3 ms·

Change is scary. Change for the worse is terrifying. From my observation, most people rightfully assume their incomes aren’t going to rise very fast, if at all

Change is scary. Change for the worse is terrifying. From my observation, most people rightfully assume their incomes aren’t going to rise very fast, if at all. We’re in a world where some people would call a 3% annual raise “generous”. The correct and only way to get by inflation without getting pinched is to make sure your income raises to match cost of living increase. But a lot of people don’t live in the rat race so this might not be obvious and certainly doesn’t feel desirable. As someone living in the urban rat race, inflation doesn’t feel like a big deal. In the 2010s amidst “low inflation” I saw rents rise in my city astronomically. In the same time period I worked / negotiated to increase my own pay astronomically. Prices go up, income goes up, life goes on.

saltcured 3y ago
For those with some savings, you also need to understand how to get into inflation-resistant investments if you want to not be pinched by savings. Otherwise this spiral of increasing wages makes your prior savings irrelevant. On the other hand, those with some debt need the financial wisdom to use their spiraling wages to pay down debt principal and not let the debt spiral due to increasing interest rates. So, high inflation can be a kind of continuous cash debt/savings jubilee, resetting small-time debtors and savers to living hand-to-mouth as it erases their cash history. But it can accelerate the gap between the worst debtors and the biggest investors who are on opposite sides of the spiral...
- helij 3y ago
  What are some examples of inflation-resistant investments that are not real estate? Should a person just put anything extra into mortgage even though interest rates in savings accounts are higher than mortgage interest? Stock market at the moment is something I don't understand and I don't want to get burned again with Bonds. Just spend like there's no tomorrow?

saltcured 3y ago

For those with some savings, you also need to understand how to get into inflation-resistant investments if you want to not be pinched by savings. Otherwise this spiral of increasing wages makes your prior savings irrelevant. On the other hand, those with some debt need the financial wisdom to use their spiraling wages to pay down debt principal and not let the debt spiral due to increasing interest rates. So, high inflation can be a kind of continuous cash debt/savings jubilee, resetting small-time debtors and savers to living hand-to-mouth as it erases their cash history. But it can accelerate the gap between the worst debtors and the biggest investors who are on opposite sides of the spiral...

helij 3y ago
What are some examples of inflation-resistant investments that are not real estate? Should a person just put anything extra into mortgage even though interest rates in savings accounts are higher than mortgage interest? Stock market at the moment is something I don't understand and I don't want to get burned again with Bonds. Just spend like there's no tomorrow?