How to “Inflation Proof” your earnings

How to “Inflation Proof” your earnings

[The following has not been verified with a tax professional and is offered for informational purposes only. Use this information at your own risk and seek competent, professional advice for your own personal situation.]

With the prospect of high inflation on the horizon it is now more important than ever to protect your assets and your earnings.

Here is a unique way that you can do this:

Simply ask your employer to pay you in One Dollar Silver American Eagles or Fifty Dollar Gold American Eagles instead of paper dollars. These coins are legal tender and are fully acceptable in commerce.

Example: Let's say you currently earn $2,000 per month from your job. The current price of a One Dollar Silver American Eagle is approximately $16 (as of 12/27/08). Divide $16 into $2,000 and you get 125 X One Dollar Silver Eagles. This is what you would ask your employer to pay you: $125 per month in the form of One Dollar Silver Eagles!

Now here is where it gets interesting...Your monthly earnings are now only $125! Suggest to your employer that your new withholdings be based upon $125 instead of the $2,000! Could it be that you can now claim only $125 per month in income and get a reduction in your income tax liability?

If you cash in these Silver Eagles for paper dollars then you could have a capital gain and be subject to additional tax. But what if you offered to pay your expenses with One Dollar Silver Eagles instead of paper dollars? When buying a $16 (paper dollar) item why not offer a One Dollar Silver Eagle instead? If they accept it, ask them to give you a receipt for “One Dollar”.

How can you make it easy for your employer to pay you this way? They certainly do not want to run around scouring coin shops to buy Silver Eagles and then try to deal with the transport, storage and security before they pay you. There is a better way. Each pay period simply have your employer order from an online coin dealer and have the coins drop-shipped to your doorstep. No hassles.

For your employer, might it be presumed that they bought the assets (silver dollars) for $16 each and then traded them to you for $1 resulting in a $15 loss on their books?

Now what if you own your own business? The same concept can apply and it is probably easier. Price your products and services in One Dollar Silver Eagles and have your customers pay you via the drop-ship method as well. Also, why not go ahead and pay your employees the same way? They may work a little harder and stick around a little longer knowing that you are looking out for their best interests!

Of course this is all easier said than done but I hope I have given you ideas on how you can protect the purchasing power of your earnings.

If all else fails, take your regular pay and buy silver and gold. When you see the price of these metals rising start asking for pay raises (if employed) or raise your prices (if you own your own business).

To your success!
The Bullion Insider