I would sincerely appreciate your advice on the following topic: what kinds of investments are available in Canada to offset (at least, partially!) the impact of inflation?
I am not a financial expert, however, price increases that I see around look substantially higher than CPI numbers, published by the government. On the other hand, it seems to me that the Bank of Canada decided to support real estate market while sacrificing the purchasing power of the dollar. Therefore, high inflation is here to stay for years. This is my personal non-expert assessment of current situation.
My only source of income is my salary. I do not work for real estate or construction or oil/gas or other high-income industry. I managed to save some money, but now I sit and watch my money being destroyed by inflation.
- I am afraid of buying real estate. I do not think it is doable on a single income. I also observe that property taxes are going up consistently everywhere. I am afraid that I will lose both the property and money, should I get sick or lose my income.
- There is no Treasury Direct in Canada, so I cannot buy T-bills directly from the government as people can do in the USA. T-bills pay around 4.5% annual now.
- “Real Return” bonds (i.e. inflation adjusted bonds) have been discontinued by the government of Canada.
- Interest rates on saving accounts in “big 5” Canadian bank are miserable. I do not trust those new “on-line banks” without physical branches, so I am not looking at those.
- The only option, which I see, is to open a brokerage account in my TFSA and buy some high-dividend stocks within the contribution limit.
- I have never owned a business. I do not know how to run a business and, frankly, I have no business ideas.
Am I missing something? Are there other ways to at least partially offset impacts of inflation?
I never gambled, but now I feel stupid because I have not gambled on Robinhood or in cryptocurrencies. It seems to me that savings and 9-5 jobs are pretty much dead and the only unfortunate way forward is gambling with all the risk it entails.