Did you feel that?  You’ve just been robbed! 

Wait—and now you’re being robbed again.  And…againIn fact, we are all being robbed 24 hours a day by something so silent, cunning, and ordinary, it eludes even the smartest people. 

Why are we, for the most part, completely unaware of this everyday thief?  Like an untraceable amount of arsenic meant to slowly poison an unsuspecting victim, day after day, this “silent killer” slips by unnoticed, slowly eroding our buying power, with no apparent signs of trouble, until it’s too late.

Ok, maybe I’m being a little dramatic, but this is a dry subject so it needs a little spice.  I’m talking about… inflation.  Hovering at around 3% since 1925, inflation is robbing most of us every minute of every day, unless every dollar we save is earning at least 3% interest or more.  When you talk about inflation, most people will shrug their shoulders and say, “Well, it doesn’t make that much of a difference.”  But think about it.  Any time your money is not earning a return of 3% or more, you are losing buying power daily!  In a way, your money, really your buying power, is literally disappearing before your eyes.  (We’ll look at some numbers below.)

Ironically, many people leave their money in a savings account because they are afraid of losing it!  They think their money will be safe there, and of course it is, but they are actually losing small amounts of buying power every single day with this type of “non-investment.” 

“But Greg,” you might argue, “I checked my account balance and it still says I have $100,000 after a year’s worth of time.  I haven’t lost any of it.”  True, but account balance and buying power are two very different things.

If you wanted to live on $100,000 a year (in today’s dollars) when you retire, twenty years after you receive your retirement cake, you would need $180,000 to equal the same buying power you had when you first retired.  It might sound shocking, but math doesn’t lie.  Thirty years after retirement, your $100,000 “salary” would have to increase to $240,000.  You had better be making at least a 3% return on your money to achieve that!

Let me put it into perspective in the opposite direction.  That $100,000 you have in your savings account making virtually no interest will only have the buying power of—are you ready?— $40,000 after 30 years.  Yuck.

I always want to give you your value when reading these articles, so here’s something for you, and it’s about hamburgers. 

My wife, Tanja, and I have been to a restaurant in town a few times that originated in Lake Tahoe.  It’s called “Lucky Beaver.”  (Couldn’t they come up with a better name?)  Anyway, we heard they made some of the best hamburgers around, so we had to try them.  The verdict was that the burgers were pretty tasty.  However, the owners must have been planning for inflation (you knew there had to be a reason behind this food story!) because the burgers cost $15 to $19 on average.  Heck, if I had been really hungry, I could have ordered a double burger for $23.  That’s right, $23 for a burger.  And this place isn’t even a trendy Midtown hipster joint.  Maybe they should call this place “Inflation Burgers.”  It wouldn’t be any worse than “Lucky Beaver,” and it’d be more accurate.

Inflation is here to stay.  Don’t let the silent killer sneak up on you, gobbling up your purchasing power later in life.  Invest smart and invest safe, and make sure you are making a decent enough return to be able to buy a double inflation burger in thirty years if you want one.  It should only set you back about 55 bucks by then.

Did you feel that?  You’ve just been robbed! 

Wait—and now you’re being robbed again.  And…againIn fact, we are all being robbed 24 hours a day by something so silent, cunning, and ordinary, it eludes even the smartest people. 

Why are we, for the most part, completely unaware of this everyday thief?  Like an untraceable amount of arsenic meant to slowly poison an unsuspecting victim, day after day, this “silent killer” slips by unnoticed, slowly eroding our buying power, with no apparent signs of trouble, until it’s too late.

Ok, maybe I’m being a little dramatic, but this is a dry subject so it needs a little spice.  I’m talking about… inflation.  Hovering at around 3% since 1925, inflation is robbing most of us every minute of every day, unless every dollar we save is earning at least 3% interest or more.  When you talk about inflation, most people will shrug their shoulders and say, “Well, it doesn’t make that much of a difference.”  But think about it.  Any time your money is not earning a return of 3% or more, you are losing buying power daily!  In a way, your money, really your buying power, is literally disappearing before your eyes.  (We’ll look at some numbers below.)

Ironically, many people leave their money in a savings account because they are afraid of losing it!  They think their money will be safe there, and of course it is, but they are actually losing small amounts of buying power every single day with this type of “non-investment.” 

“But Greg,” you might argue, “I checked my account balance and it still says I have $100,000 after a year’s worth of time.  I haven’t lost any of it.”  True, but account balance and buying power are two very different things.

If you wanted to live on $100,000 a year (in today’s dollars) when you retire, twenty years after you receive your retirement cake, you would need $180,000 to equal the same buying power you had when you first retired.  It might sound shocking, but math doesn’t lie.  Thirty years after retirement, your $100,000 “salary” would have to increase to $240,000.  You had better be making at least a 3% return on your money to achieve that!

Let me put it into perspective in the opposite direction.  That $100,000 you have in your savings account making virtually no interest will only have the buying power of—are you ready?— $40,000 after 30 years.  Yuck.

I always want to give you your value when reading these articles, so here’s something for you, and it’s about hamburgers. 

My wife, Tanja, and I have been to a restaurant in town a few times that originated in Lake Tahoe.  It’s called “Lucky Beaver.”  (Couldn’t they come up with a better name?)  Anyway, we heard they made some of the best hamburgers around, so we had to try them.  The verdict was that the burgers were pretty tasty.  However, the owners must have been planning for inflation (you knew there had to be a reason behind this food story!) because the burgers cost $15 to $19 on average.  Heck, if I had been really hungry, I could have ordered a double burger for $23.  That’s right, $23 for a burger.  And this place isn’t even a trendy Midtown hipster joint.  Maybe they should call this place “Inflation Burgers.”  It wouldn’t be any worse than “Lucky Beaver,” and it’d be more accurate.

Inflation is here to stay.  Don’t let the silent killer sneak up on you, gobbling up your purchasing power later in life.  Invest smart and invest safe, and make sure you are making a decent enough return to be able to buy a double inflation burger in thirty years if you want one.  It should only set you back about 55 bucks by then.