Tangibles Investing in an Uncertain Economy: How a 42-year-old book holds the key to beat inflation

Everywhere you look, financial experts are warning we could see double-digit inflation in 2022. Like all bad news, it never comes at a good moment when our debts are all paid, our investments are doing well, and our jobs are secure. Life doesn’t happen that way. However, investment advice published 42 years ago in a book laid out a plan that still works and will show you how to beat inflation. Moreover, this plan is easy for anyone to do, is 100% risk-free, and guaranteed to save you money now and long into the future.

The Alpha Strategy by John A. Pugsley came out during double-digit inflation in 1980. It quickly became a national bestseller, staying on the New York Times bestseller list for nine weeks in 1981. The author, John A. Pugsley, set out to show average Americans how they could use the idea of tangibles investing as a hedge against rising inflation. Additionally, he showed them how the strategy could help them save and invest money for the future. He dubbed this strategy “The Ultimate Plan of Financial Self-Defense for the Small Saver and Investor.”

The core idea of The Alpha Strategy is to invest in what Pugsley terms “Level Four Consumable Products.” These are commonly-used tangible items like health & beauty products, cleaning products, clothing, tools and parts, paper & plastic products, home & yard maintenance products, vehicle maintenance products, food, and other miscellaneous products. These everyday household consumer products see price increases yearly, either by design changes, corporate re-branding, downsizing the packaging, or inflation. Pugsley showed how to protect yourself from inflation and save money over the long term by buying several years’ worth of each item you often use. Using The Alpha Strategy can mitigate the effects of inflation, giving you greater cash flow and savings.

Practical and Financial Self-Defense to Beat Inflation

Pugsley’s idea of “financial self-defense” is not only practical but easy to do for nearly everyone. You can invest in tangible products at today’s current low cost, which is guaranteed to be less than you will pay for the same item in two years, ten years, or twenty years. Once you know how much of a single product you use in one year and know its shelf life, you can invest by “buying ahead” as many years of it as you can afford.

The more years you can buy of a “year’s worth” of a product, is how you beat inflation. Just make sure you don’t buy more years than the maximum number of years of a products’ shelf life. With all this description of purchasing several “years’ worth” of numerous products, you’d think this was an expensive investment. Luckily, this strategy can be started with small amounts of discretionary income and is not out of reach for the average saver and investor.

For example, toothpaste lasts indefinitely. Your favorite brand of toothpaste costs $1.89. If you buy ten years’ worth of this toothpaste for yourself today, you have locked in the lower price for a decade into the future. That’s one less item you will need to pay for over and over again, and you never have to pay a higher price for it at any time in the next ten years.

Let’s Look At the Math:

The average household uses two toothpaste tubes each year, brushing twice daily.

So ten years’ worth of toothpaste will be 20 tubes (10×2 tubes = 20). Each tube cost $1.89×20 = $37.80 + tax at the current price. You may pay less for the same toothpaste if you purchase it on sale or with a coupon or buy all the toothpaste at a Dollar Store. However you do it, you have now eliminated the cost of this item for the next ten years. You will save the amount you pay, plus any cost difference based on rising prices due to inflation or the same cost for a smaller-sized tube. Either way, you save money.

Read More: Hygiene Supplies – How Much Do You Really Need?

How much can you save if you created your own “store” and stocked it with all the products you regularly use – up to ten years’ worth? Once you have a 10-year supply of something, you will not need to go to the store again to buy any more for ten years. So no matter what it costs in the years ahead, you already have enough on hand at today’s lower price.

It’s So Easy!

To utilize The Alpha Strategy, keep all receipts when you shop, so you can track what you buy. Next, write down all the level four consumer products you use and the current price for each. Then figure out how much of each item you use in a year. Once you have these numbers, you can budget your purchases. Finally, look up their shelf life.

If the shelf life of an item is ten years or more, stockpile ten years’ worth of it. Do this for as many items as possible on your list, provided each item will last that long or longer. (The Alpha Strategy has a long list of the Shelf Lives of Level Four Consumables in the Appendix at the back of the book. For a FREE copy of the book without the Shelf Life Appendix, SEE link at the end of the article).

Alpha Strategy

The goal is to know how much of each product you use in a year and purchase ten years’ worth of that product at the least-expensive current price to lock in those savings for as many years possible. If you can’t afford ten years’ worth of an item, then try to buy ahead seven years or five or three. Be consistent! Buy the same number of “years’ worth” of every product on your list, provided its shelf life is not less than that number. Do what you can afford, but get started!

How I Beat Inflation

I started doing this type of tangible investing by spending $60 at a Dollar Store and bought 10-year’s worth of 3 products I use all the time. After bringing the items home, I stacked them neatly inside a file cabinet I keep for storage at the back of my clothes closet.

Every payday, I took another $60 and repeated the process for more products I use all the time. Over 51 weeks, I built up my “store.” I now have ten years’ worth of 153 products I use all the time in my store. The cost to me was $3060, but I have ten years’ worth of the 153 items I use all the time. That $3060 will not need to be spent during the next ten years to replace these items because I have these items already on hand. When I run out of one, I go to the file cabinet and take out another.

The effect of doing this on my lifestyle was nearly immediate. I started to see that my spending went down each week, which improved my cash flow and allowed me to do other things with the money I wasn’t spending to replace any of these items. Granted, we are not talking huge sums of money here. Still, savings add up if you diligently apply this technique to ALL the consumer products you use on an ongoing basis. Depending on the size of your household, it can free up a few hundred dollars or much more each month, which you can invest, get out of debt or save for a rainy day.

Read More: Financial Preparedness: 5 Ways to Better Your Financial Situation

The Bottom Line

The Alpha Strategy is a common-sense way to protect from the ravages of inflation. Best of all – it’s 100% risk-free. As supply chains are breaking down, its’ good to know you have a modest stockpile of the items you need for years to come!

You can find a free copy of The Alpha Strategy online at The Wayback Machine, here: https://web.archive.org/web/20131220063428/http://zombieprepdotnet.files.wordpress.com/2012/01/book2-preface.pdf or purchase a copy on Amazon.

Author: This is a guest post by PJ Graves. PJ Graves is a retired award-winning radio broadcaster, news reporter and writer, whose news reporting has been featured on national radio networks and whose articles have been on Survivalblog, Prepper Website, Rapture Ready and various online news magazines. In addition to writing, PJ enjoys home church, living in Amish Country, exploring historic sites, classic films, cooking, volunteering at a local food bank, and small town living.

5 thoughts on “Tangibles Investing in an Uncertain Economy: How a 42-year-old book holds the key to beat inflation”

  1. Michael

    Excellent article. Reminds me of the Proverb about a wise-wealthy man’s house has fine foods and oils But the foolish gulp theirs down.

    Good job. Will check that link today.

  2. Linda T

    What are you going to do in 10 years when everything is used up and the price is way up? When things I use are on sale, I buy as much as I can afford and hope it lasts until the next sale. Usually there are items left over that go into long term storage. For Christmas stockings, I will add year’ s worth of hygiene products.

    1. Nonya B

      I started keeping a grocery ‘diary’, as per The Tightwad Gazette’ book. There WERE patterns! Ex: my local grocer had the best price on butter and had it on sale every three months. So I needed to track how much butter I used in three months and I saved lots of money. It all adds up.

  3. When one item is used up, simply replace it. Done this way, you will always have a 10 year supply at the lowest possible price during those 10 years. Or, simply wait until you have exhausted your supply of an item, then buy another 10 year supply of it all at one time. Either way, you are buying low relative to the economy at the time. Another good benefit to this method is, you have a stockpile of usable goods to barter with, should the entire economy collapse.

    1. You are absolutely right! Like any good investment, it profits you over time by saving money, including the cost of replacing a single item from your stockpile, once you use it up. Just like buying food in bulk amounts, bulk purchases of consumer products will always save you money over the long term. Thanks for sharing your insight!

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