It is the Valentine’s week, there is no better gift than ensuring the financial wellbeing of your loved ones and family. Financial gifts express how much we truly care for our loved ones, as the guardian angel of positive change in their lives and adding to their financial freedom that can empower them in the long run. However, while gifting the thing that really matters is the thought that has been put behind a certain gift. So, in times when the inflation is high, here are worthy financial gifts to consider for your partner/wife ahead of this Valentine’s Day.
So, the thumb rule is to reduce your cash holdings and switching to real assets is the core principle to beating high inflation. Kush Vatsaraj, tax consultant, Vatsraj & Co., said: “Whether inflation is high or low, it affects your real returns from any investment and therefore it’s always important to be mindful of inflation.”
Gold
Gold is more than just a precious metal, especially in India. It has a rather emotional value in the hearts of millions of Indians. Well, talking about touching hearts, gifting gold to your partner in the form of Sovereign Gold Bond, Gold ETFs and/or a Gold saving fund will certainly fulfill that goal.
“Normally, gold is considered to be one of the conventional hedges against inflation and volatility (as an example, see the price of gold in 2020 compared to most other asset classes which lost value). One should always have some part of their portfolio devoted to gold,” Vatsaraj explained.
Cryptocurrency
You can gift cryptos or non-fungible tokens (NFTs) through a cryptocurrency exchange to your wife or pertner. If you are not an existing investor, you would need to open an account after doing your KYC. Once in, you could purchase digital currencies and send them to the wallet address of the person whom you want to gift. Some exchanges, including Coinbase, Binance, CashApp, and Robinhood, also allow their subscribers to buy crypto gift cards.
Vatsaraj said: “The proponents of decentralization and cryptocurrencies are skeptical about the intrinsic value of fiat currencies and they blame inflation on it’s oversupply and uncontrolled printing by governments. Cryptocurrencies, therefore, have emerged as an alternative investment to protect against inflation, especially with the newer generation of investors.”
Both gold (in jewelry form or coins) and cryptocurrencies or an NFT would also make a nice gift for your partner and will also help them beat inflation.However, with gold the Indian mentality is to buy and not sell, so holding Gold ETFs instead of physical gold may make it easier to actually sell when the time is right.
Other than these, Commodities (including Commodity ETFs), index funds, inflation-indexed bonds, and real estate (or REITs for investors with less capital) are the other assets that are popular options for beating inflation.
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