2 Best Investments To Beat Inflation, According to Warren Buffett

Since the onset of the COVID-19 pandemic nearly five years ago, the U.S. has experienced 40-year record-high inflation that has just over the past year started to cool down. As per the U.S. Bureau of Labor Statistics, inflation as of November 2024 hovers at around 2.7%.

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While this is a huge decrease from June 2022, when the Consumer Price Index (CPI) peaked at a whopping 9.1%, periods of high inflation are always bound to happen over time.

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One person who knows how to beat inflation? Warren Buffett, the “Oracle of Omaha” and CEO of Berkshire Hathaway Inc.

Buffett has an estimated real-time net worth of $142.3 billion as of Dec. 20, 2024, according to Forbes. It’s clear that he knows more than a thing or two about how and what to invest in and how to shield your money against the effects of inflation.

Here are Buffett’s two investment recommendations for anyone looking to beat inflation.

Inflation can affect the value of currency and have far-reaching effects on your personal finances. However, there’s one investment that can never be affected by inflation: your skillset.

“Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you,” he said in the annual Berkshire Hathaway meeting in 2022. “The best investment by far is anything that develops yourself, and … it’s not taxed.”

If you possess or develop a skill that is in high demand, odds are it will remain in demand — no matter the current CPI or the value of a dollar.

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One other smart investment that Buffett believes in is real estate. Why? It’s because of its intrinsic value. Unlike stocks or cryptocurrency, real estate is a tangible asset, which makes it less susceptible to market volatility.

“They’re the businesses that you buy once and then you don’t have to keep making capital investments subsequently,” explained Buffett during a Berkshire Hathaway shareholders meeting. “You do not face the problem of continuous reinvestment involving greater and greater dollars because of inflation. That’s one reason real estate, in general, is good during inflation.”

Real estate generally appreciates over time, and during periods of high inflation when the value of money diminishes, the value of real estate typically rises.

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