If there is one word that has marked 2022 and threatens to remain the protagonist in 2023, it is inflation. The systemic rise in the prices of the goods and services we buy and consume affects businesses and families and hampers their purchasing power. Protecting your money from inflation is essential so that you can safeguard the value of your savings against rising prices.
Small savers have to work hard to accumulate an amount of money that will help them feel secure in the face of possible changes in their lives. What we commonly refer to as a financial cushion. If these savings are in the bank, without moving or being used to make any kind of investment, their value slowly deteriorates in the context of low inflation.
However, at a time like the present, when inflation is at its highest level since the 1980s, savings are devalued day by day as a result of rising prices. So what we could buy with 10,000 euros last month is no longer the same as what you can buy today.
In this article, we are going to analyze what role alternative financing products can play to help small savers invest their money and make it profitable to counteract the effect of inflation.
Your savings are being devalued every day
Some experts estimate that inflation will subtract 42 billion euros of purchasing power from Spanish families between 2022 and 2023. We are, therefore, facing a loss of purchasing power of great magnitude.
When we translate these macroeconomic figures to the day-to-day life of businesses and working people, we find that a professional's salary is no longer enough to maintain the same rate of spending and saving as previously.
This reduces people's ability to save but also undermines the value of savings that had been achieved previously and those that, despite inflation, are still being generated today.
What can we do in the face of this adverse macroeconomic scenario? Do we have to resign ourselves to the fact that our savings will lose value? Is there no escape from the loss of purchasing power? Our savings are not only an asset to be protected but also a weapon at our disposal.
How can you protect your money from inflation?
If you let your savings sit in your bank account without moving, you are exposing them to the effects of inflation.
On the other hand, if you invest your savings, you will be protecting your money from inflation, since you will be able to get a return and obtain economic benefits that compensate for the consequences of price increases.
In this sense, alternative financing platforms such as Inversa Invoice Market, become strategic allies for any small saver who wants to invest his money and protect the value of his savings.
Why? They put at your disposal attractive investment products and services with a high degree of autonomy so that you can decide in what and in whom you invest your money and can achieve profitability in the short term and increase your savings.
Alternative financing to counteract the effects of inflation
Life is full of challenges that we have to face. The current inflationary situation, with the CPI standing at 7.3% in Spain in October, brings with it more than a few challenges for families and businesses.
To successfully surf the rising prices, small savers have to take matters into their own hands and opt for solutions such as investing their money in search of profitability.
Beyond the investment products offered by the traditional banking system, the technological revolution has led to the emergence and consolidation of alternative financing.
Thus, platforms and marketplaces have emerged that offer investors products and services that meet their needs and interests, democratizing the possibility of investing our savings, however small they may be and obtaining, in exchange, interest or other economic benefits.
For example, through crowdlending, thousands of small savers can lend money to a company to help it obtain liquidity and, in exchange, obtain interest on the loan.
While through crowdfactoring, a small investor can finance a business invoice, recover his investment in a short period, and also obtain a return on this operation.
Faced with the concentrated banking system's catalog of investment services, alternative financing platforms offer multiple products that can be adjusted to the needs of small savers, which makes it much more attractive to bet on investment to protect money against inflation.
Protect your money while helping other people protect their businesses
The great leitmotiv of alternative financing platforms such as Inversa Invoice Market is to serve as a bridge between small savers and companies in the real economy. Facilitating and empowering the possibility for people to invest in other people.
Just as inflation affects the value of our savings, it also has a monetary impact on the businesses that make up the real economy, as their operating costs and expenses are affected by rising prices. From a company that consumes a lot of energy to carry out its economic activity to a business that buys raw materials and transforms them into finished products.
This context makes alternative financing very attractive for small savers because it allows them to protect their money against the effects of inflation, but also because with their investments they can help companies to weather the rise in prices. A fantastic 2-in-1 that allows us to make the most of our savings while strengthening the productive fabric and the local economy.
In short, the rise in inflation that has occurred throughout this year and is predicted to continue next year is already impacting our savings and their value. With the same amount of money, we cannot buy the same goods or services as we could just a year ago. Hence, small savers need to take proactive steps to protect their money, and investment is certainly a value-added strategy to get value from savings and prevent them from being devalued in bank accounts.
Alternative financing opens up multiple ways for investors to make the most of their savings and, in the process, help other people and businesses to obtain economic resources with which to combat the pernicious effects of inflation.