|
|
Anyone here concerned about inflation?
02-19-2018, 07:14 AM
|
#1
|
Confused about dryer sheets
Join Date: Feb 2018
Posts: 4
|
Anyone here concerned about inflation?
It's all the rage in the news these days. To be clear, I don't think we're going into an inflationary supernova (thanks to new government spending plans and tax cuts), but I'm wondering what others on the board think of this issue.
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
02-19-2018, 07:25 AM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Nov 2015
Posts: 2,690
|
Sure I'm concerned, but not in the current environment.
|
|
|
02-19-2018, 09:29 AM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
|
I assume we will have inflation, and that's why we keep some money in equities as a hedge. Since I have no control over it I see no purpose in worrying about it though.
I've always said that owning a home is a great hedge against inflation since nobody can raise your rent, which is typically your largest budget item. And in California property tax increases are capped at 2%, so no real worries there. If the price of gas goes up, it's not going to break my budget.
|
|
|
02-19-2018, 09:39 AM
|
#4
|
Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
|
Quote:
Originally Posted by Ready
I assume we will have inflation, and that's why we keep some money in equities as a hedge. Since I have no control over it I see no purpose in worrying about it though.
I've always said that owning a home is a great hedge against inflation since nobody can raise your rent, which is typically your largest budget item. And in California property tax increases are capped at 2%, so no real worries there. If the price of gas goes up, it's not going to break my budget.
|
As an aside, property taxes in California are not capped at two percent per year. Politicians have learned that the voters will support all kinds of parcel taxes and special assessments if they are for schools, parks, libraries, or wetlands protection. And people will provide the necessary two thirds majority to pass new bonds if the story is good. The base tax rate is one percent of assessed value. Existing bonded indebtedness raised that to maybe 1.1 percent in my area when I bought my house. Instead of paying a decreasing percentage as bonds were paid off, the parcel taxes and the bond issues approved by more than two thirds majorities have driven my taxes up to over 1.8 percent of the assessed value. The assessed value still goes up two percent per year. Howard Jarvis is spinning in his grave.
|
|
|
02-19-2018, 09:47 AM
|
#5
|
Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
|
I was only referring to tax increases, not base tax rates, which vary by locality.
|
|
|
02-19-2018, 09:48 AM
|
#6
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
|
We hold a bunch of TIPS as a hedge against 70s/80s kind of inflation. Low probability, high impact type event.
|
|
|
02-19-2018, 12:26 PM
|
#7
|
Confused about dryer sheets
Join Date: Feb 2018
Posts: 4
|
Quote:
Originally Posted by OldShooter
We hold a bunch of TIPS as a hedge against 70s/80s kind of inflation. Low probability, high impact type event.
|
Smart, that's a good way to sleep well at night. I should consider adding some to my portfolio as well.
|
|
|
02-19-2018, 12:30 PM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Jan 2013
Posts: 3,405
|
Quote:
Originally Posted by Ready
I was only referring to tax increases, not base tax rates, which vary by locality.
|
The assessed value can only go up by two percent compounded annually. The tax rate goes up every time a new general or parcel tax is voted in. My taxes have gone up a lot more than two percent every year.
|
|
|
02-19-2018, 12:46 PM
|
#9
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
|
Mine too. Of $2100 in property tax, I pay $150 in extras;
Mosquito control, hazardous waste, water quality, but mostly schools and the local community college.
I enjoy paying these taxes, they make life better here.
|
|
|
02-19-2018, 12:59 PM
|
#10
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
|
Quote:
Originally Posted by debshaw13
Smart, that's a good way to sleep well at night. I should consider adding some to my portfolio as well.
|
Yeah. One of life's little mysteries for me is why someone would segregate part of a portfolio to be "safe" fixed-income and then immediately charge off simultaneously in all directions seeking risk and volatility in junk, emerging markets, etc. It makes no sense. TIPS make sense to me; I pay only a very small "insurance premium" for the inflation protection compared to what treasury bonds or high-grade corporates might yield.
|
|
|
02-19-2018, 01:24 PM
|
#11
|
gone traveling
Join Date: Mar 2015
Posts: 3,508
|
Quote:
Originally Posted by debshaw13
It's all the rage in the news these days. To be clear, I don't think we're going into an inflationary supernova (thanks to new government spending plans and tax cuts), but I'm wondering what others on the board think of this issue.
|
I think inflation will be higher than it is today, particularly with recent moves by this administration which serve to further juice an already strong economy.
Hopefully, it won't get out of control. I don't think it will, and I'm not yet doing anything special in anticipation of that happening, but I am concerned.
Sometimes politicians focus on the short-term at the expense of the longer-term.
|
|
|
02-19-2018, 02:09 PM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,836
|
Not yet, but the day may come.
|
|
|
02-19-2018, 02:29 PM
|
#13
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Location: No fixed abode
Posts: 8,764
|
No, I used up all my worry about inflation over the last 10 years that it was supposed to happen.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Anonymous (not Will Rogers or Sam Clemens)
DW and I - FIREd at 50 (7/06), living off assets
|
|
|
02-19-2018, 02:39 PM
|
#14
|
Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
|
I'm not particularly worried about inflation. In the 21st century I think technology (and it's enabled wicked stepsister globalization) will keep a damper on it.
The only time the U.S. has had sustained inflation above 3-4% is during major wars - WW1, WW2, and late Cold War/Vietnam. In any case, FIRECalc and similar historical studies cover those periods and I'm >100% in FIRECalc, so good to go.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
|
|
|
02-19-2018, 03:05 PM
|
#15
|
gone traveling
Join Date: Mar 2015
Posts: 3,508
|
Quote:
Originally Posted by usgrant1962
the only time the u.s. Has had sustained inflation above 3-4% is during major wars - ww1, ww2, and late cold war/vietnam.
|
1973 - 1982.
|
|
|
02-19-2018, 03:10 PM
|
#16
|
Thinks s/he gets paid by the post
Join Date: Dec 2015
Location: Michigan
Posts: 4,939
|
Quote:
Sure I'm concerned, but not in the current environment.
|
+1
__________________
"The mountains are calling, and I must go." John Muir
|
|
|
02-19-2018, 03:12 PM
|
#17
|
Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
|
Quote:
Originally Posted by joeea
1973 - 1982.
|
Yes, that was late Cold War.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
|
|
|
02-19-2018, 03:48 PM
|
#18
|
Thinks s/he gets paid by the post
Join Date: Jan 2017
Posts: 2,628
|
Quote:
Originally Posted by joeea
1973 - 1982.
|
That's been in the back of my mind all along my path to ER. Sure, I have a plan, but it's more of "pull out all the stops" plan. Hoping I never have to use it!
|
|
|
02-19-2018, 04:06 PM
|
#19
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,669
|
It's a good thing the elected officials know their stuff, or I'd be worried...
|
|
|
02-19-2018, 04:18 PM
|
#20
|
Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,290
|
__________________
When I was a kid I wanted to be older. This is not what I expected.
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|