smart spending

5 ways to outlast deflation

5. Look for opportunities 

Consumers who have secure jobs, emergency funds set aside and sound financial plans may find that a deflationary economy is a great place to scoop up bargains.

Falling prices already are creating opportunities. Some first-time homebuyers are finding homes selling for 25 percent less than sellers were asking a year ago.

People beginning to build an investment portfolio now have a chance to buy stocks of solid companies at bargain basement prices.

Deflation also can offer opportunities to save on smaller purchases. For example, travelers may find trips offered at big discounts.

"During the Great Depression, there were a lot of millionaires created. These were people who took advantage of the opportunities that were in front of them," says Doug Lockwood, a Certified Financial Planner at Cornerstone Wealth Management, a consulting firm in Auburn, Ind.

By investing in assets when prices are low, consumers can use an episode of deflation as a rare opportunity to build wealth, Lockwood says.

"Ten years from now, we'll have a large number of people sitting back and saying, 'I wish I would have,' or 'I wish I could have,' and they're going to be talking about right now," he says.


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