‘People can’t afford life anymore’: Eric Trump claims he spent $130 to fill up his SUV but Americans have questions — 3 ways to hedge against inflation even as it cools

Online skepticism

Trump’s claim about his $130 fill-up sparked a wave of skepticism online.

“What kind of SUV is he driving? Mine costs me about $55 at Costco gas,” commented lawyer Bradley P. Moss on X.

Another X user, Lisa Deeley Smith from Arlington, Massachusetts, questioned the math, stating, “If he has a 20-gallon tank, he's paying $6.50 a gallon.”

This price per gallon would be significantly higher than the national average price of $3.261 for regular gas reported by AAA during the week of Trump's interview.

The cost to fill up a vehicle can vary greatly, depending on the size of the gas tank, the type of fuel used and the location of the gas station. Is a $130 fill-up feasible? Let’s crunch the numbers.

Trump did not disclose the make and model of his vehicle. However, the current generation Chevrolet Suburban — an SUV frequently used by the Secret Service — boasts a large 28-gallon fuel tank.

California typically reports the highest gas prices in the U.S. According to AAA, during the week of the interview, the price for premium gasoline in California was $5.109 per gallon.

Therefore, if Trump were filling up a Suburban in California from empty with premium fuel, he would be paying 28 x $5.109 = $143.052. Thus, a gas bill around $130 is within the realm of possibility.

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Protecting your purchasing power

Whether you buy into Trump's $130 fill-up story or not, the reality is that inflation affects everyone by eroding the purchasing power of money — and gasoline is just one example. And although the headline inflation rate has seen a decline since its peak in 2022, it’s the rate of increase that has eased, not the high prices themselves. Many essential items, in particular, continue to be priced at elevated levels.

For instance, the food CPI has increased by 26% since the beginning of 2020. Similarly, the shelter index has risen by 24% during the same period.

The silver lining? Nowadays, there are plenty of accessible strategies for investors to shield themselves from inflation’s bite.

Real estate

Real estate is a well-known hedge against inflation. As the price of raw materials and labor goes up, new properties are more expensive to build. This drives up the price of existing real estate.

Well-chosen properties can provide more than just price appreciation. Investors also get to earn a steady stream of rental income. Since rent typically increases with inflation, this creates an effective hedge against the diminishing purchasing power, thereby preserving and potentially enhancing the investor’s real income over time.

Over the last five years, the S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index has surged 54%.

Of course, that also means properties are not cheap these days, especially with elevated mortgage rates.

But you don’t need to buy a house to start investing in real estate. There are plenty of real estate investment trusts (REITs) as well as crowdfunding platforms that offer everyday investors access to institutional-quality property portfolios, allowing them to earn rental income without the responsibilities of being a landlord.

Gold

Gold is another well-known hedge against inflation. The yellow metal has been used as a store of wealth for thousands of years.

Unlike fiat money, gold can’t be created at will by central banks. So, its value isn't tied to any particular currency or economy, making it a stable asset during periods of economic instability and inflation.

Last year, economist Peter Schiff told investors that the metal was underpriced due to persistent inflationary pressures.

“I think it has to be repriced higher to reflect the reality of much higher inflation. We’re not going to go back to 2%, probably in my lifetime,” he said. “It’s going to be much higher than that, and when investors come to terms with that, they’re going to bid up the price of gold much higher.”

Fast-forwarding to the present, the enthusiasm of investors has indeed propelled the price of gold to record levels. The precious metal has surged past the $2,500 per ounce mark, setting a new milestone.

These days, there are many ways to gain exposure to gold. You can own bullion, buy shares of gold mining companies or ETFs or even tap into potential tax advantages with a gold IRA.

Equities

In January 2024, the non-profit Oxfam reported that the world’s billionaires have become $3.3 trillion wealthier than they were in 2020, with their wealth increasing at a rate three times faster than that of inflation.

For some of the most famous billionaires, a substantial portion of their wealth is linked to the companies they founded or currently manage. As inflation drives up costs, businesses that can successfully pass these costs onto consumers through higher prices can maintain or even grow their profit margins. This, in turn, can lead to increased earnings and potentially higher stock prices.

The Oxfam report highlighted how large firms were making oversized profits during inflationary times, noting, “148 of the world’s biggest corporations together raked in $1.8 trillion in total net profits in the year to June 2023, a 52% jump compared to average net profits in 2018-2021.”

While stocks are also volatile, the market has performed remarkably well during the recent inflationary period. The S&P 500, for instance, has seen a 90% increase over the last five years.

Oxfam also observed that share ownership “overwhelmingly benefits the richest,” with the top 1% owning 43% of all global financial assets.

But you don’t have to be in the billionaires’ club to access the stock market. These days, many platforms enable you to buy and sell stocks with minimal initial investment requirements. Some apps can even help you invest in index funds like the S&P 500 automatically using your spare change, making it easier than ever to grow your wealth alongside the world’s financial elite.