Invest Smarter: How Austrian Economics Helps You Make the Most of Your Funds!

By Individualist Iguana

- 2 minutes read - 300 words

The specter of economic downturns looms ever-present, with savvy and thoughtful financial management the only way to weather the chaos. Trying to plan ahead is a fool’s errand, of course; after all, crises by definition are unpredictable. Even so, those with a mastery of financial strategies–and a willingness to think critically about the fluid factors of a continually changing economic landscape–stand to benefit the most from their investments.

History is populated with lessons from great investors and theorists. Take, for instance, the Austrian school of economics. While famous for its focus on the control of market forces by government, there’s a larger lesson here that applies to individual investors: consider the wider landscape when choosing how to spend your funds.

Let’s focus on inflation, as an example. While central banks can effect broad macroeconomic movements, the inflationary (or deflationary) pressure is most acutely felt by the individuals and households dealing with the highest day-to-day costs, such as food, rent, and consumer goods. Austrian economics encourages investors to consider the wider economic context, so that they may be better poised to weather potential crises or take advantage of potential growth.

It’s important to start small. Refrain from being caught up in the hype of speculative investments - no matter how strong your FOMO might be, but instead invest in hedges against inflation and deflation, such as gold. This can protect your portfolio in unpredictable economic times, giving you the security to weigh in on investments more confidently.

Finally, it’s essential to reinvest your dividends and remain consistent. Continually invest your money to ensure that even a minor return compounds over time, creating the potential for real returns. Austrian economics may suggest broader economic movements, but the individual investor stands to benefit most from a rigorous and consistent approach to financial management.