Inflation is Knocking

I had a great discussion with my daughters about the increasing cost of everything when talking about the monthly bills. The stark financial reality of price increases become more apparent as you move out, but it is even more of an issue in retirement.

Inflation is just a nuisance when you are working because the solution is easy ... just work longer hours, or get a second job. When your are retired, inflation effects on your income is critical when you are on a fixed income.

Staying ahead of inflation is a losing battle over a life time. As with taxes, inflation has a way of catching up with you.

I got my hands on an issue of Reminisce Magazine the other day and it had a list of the prices of many staples from 1937. Check these prices out

Annual Income $1,259
Man's Dress Shirt $1.39
Nurse's Uniform $1.00
Large Eggs $.45
Ground Beef (2 Pounds) $.29
Linoleum (Square Yard) $.22
Gasoline (US gallon) $.20
Bacon (a pound) $.18
Lemons (a dozen) $.11
Potatoes (3 pounds) $.10
Toilet Paper (two rolls) $.06
First Class Stamp $.03
Daily Newspaper $.02

To see the latest inflation numbers for 2010 from check Statistic Canada here.

The power of compounding in action ... inflation. The hidden risk to investors and retirees everywhere.

Financial Blog of Unknown | Life Insurance Debt Investing Mutual Funds |

2 Response to "Inflation is Knocking"

fred sarkari Says....

September 13, 2010 at 1:16 PM

Mike, that is an eye opener. If we only focused more on the long term pertaining to our investments we would retire a lot earlier. :)

Thanks

Unknown Says....

September 13, 2010 at 2:43 PM

Isn't that the truth Fred. Did you check out annual income? Just over 100 dollars a month or about 60 cents an hour.

Can you imagine how todays incomes will look so small when you look back in 40 to 50 years.

(Assuming we are still around)

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