With the changing global economic landscape, inflation has become one of the most pressing issues in people's lives in 2025.
According to the latest International Monetary Fund (IMF) report, global inflation has reached its highest level in years, and the Consumer Price Index (CPI) in many countries continues to rise. In particular, the cost of basic living items such as food, housing, and healthcare has skyrocketed. This phenomenon not only challenges the quality of life for ordinary consumers but also has led to a growing concern about how to protect their wealth amidst the pressures of inflation.
Prioritize defense, prioritize liquidity
- Increase cash reserves:
Set aside at least 6-12 months of living expenses for yourself and your family. This can be stored in highly liquid assets, such as money market funds like Yu'e Bao or bank T+0 wealth management products, offering an annualized return of approximately 2%-3% with ready access. This will help prevent unexpected setbacks such as unemployment or an economic recession.
- Reduce high-interest debt:
Prioritize paying off high-interest debt, such as credit cards and consumer loans, to reduce the pressure of a floating-rate mortgage. Some credit card installment plans currently have an actual annualized interest rate of over 15%. Prioritize paying off these funds to avoid them being swallowed up by high interest rates. If your mortgage has a floating rate (LPR) and the Federal Reserve is still hiking, you can repay part of the principal in advance to reduce interest expenses.
Diversify your risk and hedge against uncertainty
- Inflation-resistant assets can help you diversify your risk:
Physical gold is a good investment. Given the ongoing increase in gold holdings, consider allocating 5%-10% to gold ETFs or physical gold bars to protect against inflation and geopolitical risks.
- Geographical risk diversification:
Investing in overseas assets (such as the S&P 500 ETF and global bond funds) through channels like the Hong Kong-Shanghai Stock Connect and QDLL can mitigate the risk of a single-bar market. Additionally, bonds in some countries (such as Indonesia and India) offer attractive yields, but be wary of exchange rate fluctuations.
- Safe-haven currencies can help you diversify your risk:
Hold some cash in US dollars, Japanese yen, or Swiss francs, especially when the RMB exchange rate fluctuates more.
Conclusion
Inflation isn't a choice; it's a matter of survival. In 2025, 130 trillion yuan in deposits are silently shrinking. However, every upgrade in financial management awareness is a step towards reclaiming wealth sovereignty. Remember: there's no easy win strategy for combating inflation, but smart investment strategies can save you money. Starting today, sow the seeds of your future with index funds, hedge risk with regular gold investments, and build a strong defense with upgraded skills—every action you take will rewrite the course of your wealth.