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Protect Your Future Purchasing Power NOW!!! What might it cost you to provide yourself and your family with everyday basic necessities like food & clothing in the near future?
A
lthough it is a very familiar word, “inflation” is one of the least understood economic terms. By definition, inflation is “a rise in the general level of prices of goods and services in an economy over a period of time.”
That can be good and bad. It’s good if you have a fixed-rate loan or mortgage, or are in the business of selling gasoline, or precious metals. It’s usually good if you own real estate. It’s bad if you own bonds with fixed interest or are retired and living on a fixed income with no new paycheck to count on. The government tells us that inflation has averaged 2.6% since 1990, so most Americans haven’t really worried about how it would impact their future cash flow needs. What many people don’t realize is that in 1990 our government changed the way it “calculates” inflation. It removed two major costs -fuel and food. If you used the old, more realistic formula, inflation for the last two decades would average closer to 6.5%. The American Institute for Economic Research says it’s actually closer to 8%!
What does that really mean to you? At an estimated 8% inflation rate, $100,000 cash will only be worth $46,319 in 10 years, and only $21,455 in 20 years. In other words, inflation would cut your wealth in cash by about half every 8-10 years. Even though it appears that inflation may not be rearing its ugly head in the short term, it is certainly prudent to plan for rising costs to our basic living expenses in the near future. Not planning for this could wreak havoc on your retirement income needs and lifestyle. The “Wall Street” way suggests owning inflation-sensitive assets like certain “blue-Chip” stocks, safe companies that can raise their prices on their products because they sell items that we need, no matter what the cost. We also hear about the benefits of owning tangible “hard assets” like precious metals and coins. While these types of inflation hedges may help, they may not be enough to make a real difference.
becomes available for saving first, and for living a better quality of life. Consider relocating to a less expensive area or part of the country Someplace where living expenses, property taxes, car insurance are less expensive. If you are still working, consider moving closer to your job. Maybe you can get by on one car? We have lots of strategies and suggestions to help you. Where there’s a will, there’s a way, for sure.
Start the NEW YEAR off on the right foot. Pull out that bank ledger and credit card statements right now. Identify ways you can cut back, and just do it! Identify ways that you might earn extra income. There are countless possibilities. Your future starts today!
Call us at Family Focus Financial Group. 732-364-5462 All initial discovery consultations are complimentary. www.fffgonline.com *Kathleen A. Nolan is an Investment Advisor Representative. Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor. Neither Kathleen A. Nolan nor Global Financial Private Capital gives tax or legal advice. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by Global Financial Private Capital.
So what’s the answer? You may not like it, but here goes. SPEND LESS, SAVE MORE! Americans save a meager average 5.8% of their income which means we spend 95.4%!
But how can we cut back? Think about moving into a smaller house. Not everyone can do this, but smaller homes mean fewer expenses. It doesn’t necessarily mean lesser lifestylequite the contrary. Perhaps more money
Call your friends at Family Focus Financial Group at WE SUPPORT CASA of Ocean County. See how you can help a child in need of your support. www.FFFGonline.com
The County Woman Magazine
732-276-1429
Kathy Nolan Investment Advisor Representative President/Founder
Our philosophy at FFFG is to provide intelligent solutions for you, our clients, so that you have confidence and security in knowing that your www.TheCountyWoman.com strategies are consistent with your objectives and values.
or visit them at 2042 West County Line Road, Jackson NJ 08527
January/February 2014