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Returning to my earlier example: suppose I spend 30% of my income on a mortgage with fixed payments, and 70% on Stuff. If I have wage inflation of 7%, and the
by sethg 16y ago
Returning to my earlier example: suppose I spend 30% of my income on a mortgage with fixed payments, and 70% on Stuff. If I have wage inflation of 7%, and the price of Stuff goes up by 10%, then I have to spend a higher proportion of my income on Stuff, but I am spending a lower proportion of my income on my mortgage, so it precisely balances.
- dnautics 16y agoNo doubt, you are okay in that scenario. But people spending more than 70% on Stuff (i.e. people marginally poorer than you) are still screwed, and furthermore, the poorer they are relative to you the more screwed they will be.