audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
But I hadn't quite reached my rebalance trigger yet! Waaaa!Hey, I *TOLD* you to sell, didn't I?
Now I have to wait longer. Oh well!
Audrey
But I hadn't quite reached my rebalance trigger yet! Waaaa!Hey, I *TOLD* you to sell, didn't I?
So let's get this thread back on track -
Wh - oh, hang on, only one person here is allowed to say that word. She has the sole license to utter it
I hope W2R is getting royalities from GEICO for the use of the term.
clifp said:Better yet we really need a video of W2R on a zipline.
Not to rain on your parade but it's probably a good idea to look at whether your "real" net worth is keeping up after expenses. Then it would truly be sustainable forever.Our net worth is higher than it was five years ago, despite withdrawing all our living expenses, and not putting any money in. At this rate we can live forever.
Not to rain on your parade but it's probably a good idea to look at whether your "real" net worth is keeping up after expenses. Then it would truly be sustainable forever.
Here is a cumulative inflation calculator to compare with your net worth growth over the same time period InflationData.com's Cumulative Inflation Calculator
Otherwise - just ignore it! Party on!
Audrey
but some people keep say'in there has been no inflation, perhaps even deflation!
Braumeister, I don't want to hijack this thread, but noted you are from near Cincy and you apparently like beer. Have you heard about the new Moerlein lagerhouse downtown Cincy? I live 90 minutes from there, and plan to go in 2 weeks.If it's not quite time to sell, I think it's at least time to start taking a few profits.
Braumeister, I don't want to hijack this thread, but noted you are from near Cincy and you apparently like beer. Have you heard about the new Moerlein lagerhouse downtown Cincy? I live 90 minutes from there, and plan to go in 2 weeks.
Wh... Wh.... Wh(eee!)... Party like it's 1929
W2R, you jinxed us with your excitement.
Yes. I had the same experience. My net worth Dec 2011 compared to Dec 1999 is -10% when adjusted for inflation. But then again that was compared to a market peak and after a down year. Other years I have been well ahead.Inflation of 12% from Jan 2007 to Jan 2012! Wow!
Take that out from my portfolio gain, and my own return is not all that great! I dunno about y'all, but some people keep say'in there has been no inflation, perhaps even deflation!
Yeah, just wait until inflation is so high that everybody agrees that there IS.
Yes. I had the same experience. My net worth Dec 2011 compared to Dec 1999 is -10% when adjusted for inflation. But then again that was compared to a market peak and after a down year. Other years I have been well ahead.
And realize that even "ideal" inflation like 2% or 2.5% adds up over time. These are not considered high rates, yet 2% means 22% loss in spending power over a decade, and 2.5% means 28% loss. Over a decade, things add up!
I think when people say "no inflation", they really mean inflation close to 2% per year on average. Rates below 2% are usually associated with struggling or awful economic periods. I don't think we want to go there! But even at a nice "friendly" 2% annual inflation rate, over a decade your investments better grow 22% to stay even in real terms.
We did recently have a negative inflation year in 2010 I think?
Latest inflation rate Jan 2011 to Jan 2012 came in at 2.93%. Yeah, not that low considering we averaged 2.56% from 2000-2009.
Audrey
Last year's (2011) official inflation rate was 3.5%, hardly the "no inflation" some people refer to.
Yeah, yeah. I know!Gov't definition of inflation vs real household inflation are two different animals. Given the real effect, its a wonder anyone can live within a budget/SWR that very well may be predicated on gov't inflation #s and likely to become more of an issue over the next 10 year period.
Yeah, yeah. I know!
Fortunately for us our "personal household inflation" during retirement from 2000 to 2011 turned out to be 0.21% per year. Yep - you read that right - less than a 1/4 % per year. After 12 years, our spending on regular expenses only increased by 2.33% compared to where we started. And we weren't trying to stick to a budget either.
Audrey
It's that "same goods and services" thing that is the issue here. Sure, it's possible to have very little inflation if you "substitute" the way the CPI does (steak becomes too expensive, so we substitute with chicken and call it a drop in food prices).My tracking stinks, but if you were able to acquire the same goods and services every year as you did in 2000 and only realized .21% inflation year over year above that base expenditure level thats amazing. Good job!
It's that "same goods and services" thing that is the issue here. Sure, it's possible to have very little inflation if you "substitute" the way the CPI does (steak becomes too expensive, so we substitute with chicken and call it a drop in food prices).
It could be that we really splurged during 2000 when we started! But actually, our peak spending year was in 2002, and the next highest year was 2011 - which I expected because we moved into a slightly more expensive situation.My tracking stinks, but if you were able to acquire the same goods and services every year as you did in 2000 and only realized .21% inflation year over year above that base expenditure level thats amazing. Good job!
Fortunately for us our "personal household inflation" during retirement from 2000 to 2011 turned out to be 0.21% per year. Yep - you read that right - less than a 1/4 % per year. After 12 years, our spending on regular expenses only increased by 2.33% compared to where we started. And we weren't trying to stick to a budget either...
Since I was comparing whole year 2000 spending to other years, I calculated the 11 year range Dec 2000 to Dec 2011: 29.7% Virtually the same .Cumulative inflation from Jan 2000 to Jan 2011 is 30.5%!
So, after inflation, your spending dropped quite a bit in 11 years. Can we say "Bernicke's spending model"?
Actually, you have an "advanced" case of Bernicke affliction, perhaps because you retired quite early. And by the way, Bernicke's model calls for a 3.7%/yr drop, starting at the age of 55, while other researchers have argued that 2.2%/yr is closer to the norm. You are somewhere in the middle.