Have you noticed the prices of everything around you lately? If not, where the hell have you been?! It is CRAZY how everything is getting more and more expensive, yet nurse practitioners are getting paid less and less (that is a different story…).
Significant inflation has hit the world folks, especially the United States. This is something that you need to be aware of and that you need to care about if you care about your financial health and wellbeing.
Inflation is defined as a general increase in the price of goods and a fall in the purchasing value of money. One dollar buys fewer goods and services as compared to the past. Inflation reflects a reduction in the purchasing power of money. Essentially, inflation means the DESTRUCTION of a currency, and it is happening right now because the money supply has increased significantly.
Everything from airline tickets to hotel costs, from food prices to gasoline, and from the cost of purchasing new/used cars and homes has been on the rise over the past year, and even more in the last 3-4 months.
I bought a new GMC 1500 in 2019 as a gift to myself after a divorce. New cars are supposed to depreciate when they are driven off the lot right? Not anymore. I could actually sell this truck for $1000 less than what I paid for it and it has 35,000 miles on it… I have a friend who sold his Toyota Tacoma for $3,000 more than he paid for it 2 years ago. It is ridiculous.
Have you looked at real estate prices recently? It is absolute insanity. Prices have increased upwards of 50% in some areas. I have a vacation condo I purchased 2 years ago for $110,000 that I could sell for $160,000 now. Another rental property of mine has gone up $70,000 in value in the last 6 months. I could list these and have them sold in a matter of days because people have lost their minds. It is pure chaos… (DO NOT BUY A HOUSE RIGHT NOW JUST FYI!).
Gasoline is up 20%.
Beef, pork, and milk are up 10-15%.
Building supplies raw materials have increase 10-40%.
The point is, the inflation rate for the last year is 5%, which is the highest it has been since 1990.
One dollar one year ago is now worth 95 cents. Now, this might not seem like a big deal, but when you multiply this 5% loss of our spending power by the United States gross domestic product of 2020, which was approximately 21 TRILLION dollars, you are looking at a dollar value loss of approximately 1 TRILLION dollars from the economy. That is a lot of money.
On average, whatever you bought for $100 one year ago will be $105 this year.
Why is this?
The government injecting $8 trillion dollars into the market through “stimulus.” Basically, $8 trillion dollars appeared out of thin air and was thrown into our money supply…
The national debt.
High demand for products/houses/services with less supply.
Regardless of the reasons, I just want everyone to be aware of this. Why it is happening doesn’t matter that much, but what is important is what YOU CAN DO about it. Remember, you can’t change the world and what is happening, but you can change your OWN circumstances.
Here is a list of what you need to do in your business/practice:
- Increase your prices- I have increased prices by $5-10 across the board on everything I am providing (minus Elite NP courses because I love you guys). My monthly HCG costs have gone up $10, monthly concierge subscription fee $10, tadalafil $5, and peptides $10. Guess what? No one has said a thing.
- Negotiate your costs- Yes, the prices are even going up at the pharmacies. Before you get hit with an increased bill on compounding pharmacy medication or supplies from a supplier like McKesson, talk to your rep. Chances are, you were being overcharged anyways.
- Consider locking in your lease- If business is good and you are comfortable at your current office location, then call the landlord and ask if you can go ahead and extend your lease at the current rate or even cheaper with a longer commitment. Trust me here, commercial and residential rents ACROSS the board are going up.
- Invest business profits- Don’t let your business cash reserves just sit in the bank, throw it into a stable mutual fund and let it earn a little money for you or invest it into your self-employed retired account like 401k or IRA now vs. the end of the year! OR…
- Reinvest back into your business- This is what I am doing. I generally do not trust the nature of the world right now, so I want to invest my money in something I have control over: MY BUSINESS. So, keep that in mind.
- Employment inflation- If you have employees, you better be prepared to increase their pay… We are starting to see widespread increases in pay across the country for low level jobs. Many large corporate enterprises such as McDonald’s and Chipotle are increasing their minimum hourly rates to $15 an hour. What does this mean? That pay will go up across the board (except for NPs I am sure). So, if you have employees, you better be increasing their pay or they will go elsewhere.
Here is a list of what you need to do in your personal financial life:
- Invest your money- Outside of your emergency fund, don’t let your money sit in your bank account doing nothing! The stock market right now is trending with inflation. Put your money there and let it grow. It is LOSING VALUE sitting in the bank friends. Seriously, read that again. YOUR MONEY IS LOSING VALUE SITTING IN THE BANK.
- Sell off assets- If you have any real estate, used cars, jewelry, collectibles, etc., consider selling them off now. The price of almost everything at are all time highs. I don’t know how long it will last, but take advantage of it while you can if the asset is doing nothing for you or if you have no long term plans with it.
- Diversify your holdings- Other than investing in the stock market, consider investing in a few other items like gold, dilapidated cars/houses, and anything else that you can find at a good deal. There are still good deals out there, you just have to find them. Be as redundant as possible!
- Be frugal- Live below your means! Prices are high right now, so don’t go off spending a lot of money. Try to be reasonable with your money and only make smart decisions. Do not buy outrageously expensive assets like new cars, a new home, swimming pools, 4 wheelers, and other high dollar items. Everything is at the TOP OF THE MARKET right now. Don’t be a fool.
- Be watchful- Keep your eyes on the market and what is happening around the world. Instead of scrolling through your Instagram feed, spend 15 minutes a day reading financial news. Seriously, being informed is a great way to protect your money.
Inflation is happening, and I fear many of these inflated prices are here to stay with certain products and assets. Your dollar is worth less than what it was last year, yet salaries are not keeping up with this. The good news as a nurse practitioner entrepreneur though, is that you are in control of your pricing and your income, therefore, you can stay ahead of the game. Try to hold onto the value of the money you work your ass off for. It is sickening to watch it literally evaporate into thin air.