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"if your wages go up with inflation, and you store money in stocks/bonds that keep up with inflation" This depends on at least four premises: a) that your wag

"if your wages go up with inflation, and you store money in stocks/bonds that keep up with inflation" This depends on at least four premises: a) that your wages at least track with inflation b) that your expenses (not debt) track less than inflation c) that you can buy into stocks/bonds before the inflation AND they track at least with inflation If any of those are untrue, your conclusion falls apart. If all three are untrue, your expenses are growing faster than your wages and the little you have left over is now buying already-inflated assets.. which we've seen play out once in recent times.

_yb2s 2y ago
Why would expenses need to track less than inflation, if your wages are tracking with it? Expenses, by definition, track with inflation. With (c) stock prices are generally tied to the underlying value of a company which is protection from losing value due to inflation except in rare cases where the inflation directly harms the business model. Assuming the inflation continues to increase over time, you just buy the stocks as soon as you get the money, there is no need to do it "before the inflation" or any sense in which stocks can be "already inflated."
- nly 2y ago
  There's such a thing as a personal inflation rate. CPIH in the UK for example includes the cost of housing but the weighting of housing is effectively an average of a teenager, a mid life family and a pensioner. It comes out at like 20% weight which is well under what most people spend on housing.
- potato3732842 2y ago
  >Why would expenses need to track less than inflation, if your wages are tracking with it? Because wages don't go up in real time so you get robbed of the difference for the duration. You make $3. Rent costs $1. You have $2 leftover to improve your life, pay down debt, whatever. You make $3. Rent is now $1.50. You have $.50 leftover Your wage goes up to $3.50. Rent is now $2. You have $.50 leftover. Repeat a bunch of times. Your wage goes up $.50 again. Rent stops rising in price. You have $1 leftover. See how the inflation robs you of $.50 multiplied by the duration?
  - chgs 2y ago
    You make $3, rent costs $1, you owe $300, it takes 150 to repay your debt Inflation doubles everything You make $6, rent costs $2, you owe $300, it takes 75 to repay debt The person so wealthy they lent you money loses out, you gain.
    - caseysoftware 2y ago
      If that's universally true, why would lenders lend in a high inflationary environment?
      - _yb2s 2y ago
        The interest is usually still more than inflation, they just make less money- and the alternatives for them are either cash, which loses more, or investments that are higher risk and more volatile.
      - chgs 2y ago
        Because they lose more if they just stick it in a box under the bed.
  - _yb2s 2y ago
    If you get an annual cost of living adjustment, presumably it is ahead of cost half the year and behind the other half which averages out. Rent usually updates annually also. If all other debt payments are effectively decreasing, you’re just doing better. It only feels psychologically worse when you notice food prices going up steadily and you have slightly less left over than you did last month. People will still be mad about that even if actually ahead.

_yb2s 2y ago

Why would expenses need to track less than inflation, if your wages are tracking with it? Expenses, by definition, track with inflation. With (c) stock prices are generally tied to the underlying value of a company which is protection from losing value due to inflation except in rare cases where the inflation directly harms the business model. Assuming the inflation continues to increase over time, you just buy the stocks as soon as you get the money, there is no need to do it "before the inflation" or any sense in which stocks can be "already inflated."

nly 2y ago
There's such a thing as a personal inflation rate. CPIH in the UK for example includes the cost of housing but the weighting of housing is effectively an average of a teenager, a mid life family and a pensioner. It comes out at like 20% weight which is well under what most people spend on housing.
potato3732842 2y ago
>Why would expenses need to track less than inflation, if your wages are tracking with it? Because wages don't go up in real time so you get robbed of the difference for the duration. You make $3. Rent costs $1. You have $2 leftover to improve your life, pay down debt, whatever. You make $3. Rent is now $1.50. You have $.50 leftover Your wage goes up to $3.50. Rent is now $2. You have $.50 leftover. Repeat a bunch of times. Your wage goes up $.50 again. Rent stops rising in price. You have $1 leftover. See how the inflation robs you of $.50 multiplied by the duration?
- chgs 2y ago
  You make $3, rent costs $1, you owe $300, it takes 150 to repay your debt Inflation doubles everything You make $6, rent costs $2, you owe $300, it takes 75 to repay debt The person so wealthy they lent you money loses out, you gain.
  - caseysoftware 2y ago
    If that's universally true, why would lenders lend in a high inflationary environment?
    - _yb2s 2y ago
      The interest is usually still more than inflation, they just make less money- and the alternatives for them are either cash, which loses more, or investments that are higher risk and more volatile.
    - chgs 2y ago
      Because they lose more if they just stick it in a box under the bed.
- _yb2s 2y ago
  If you get an annual cost of living adjustment, presumably it is ahead of cost half the year and behind the other half which averages out. Rent usually updates annually also. If all other debt payments are effectively decreasing, you’re just doing better. It only feels psychologically worse when you notice food prices going up steadily and you have slightly less left over than you did last month. People will still be mad about that even if actually ahead.