Dear all!

I'm a novice, still finding my way through the world of Finance, I'm 24 and now having saved hard I am experienceing my first bout of Financial problems...as a graduate of this Labour Government all I know is steady interest rates and cheap money!!

I'm well up on basic saving, and inflation beating bonds etc but I have grown a little concerned at the more I read by some of the more experienced board memebrs that talk at inflation eating away at my savings, the pound having its strength sapped etc. I understand the concept that inflation wipes debt quicker whic is why for some it is favourabe.

My question is protection from this inflation..how can I protect my savings from it? Shift to a new currency that is more stable? If so is it just a case of exchanging my money on mass into a bank account of that nation? Having saved over 50k in three hard years I don't want to see its value wiped....help please!!

Stuart

Inflation walks abroad these days. I would suggest that you study up on precious metals; the perennial refuge in a time of crisis.

You might want to consider reading Peter Schiff's "Crash Proof".

Don't forget that you have to factor in the cost of currency conversion, and your deposit may not be insured if the bank goes bust. Plus predicting the movement of currencies is not exactly easy.

So this is the crunch question - You have a significant sum of cash, the safer building societes/banks only offer say 6.5%, less after tax, the real life inflation rate is more than that anyway, precious metals are volatile, the stock market may well be in for a choppy ride, so what to do?

Well there's always housing

Well actually there's more than a shred of truth in that statement, although I am sure you intended to be cynical. There will come a point, maybe soon, when buying at a sufficiently cheap price will make housing a viable place for your money. Look at the investor who bought 10 Barratt flats at 45% discount - in 5 years time that may look very shrewd indeed

Yes - in the medium to long term UK housing is a good investment. If I had the cash available I would look for very small properties in older developments - they will fall in value most in the short term, but there is always massive demand for small rental properties in the 400 - 525pcm rental range/band A council tax (in the South East).

You are right about older properties. If the local authorities are trying to buy unsold housing from the builders at knock down prices, there is a risk that those investment properties you buy very cheaply end up being in the middle of a chav infested council estate. Less likely to happen to older properties.