If You Think Inflation Is Only About 2%, Think Again
What you are thinking about is Consumer Price Index (CPI). CPI is based on average of increase in prices of a variety of items. While it is true that electronics, toys, cars, etc have become cheaper, inflation in prices of essential items such as housing, health care, child care, education, etc. is up to 4X of CPI. Therefore, real inflation for a typical American family, which spends most of its household earnings on essential items, could be as high as 8%!
Why Does Nobody Seem To Care About Inflation?
Inflation is everywhere but nobody notices it because it is invisible. You’d realize that you aren’t getting much raise at all if your employer reported your yearly raise in inflation-adjusted dollars. You can certainly feel inflation even though it’s not easily noticeable. It’s one of the reasons why you can’t seem to get ahead. Once becoming a Millionaire used to mean that you were set for life. Now, you cannot even buy a decent house with Million dollars in many cities.
Thrive With Inflation
Inflation can be your friend or foe depending on which side of equation you are on. Inflation is your foe if you are a saver. Inflation is your friend if you are an investor in real estate and other hard assets. Your investment becomes more profitable with rising inflation as rents go up but mortgage stays the same when you strategically invest in real estate. You have essentially hedged your earnings against inflation. Please don’t die with inflation. Thrive with Passive Real Estate investing.
P.S. High-paid professionals are always wondering where to invest their savings. They don’t want to take more risk with stocks because they already have lot of money invested in stock market. Not knowing where to invest, they end up with lazy money sitting in bank.
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