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GEORGE ANTONE

CONSIDERATION 5: INFLATION Inflation? What does inflation have to do with this? Besides, inflation is low. How does it affect me? I am debt-free, own my assets free-and-clear, and my returns are good. I am being told I shouldn’t worry about it – by those experts on TV. Think again…It turns out to be the biggest threat: the loss of purchasing power. According to FOOL.COM, a well-respected website for stock news and analysis, “Put simply, inflation slowly but surely saps the value of your hard-earned money. Even at a relatively low 3% inflation rate, prices double roughly every 25 years. Moreover, depending on your individual needs, your personal inflation rate might be much higher than the official Consumer Price Index. For instance, many retirees have argued that the CPI doesn’t reflect their particular spending patterns, making it necessary to determine their own price-increase exposure and make arrangements accordingly. The steady erosion of purchasing power is the biggest reason why investing too conservatively can be problematic. If you keep money in a savings account right now, you guarantee that your account balance will never go down. But earning just a fraction of a percent in interest, you’ll never keep up with even the low inflation rate that we’ve enjoyed lately.” So what is inflation rate? You just might want to take a look at ShadowStats.com. You might want to be seated when you do that. According to ShadowStats.com, inflation is closer to 10% than the 3% that the government states. That’s because the CPI (index that measures inflation) was updated in the Carter and Clinton years, and energy (gas) and food were removed from the CPI, which in turn lowered inflation rate. In plain English, they removed the food and gas we need to survive on from the calculation for inflation! Huh? Yep, it’s true. However, ShadowStats.com keeps track of inflation with the old calculation. So if inflation is indeed closer to 10%, and inflation compounds. What does that mean to me? Simple. My investment of $10,000 has to return 10% after taxes and after fees, every single year, just to maintain purchasing power, and the investment has to be growing in a compounding manner! Where can I find this? Not sure. Real estate? No, I was told by the experts on TV that having a mortgage is bad. The stock market? According to the Dalbar Study, the average investor has a return of just over 3% in the last 25 years. Dalbar Inc. is the nation’s leading financial services market research firm and performs a

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Why most people will never become wealthy report  
Why most people will never become wealthy report  
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