Warren Buffett outlines two powerful ways to protect your wealth from inflation:
- Invest in yourself.
Your skills and reputation are assets that can’t be taxed away or diminished by inflation. Buffett emphasizes becoming highly skilled—whether in medicine, tech security, or any field where quality matters. The more exceptional your ability, the easier it is to command higher wages or fees, even as costs increase. Unlike machines or property, your earning power grows without needing large capital outlays or expensive upgrades. - Own businesses with strong pricing power and low capital demands.
Buffett suggests investing in companies that don’t require huge ongoing investments in factories or equipment, but that nevertheless can raise their prices without losing customers. Brands with enduring demand, subscription-based software, established consumer goods firms, or royalty/franchise models often fit this profile. These businesses can maintain margins and generate cash flow even when inflation bites, helping investors preserve purchasing power.
Buffett’s message: prioritize improving your own human capital and choose investments wisely—businesses built to thrive under inflation rather than be crushed by it.
