How a Biz Kid Can Beat Inflation

Another day, another inflation-related headline. Today, the Bureau of Labor and Statistics (Just imagine how many calculators are floating around that place!) released their estimate of the average rate of inflation, calculated by comparing prices of common goods and services in April 2022 to those of April 2021.

Their conclusion? The US dollar essentially had 8.3% less buying power, as the cost of goods shot up 8.3%. What does that mean for you? Well, if your income is fixed – say, by an hourly wage or annual salary – you basically have 8.3% less to spend than you did a year ago, even though the numbers in your checking account haven’t changed.

So what’s a Biz Kid to do? Here’s a piece of advice from Warren Buffett, offered just a couple of weeks ago during the question-and-answer session of his company’s annual shareholders meeting:

His perspective: “The best thing you can do is to be exceptionally good at something.” His argument is basically that, if you have world-class talent, the rates you can demand for your good or services will likely be inflation-proof.  

That may be difficult news for some, but it’s sage advice for Biz Kids. Time is on your side, as is the source of your income. You can still hone a skill that the world demands. And if you invent a product, you may be able to price it accordingly. As an entrepreneur, you have more levers to pull than someone whose salary is controlled by a boss or corporation.

The bottom line? Yes, inflation is causing pain at the dinner table, the gas pump, and elsewhere. But in times of steep inflation, it pays to be a Biz Kid.