Concerns About Inflation?

[corn18]

Did you notice cedar prices? The home store folks told me a month ago that pressure treated was falling but they expected cedar prices to remain high.

Cedar is still sky high. A 1x6x10 board is $20. Would cost us $3k to do our closet. So we are waiting.

 

[Sunset]

I ordered all my TP from Sam's Club online last year. Charged the same as in store price and reasonable shipping. I noticed last month that they now charge more for online TP then in store TP and then add a shipping fee which is higher then it used to be. All in all that raised the price of the TP by about 15%.

I upgraded my Sam's membership when I had 1 month left on it. Cost $8.
They gave me a $10 gift card for upgrading

I just ordered 2 packages of TP, with free delivery, a big benefit of the upgrade.

 

[ivinsfan]

I upgraded my Sam's membership when I had 1 month left on it. Cost $8.
They gave me a $10 gift card for upgrading

I just ordered 2 packages of TP, with free delivery, a big benefit of the upgrade.

Yes but you did pay more for the TP with the online price...that bugs me that Sam's does that..

 

[Lewis Clark]

... Otherwise the megacorps purposely make it impossible to price compare with all the double roll and mega roll nonsense words in the descriptions. ...

Yes! While I commiserate with all those folks who disliked differential equations in that other thread on college courses, some of the hardest math in the world is toilet paper math.

 

[Chuckanut]

Yes! While I commiserate with all those folks who disliked differential equations in that other thread on college courses, some of the hardest math in the world is toilet paper math.

It reminds me of trying to compare cell phone plans 10 years ago. Ugly.

 

[daylatedollarshort]

Corporations do the same with mattresses, and purposely make it impossible to price shop between stores because the stores all have unique model names. We received a bed frame that doesn't need a box spring for free for reviewing products, so that cut our mattress costs in half, and then bought a mattress online based on reviews. It shipped for free and came in a box to our doorstep. I read to buy an extra firm mattress, and then if it is too hard you can always buy a soft topper. But the extra firm seems fine as is. The new ship to the door mattress companies with money back guarantees are disrupting the old over priced, can't compare mattresses, brick and mortar store business models.

Eye glasses seem to be the same way. I just got my first Zenni pairs this year and I really like them.

 

[brett]

The only protection we have is to ensure that our after tax investment income is a point or two higher than the rate of inflation.

As retirees we believe that our personal inflation rate is higher than the average rate of inflation.

 

[kcowan]

I ordered all my TP from Sam's Club online last year. Charged the same as in store price and reasonable shipping. I noticed last month that they now charge more for online TP then in store TP and then add a shipping fee which is higher then it used to be. All in all that raised the price of the TP by about 15%.

So I finally understand why there was a run on TP. An essential for sure to go up in price!

As retirees we believe that our personal inflation rate is higher than the average rate of inflation.

Yes I finally gave up arguing about CPI and just use 4% for our personal rate in our plan. And have reduced investment returns from 7% to 6% after being low for many years.

 

[corn18]

I'm using 2% real on my 60/40 portfolio. Seems conservative for a 30 year retirement as shown in the graph below. Inflation isn't really a factor other than the real rate of return. Higher inflation helps me because I have a mortgage, COLA pension, free health care and SS. It hurts me if the market doesn't keep up.

 

[Surewhitey]

Sherwin Williams just sent me an email saying they're adding a 4% surcharge for labor & shipping costs for their products...

 

[Koolau]

My modest pension is NOT COLA'd and we live in a state which receives roughly 90% of everything via container ship. Thus, everything goes up when ever oil is up. Of course, it never goes back down when oil drops. SO, I have taken a step to lower our personal "CPI." I just purchased 500 Forever Stamps the day before the price went up 3 cents! I figure that's nearly a 6% return on our money. SO, I figure we're golden. Our "plan" only has to last 25 more years, not 30 (takes us to 100!) YMMV

 

[daylatedollarshort]

My modest pension is NOT COLA'd and we live in a state which receives roughly 90% of everything via container ship. Thus, everything goes up when ever oil is up. Of course, it never goes back down when oil drops. SO, I have taken a step to lower our personal "CPI." I just purchased 500 Forever Stamps the day before the price went up 3 cents! I figure that's nearly a 6% return on our money. SO, I figure we're golden. Our "plan" only has to last 25 more years, not 30 (takes us to 100!) YMMV

I'm stocking up on what I can also. I'm in a free products for reviews program, so when household supply items that have a long shelf life are available, like lint rollers, towels, honey, packing tape, rechargeable batteries and ear plugs, I've been stocking up. I think at our ages 12 rolls of packing tape should be a life time supply.

 

[tmm99]

I'm in a free products for reviews program...

How do you sign up for something like that?

 

[daylatedollarshort]

How do you sign up for something like that?

It is an invitation only program, with invitees selected from people who wrote free product reviews that were found helpful by other shoppers. I just lucked out on that program.

 

[tmm99]

It is an invitation only program, with invitees selected from people who wrote free product reviews that were found helpful by other shoppers. I just lucked out on that program.

Hey good for you! It's great you got picked!

 

[brett]

So I finally understand why there was a run on TP. An essential for sure to go up in price!
Yes I finally gave up arguing about CPI and just use 4% for our personal rate in our plan. And have reduced investment returns from 7% to 6% after being low for many years.

I did the same. I estimated 3 percent inflation 10 years ago, and real returns of 3 percent.

Inflation was a little less, real returns considerably higher.

Who knows what the next ten years will be? No doubt higher to start with. As long as our real returns are a little higher than inflation we are fine. Enough to make up for my non indexed DB.

Not about to start worrying about inflation. We just have to work with the levers that we have under our control.

 

[Chuckanut]

I just purchased 500 Forever Stamps the day before the price went up 3 cents! I figure that's nearly a 6% return on our money.

You better hope Christmas cards don't come back into style.

 

[Koolau]

I just purchased 500 Forever Stamps the day before the price went up 3 cents! I figure that's nearly a 6% return on our money.[ /QUOTE]

You better hope Christmas cards don't come back into style.

Heh, heh, at our house, they never went OUT of style. We probably send 150 or more every Christmas. 500 stamps will probably last us about a year. DW sends cards to EVERYBODY for EVERYTHING. By the time DW uses them up, we'll probably have another USPS increase. FULL DISCLOSURE: Living in Hawaii, even 58 cents seems like a bargain for a First Class letter. Many of DW's cards travel 5000 miles to the recipient. YMMV

 

[GenXguy]

I did the same. I estimated 3 percent inflation 10 years ago, and real returns of 3 percent.

Inflation was a little less, real returns considerably higher.

Who knows what the next ten years will be? No doubt higher to start with. As long as our real returns are a little higher than inflation we are fine. Enough to make up for my non indexed DB.

Not about to start worrying about inflation. We just have to work with the levers that we have under our control.

It's looking more and more like inflation is going to continue to be very high - and it ends up amounting to more than the government figures as well, which makes it even worse.

I'm seeing more people are concerned about a higher chance of long term very high inflation. Just a couple quick references:

https://www.cnbc.com/2021/09/03/nia...peat-the-1960s-when-the-fed-lost-control.html

https://www.cnbc.com/2021/08/27/pow...etting-pushback-at-the-fed-and-elsewhere.html

In the meantime, expect a massive drop in your investments in this overpriced market. Time to buckle up for a rough ride.

 

[mrfeh]

It's looking more and more like inflation is going to continue to be very high - and it ends up amounting to more than the government figures as well, which makes it even worse.

I'm seeing more people are concerned about a higher chance of long term very high inflation. Just a couple quick references:

https://www.cnbc.com/2021/09/03/nia...peat-the-1960s-when-the-fed-lost-control.html

https://www.cnbc.com/2021/08/27/pow...etting-pushback-at-the-fed-and-elsewhere.html

In the meantime, expect a massive drop in your investments in this overpriced market. Time to buckle up for a rough ride.

I consider such articles as nothing more than click bait. They could be wrong or right...I don't know. But stuff found on cnbc/marketwatch/whatever should not guide one's investments.

Rick Ferri (google him if you don't know who he is) has suggested 20% of a retiree's fixed income holdings should be TIPS. Others say just hold total bond funds and let equities take care of inflation.

Personally, as mentioned earlier in this thread, I think demographics will be the primary driver of inflation long term.

 

[corn18]

If the 10 year yield goes up to 1.6%, the market panic sells. If inflation hits 5%, we get new closing highs. The $120B / mo that the Fed is buying might be depressing 10 year yields and propping up the stock market. As long as the Fed is buying and the Treasury is printing, all is good, right?

This is not going to end well.

 

[Sunset]

.... I just purchased 500 Forever Stamps the day before the price went up 3 cents! I figure that's nearly a 6% return on our money. ....

I did that years ago, and it's been quite the tax free gain on my money considering the price increases each year for stamps.

Catch is we don't mail much, so we have about 10 yrs worth and maybe the glue will dry out

 

[daylatedollarshort]

I did that years ago, and it's been quite the tax free gain on my money considering the price increases each year for stamps.

Catch is we don't mail much, so we have about 10 yrs worth and maybe the glue will dry out

We don't mail much either. I have a bag of stamps with some from more than 20 years ago. I asked at the post office if they were still good and they said stamps never expire. You can just glue them to the envelope if the glue on the stamp dries out.

 

[Montecfo]

I did the same. I estimated 3 percent inflation 10 years ago, and real returns of 3 percent.

Inflation was a little less, real returns considerably higher.

Who knows what the next ten years will be? No doubt higher to start with. As long as our real returns are a little higher than inflation we are fine. Enough to make up for my non indexed DB.

Not about to start worrying about inflation. We just have to work with the levers that we have under our control.

OCD:

As long as nominal returns are higher than inflation

or

As long as real real returns are positive.

I know that's what you meant.

I think today's week jobs report may give the FED pause on beginning tapering this year, but we will see.

 

[Montecfo]

If the 10 year yield goes up to 1.6%, the market panic sells. If inflation hits 5%, we get new closing highs. The $120B / mo that the Fed is buying might be depressing 10 year yields and propping up the stock market. As long as the Fed is buying and the Treasury is printing, all is good, right?

This is not going to end well.

I think the fiscal side is the real problem right now.

I think the Fed is doing the right thing. US Treasury yields still very attractive to the international buyer especially, compared to yields from other sovereigns.

We need to get the economy back to work, there is a ways to go yet.