You've Been Thinking About Inflation All Wrong (2022)

Re:You've Been Thinking About Inflation All Wrong (2022) by Wowfunhappy on Thursday March 21, 2024 @10:04AM (#39778648)

A lot of people are commenting on the fact that in a high inflation environment, your savings will themselves be worth less. However, the author is assuming that people will invest their savings, and that those investments will naturally keep pace with inflation.

> By owning income-producing assets such as stocks, farmland, and real estate, your wealth should keep pace with inflation (to some degree) over the long-run.

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Now, I'm not sure if this works. Let's say your investment is going to grow by 10% over five years. If inflation over the same timespan is 5%, you will end up with less spending power than if it was 2%.

However, it probably doesn't make sense to keep those growth numbers constant. Do investments tend to grow more in a high-inflation environment versus a low-inflation one? This is where I don't know enough about economics.

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Re:You've Been Thinking About Inflation All Wrong (2022) by rtkwe on Thursday March 21, 2024 @12:15PM (#39780557)

That is wildly out of touch with the majority of Americans who have no meaningful savings much less appreciating assets like stock or property. Even then you have to save half your income for that to work and you have to ignore that you'll have to spend that appreciation down so you're not taking advantage of compounding growth. It's wrong on so many levels.

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Re:You've Been Thinking About Inflation All Wrong (2022) by Wowfunhappy on Thursday March 21, 2024 @12:38PM (#39780912)

I read the article as making personal-finance advice, I don't think he meant it as a policy recommendation.

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