If you’re worried about high inflation, leveraging debt against appreciating assets can be more effective than holding gold or Bitcoin.
• Inflation erodes cash, so having debt denominated in money allows repayment with devalued currency, effectively reducing real debt burden. • A practical approach is to buy property: put a small down payment, finance the rest with a mortgage, and keep remaining cash in other investments or cash equivalents. • In an inflationary scenario, property value rises while debt remains fixed, improving net position. In deflation, cash reserves cover the higher relative debt cost, mitigating risk. • Choosing assets carefully is critical; holding cash in deflation-sensitive assets or over-leveraging can increase risk. Access to credit markets varies by country and residency status. • Structuring loans and understanding local bank lending criteria is key to ensuring approval and optimal leverage.
Takeaway: Using strategically leveraged assets—like property with manageable debt—can protect wealth against inflation and deflation, while passive holdings like gold or crypto are not guaranteed hedges.
