And since we now know that, we need to think about and evaluate this question in quote, unquote, real terms, inflation adjusted terms, we can explore if this claim is really true. Now, when most people evaluate this question, or at least when I see this on social media or other YouTube channels or sometimes even in the newspaper, they only look at the price of homes. They'll look at nominal prices and say, okay, home prices used to be 250,000. They're up to 300,000. Did that rate of growth keep up with the pace of inflation, yes or no. And that is a helpful starting place. But since we're here on BiggerPockets Real Estate and most of us here are looking to be investors, not just invest in our primary homes, I want to understand how rental properties compare to inflation. And so we're going to go a little bit deeper than just home prices. We're going to look at a couple different scenarios, but I'm going to start with the easy bit. Home prices. When we look at this, it's actually pretty clear. Over the last 60 years of data, home prices on average grew 4.62% each year while inflation was at a annual pace of about 3.7%. So this puts unleveraged real estate at about a 1% return. But since most people don't buy for cash, we need to talk about leveraged real estate that is using a loan to buy a property. Let's jump into an example here because I think this will make it a little bit easier. Let's just say that I, Dave, buy a property for $250,000 today, and I'm going to put down 20%, which is $50,000. If you looked at this in a typical nominal way, that property would be worth a lot, $970,000 in 30 years. But remember, that is not inflation adjusted. If we use that inflation adjusted 1% growth rate I just mentioned, that property would be worth about 337 grand in today's dollars. And that would yield you, on the $50,000 you invested, a 6.6% real return. So I'll give you a little bit of spoiler, but that 6.6 real return is actually really good as it's already in the range of what the stock market returns. But as you and I know, there are other benefits to rental property ownership and real estate above just the price of your property going up. As we know, rental properties generate rental income and rents grow at least on pace with inflation. I'm going to be conservative here today and say that rents grow at the pace of inflation and not any higher than that. Right. That is a very conservative analysis. A lot of People say that they grow at 4% per year or 5% per year. And remember, our long term average on inflation that we're using is 3.6%. So there is an argument that rents grow faster than inflation. But just to be as conservative as possible, I'm going to say that they grow at the same rate. Now you might be thinking, oh, that's not that good because that just breaks even. Well, maybe it's at least a hedge of inflation, but that's not true. This is actually a good return because remember, when you use fixed rate debt to buy a rental property, your biggest expense does not grow even with inflation. So yeah, maintenance costs go up, as do taxes, insurance. But your debt service, the amount you are paying in principal and interest, that does not change. So as long as your rents are keeping pace with inflation, which historically they have, or they've even outperformed that, your cash flow should be growing. So just back to our example. Say you generate $2,000 a month in rent right now you pay 1,000 bucks a month in your mortgage and then $1,000 a month in other expenses. So you're just breaking even today, right? Just for example, let's just say you're breaking even today. But then let's fast forward 30 years. And what does this look like? Well, if you just extrapolate the rate of inflation on that $2,000 per month in rent that you're generating today, your income would balloon to $5,780 per month. That's great. Your other expenses, your non mortgage expenses, would also grow a lot. Not as great, but they would come out to $2,890, growing at the same pace as your rents. But that mortgage payment that was $1,000 today, 30 years from now is still $1,000. Or maybe you've paid off your property and now it's $0. But let's just say 29 years from now it is still $1000 per month, making your cash flow 1800 and $90 per month. So you've gone from a break even situation to a almost $2,000 per month cash flow. Even if rents only keep pace with inflation now that cash flow will be worth less than it is today due to the deterioration of the dollar. But you will be increasing your turn over that time because of the nature of buying real estate with inflation, fixed rate debt. And to me this is where real estate really shines. Plus you get a lot of lower volatility than the stock market, which we'll talk about in a minute. You get the Tax benefits that let you keep more of that money. So from my analysis, the answer is pretty clear. Not only does real estate, particularly rental property investing, hedge inflation, it well outperforms inflation. So if you agree with me that real estate is a great way to optimize your portfolio and your financial future against inflation, how do you do it? Well, I'll give you just a couple rules of thumb. First and foremost, buy and hold. The analysis I just did show that you need to hold onto these properties over a long time and have them at least keep pace with inflation for this analysis to work. So that means it doesn't necessarily work for flipping. The second thing to take into account is there's always this debate in real estate about markets that appreciate versus markets that that cash flow. And there's historically been this trade off. But if you want to hedge inflation, you want to optimize for being in markets that at least keep pace with inflation, if not do better. And over the last couple of years, almost every market in the US has done that. So what I do and what I would recommend other people do is sort of look back over historical periods before the craziness of COVID look from 2010 to 2020 and see markets that were growing faster than the pace of inflation during that period. Because that is sort of a key part of this analysis. You can't be in one of those markets that maybe has amazing cash flow, but home prices don't really go up. Yeah, you still might get some benefit, but really to optimize against inflation, you do need home prices to appreciate. So you want to be in markets where they'll at least keep pace with inflation. Third, and this is probably self evident at this point, but use fixed rate debt, that is sort of one of the key benefits of real estate. As I said, your mortgage payments will stay the same. You will be paying that mortgage down in deflated dollars, which is really helpful. So really, I highly recommend if you are a long term buy and hold investor, find ways to buy using fixed rate debt. If you're buying residential real estate, this shouldn't be that hard. If you're buying commercial real estate, try and find loans that will allow you to lock in your rate for as long as possible. Okay, so those are just three rules of thumb that you should follow if you want to hedge against inflation. One is buy and hold onto properties for a long time. Second is make sure that the markets that you invest in have a good opportunity to appreciate. And the third is use fixed rate debt. This is all one on one rental property stuff. But that's just true. If you want to hedge inflation, you perhaps don't want to do some of these fancier strategies. You want to sort of go back to the fundamentals of real estate investing. So that's my analysis of real estate and how it hedges or outperforms against inflation. But what about other asset classes? Because maybe gold does better, or Bitcoin, or the stock market does better than real estate at hedging inflation. When we come back, we'll get into that. Everyone, I have good news for you. If you thought you missed out on attending BPCON 2025, you haven't. We've just opened up a surprise early bird extension through the end of April. 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I'll also be giving one of the keynotes this year, so if you like this podcast, you won't want to miss that. Head now to biggerpockets.com conference to learn more and get your early bird discount before May 1st. It's a fresh start to the year. Are your investments working as hard as you are? Here at Biggerpockets, we've partnered with BAAM Capital to bring you an effective way to invest. BAM Capital specializes in tax advantaged, multifamily real estate investments designed to help you plan smarter for both your finances and your future. By planning for the year ahead and leveraging the benefits available, you can kickstart your financial growth while maximizing deductions, grow your wealth and manage your taxes more efficiently. This year, discover your options with BAM Capital today. That's B A M capital.com biggerpockets real estate it's been a cornerstone of wealth building for generations, but it's also often a major headache for investors. You get these 3:00am maintenance calls, tenant disputes, property taxes Enter the Fundrise Flagship Real estate fund, a $1.1 billion real estate portfolio built for you. We're talking more than 4,000 single family homes in the thriving Sunbelt, 3.3 million square feet of in demand industrial facilities, all professionally managed by a very experienced team. With the Flagship Fund, you're tapping into real estate's most attractive qualities. Long term appreciation potential, hedge against inflation, diversification for the stock market. All those things. Check, check, check. All this comes without complex paperwork. Massive down payments are the soul sucking landlord duties we all know about. So visit fundrise.compockets to explore the portfolio. Check out historical returns and see just how easy it can be to add real estate to your investing strategy. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. 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- [25:09]
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- [25:55]
Dave Meyer
Welcome back to the BiggerPockets podcast. We're here talking about inflation. Before the break, we talked about real estate. But I want to be honest and fair because frankly, I am a real estate investor. But if there were other ways that I could hedge against inflation or outperform inflation, I would consider putting my money there. So let's look at different asset classes and today we're going to look at savings accounts or just holding your money in cash. We'll look at bonds, we'll look at equities, and we'll look at gold. And if you're wondering why I'm not going into crypto, I just don't have enough data to make an honest analysis of whether that's a good inflation hedge. So I'm going to use these more historic, older asset classes like cash, bonds, equities and golds. That's not to say that crypto might not be a good hedge against inflation in the future. I just can't honestly tell you whether or not I believe it is. All right, let's start with the easy ones, which is cash and that's actually just holding onto your money in some sort of bank account or a money market account. And actually I should probably just mention if you're holding cash right now, whether you're waiting to make an investment or this is just your emergency fund or you just like having some cash on hand, please put it in a money market account or a high yield savings account. Because there is a big, big difference right now between what Chase or Bank of America is paying. They're paying like just quarter of a percent or something on their savings accounts. But if you go to other banks, I use Barclays or if you use Schwab or American Express or like Ally bank, there's all these other banks that are offering 4, 4 and a half percent or money market account can get you that 4, 4 and a half percent. So, so make sure to do that. That's just a no brainer if you're holding on to cash right now. Cash is not a bad idea, at least in my mind, because that four and a quarter, four and a half percent, that as a real return right now, an inflation adjusted positive return of about 1%. Right. Because if inflation's at 2.8 or 3%, you subtract that to from four and a quarter. I'm just going to round. It's actually a little bit higher. It's probably one one and a half percent right now, but let's just say it's 1%. That's a good thing. That means that you can safely hold cash right now. And that wasn't true for a while. Remember in 2022, even though the Fed raised interest rates, high yield savings account were maybe getting 3 or 4%, but inflation was at 9%. So at that point your real return on holding cash was negative 6%. You may have been on paper getting a 3% return from your money market account, but. But in terms of actual spending power, it was going down 6%. And that's why a lot of people didn't want to hold cash and continue to invest in either the stock market or real estate. Because putting that money in a high yield savings account was just watching it devalue and dwindle away. So that's good news, I think, is that holding cash in a money market or high yield savings account earns you a real return. Just as a reminder, I don't know if you guys watched, I put a episode out recently about one of my own decisions where I sold about 25% of my stock portfolio because I want to put it into real estate. And I actually took half of that money. I took out the stock market and I'm going to pay down my primary residence while I wait for more investing opportunities. And the other half I'm putting in a money market account because it's earning me a real return. And not everyone wants to do that. Right. I totally get that. But for me, I did this a couple, a month or two ago, I saw a lot of volatility in the stock market and I just thought, you know what, I'm going to take some risk off the board. And because I can earn a real return in a money market account, I'm going to park my money until I find the right rental property or multifamily property to invest in. So that's it. That's sort of like the vanilla way to hedge your bets against inflation. But remember, please, if you have your money in Chase or Bank of America or Wells Fargo that aren't paying four and four and a half percent you are losing money right now. If you are just getting a half a percent on your savings account, you are losing to two and a half percent of your money right now to inflation. Please don't do that. That's a no brainer. You can very easily avoid that outcome. All right, moving on from cash, let's talk about bonds. Right now bonds are basically lending the government money and earning a return on it. And you can get corporate bonds that pay higher rates. But at least for today's example, I'm going to talk about U.S. treasury, which are government bonds. Right now for a 10 year U.S. treasury, basically you're lending the government money for 10 years. You will earn about 4.2% yield on that money. So just using that calculation we've been using all day, if you subtract the inflation rate, you're getting about a one and a half percent real return. That's pretty good. What about long term? The average yield on a 10 year US treasury is similar to a money market account. And that makes sense because all these things are tied together, right? The Fed interest rate, bond yields, money market accounts, high yield savings accounts, they all kind of work together. So it's, it's not surprising to see that average be similar. But long term, if you invest in bonds, the yield, the long term real return is about 1%. And again, that is pretty good. But that is one of the reasons why bonds, generally speaking aren't the most exciting asset class. Right? At least to me. Bonds are a very useful part of the economy. They play a useful role in investing, but it's a preservation of wealth tax tactic as we've just seen. It's a great way to hedge against inflation, but it is not a great way to outperform inflation. And that's why a lot of people, as they get older, shift their assets into bonds because they maybe hopefully have earned enough money and they don't need to take the risk of owning stocks or, you know, they don't want to take on the hassle of owning a rental property. They just want their money to keep pace with inflation. So they move their money to bonds. But if you're in more of a growth mode personally like me, you don't want to just earn a 1% real return. You want to do better than that. Now I own some bonds, I keep some money in there to protect some of my wealth as a low risk investment, but it's certainly not where I put a lot of my capital because I want to do better than that 1% real return. All right. So we just talked about high yield savings account, money market accounts, and bonds, all earning about a 1% real return, meaning that they are good hedges against inflation, but they are not great at outperforming inflation. That brings us to the stock market. And there are many different ways that you can measure the stock market. But if you look at Investopedia, for example, a pretty good source, they say that the average real return, so adjusted for inflation, is about 6.4%. Again, people do this differently, so I'm just going to say 5 to 7%. So overall, that means equities are a really good inflation hedge and they actually beat inflation by quite a lot. That is, well, better than bonds, it's better than money market accounts. So overall, I think that's really encouraging. Right. The stock market is not just a good inflation hedge, but it's outperforming inflation and offering very significant real returns. Stock market, as I see it, returns better than bonds and better than money market accounts. And it actually gets into the realm of leveraged real estate just, just as a refresher. Right. I said that regardless of rents, if you just bought a primary residence putting 20% down, at least over the last 50, 70 years, you would have earned about a 6.6% real return. So that means the S&P 500 and owning just your primary residence with a 20% down payment loan have earned about the same real returns over the last several decades. So does that mean that, you know, the stock market is as good a hedge as real estate? I personally don't think so, because real estate offers a lot of those secondary benefits. If you buy a rental property, as an example, you get all those rent benefits that I talked about earlier. You also get a lot of tax benefits, so you get to keep more of those real returns. And so for me, that's why real estate outperforms the stock market in terms of, of real returns. And I think it's also important to note that the stock market and real estate market, even though the average real return is similar over the last several decades, what happens in any given year is pretty different because, yeah, there was a crash in real estate in 2008, but in a typical year, the real estate market, or in a typical decade, even the real estate market is just much less volatile than the stock market. So, so in real estate, you have a much higher percent chance in a given year that you're going to keep pace with inflation. The stock market is not true. You know, you see just over the last couple years, you know, two or three Years ago, we saw the stock market decline a lot. Then it's had two great years. And so that's why for retirement savings, the stock market people generally aren't as into it when you get really close to retirement because of that volatility and why a lot of people move to either bonds or to real estate to not just have that inflation hedge, but to have less volatility. Last one I'll get into is gold, because that is honestly, that's what everyone says, like real estate and gold, those are the two best inflation hedges. But honestly, that's actually not true. If you look at a lot of historic data. And I found this really good analysis from the CFA Institute, we'll put a link to that below. But it shows that one, gold is really volatile like the stock market. And actually they have this great chart that shows the real price of, of gold. And again, real is inflation adjusted. It shows that, yeah, we're at a pretty high mark right now, but it's actually pretty similar to where it was in the early 1980s. It's also pretty similar to where it was in 2011, 2012, adjusting for inflation. So gold is actually not as good an inflation hedge as most people think, or as conventional wisdom says it is. If you don't believe me, I highly recommend you look at the link that I'm going to put in here or just Google it, because you'll find a lot of sources that show the truth about gold. So that brings us to the end of our analysis here. And from where I sit, the summary is this. If you just want to take the most low risk approach and try to just have your money keep pace or minorly outperform inflation, putting your money in a high yield savings account, bonds or a money market account is a good option. If you are a really low risk type of person, this can work for you. But if you want to outperform inflation and see your net worth grow, see your spending power grow on top of inflation, you have two choices. You can either go into the equities market, that's putting your money in the stock market, or you could buy real estate. And as I've said, I think buying rental property, buy and hold rental property real estate is the best way to do that. How you allocate your capital between those sources is really up to you. If you want to be more passive and you're comfortable with volatility, the stock market offers pretty good returns. If you want to maximize your returns and you're willing to put in a little bit of effort to manage a real estate portfolio. The math and the analysis shows that real estate is indeed the best way to hedge and outperform inflation over the long run. That's my take. That's how I invest. I put some money in the stock market, but mostly invest in long term real estate assets because I think that's the best way to hedge against inflation and grow my net worth and spending power over the long run. I'd love to hear how you think about inflation in your own portfolio. So if you're watching on YouTube, drop us a comment below. Or if you're listening on the podcast, hit me up on Instagram and let me know what you think. Or you can always find me on biggerpockets.com thank you all so much for listening to this episode of the BiggerPockets podcast. We'll see you next time. Thank you all for listening to the BiggerPockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico, Content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. 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