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It’s Valentine’s Day week, and there is no better gift than ensuring the financial well-being of your loved ones and family. Financial gifts express how much we truly care about our loved ones, acting 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 is really important is the idea that has been put behind a particular gift. So, in times when inflation is high, here are some financial gifts worth considering for your partner/wife before this Valentine’s Day.
So, the rule of thumb is to reduce your cash holdings and switch to real assets is the key principle to beat high inflation. “Whether inflation is high or low, it affects your real returns from any investment, hence it is important to always be aware of inflation,” said Kush Vatsaraj, Tax Consultant, Vatsraj & Associates.
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Gold is more than just a precious metal, especially in India. It has somewhat sentimental value in the hearts of millions of Indians. Well, speaking of touching hearts, gifting gold to your partner in the form of sovereign gold bonds, gold ETFs, and/or gold provident fund will definitely achieve that goal.
“Normally, gold is a traditional hedge against inflation and volatility (for example, look at the price of gold in 2020 compared to most other asset classes that have lost value). One should always have a portion of their portfolio dedicated to gold,” explained Vatsaraj.
Cryptocurrency
You can gift cryptocurrencies or non-fungible tokens (NFTs) through a cryptocurrency exchange to your spouse or partner. If you are not an existing investor, you will need to open an account after doing your KYC. Once inside, you can buy cryptocurrencies and send them to the wallet address of the person you want to gift. Some exchanges, including Coinbase, Binance, CashApp, and Robinhood, also allow their subscribers to purchase crypto gift cards.
Vatsaraj said, “Proponents of decentralization and cryptocurrency are skeptical of the intrinsic value of fiat currencies and they blame inflation on oversupply and uncontrolled printing by governments. Therefore, cryptocurrencies have emerged as an alternative investment to protect against inflation, especially with the newer generation of investors.”
Both gold (in the form of jewelry or coins) and cryptocurrency or NFT will also make a great gift for your partner and will also help them beat inflation. However, with gold, the Indian mentality is to buy, not sell, so holding gold ETFs instead of physical gold may make it easier to actually sell when the time comes.
Other than these, commodities (including commodity ETFs), index funds, inflation-indexed bonds, and real estate (or REITs for investors with less capital) are other assets that are popular options to beat inflation.
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