Friday, November 14, 2014 12:19:23 AM
More from my mother's notebook - inflation and financial independence:
As to financial independence, it doesn't seem to have changed all that much but think about how much it takes to be financially independent today. I'm sure that my mother was thinking for a couple, and probably in a paid off house, which theirs was. I'd guess about 50-60,000 in a major city - but not San Francisco where the average 2 bedroom apartment is over $3k/month - and a bit less in a smaller city. Taking the $15k and $60k that would be about 3.82%/year.
Fun, but a bit scary looking at the figures. I'm sure glad that I found the AIM book in my library. Given the inflation I see in the grocery store and buying decent but not extravagant shoes and my expected lifespan I'll really need to buckle down to making a bit of money to add to my SS and small pension.
For an idea of what my grocery inflation is I keep an eye on what used to be a cheap, tough, but tasty cut of meat, flank steak, that in 2006 cost $1.79/lb and now runs $6.49/lb. That is 17.46%/year, so now I only eat it on occasion where as I used to have it for breakfast often. Oh, well. I no longer have to worry about breaking my teeth on it.
Best,
Allen
If we assume she was figuring about 3/4 of a loaf for a dollar, then inflation for the 43 years was about 6.44%/year. Sounds about right given the inflation during the oil crisis of the early '70s.1944 $1 = 11 loaves of bread
1964 $1 = 5 loaves of bread
Today $1 = less than 1 (9/1987)
@ age 65 75% dependent
23% will be working
2% Fin Independent
14-15,000 yr.
As to financial independence, it doesn't seem to have changed all that much but think about how much it takes to be financially independent today. I'm sure that my mother was thinking for a couple, and probably in a paid off house, which theirs was. I'd guess about 50-60,000 in a major city - but not San Francisco where the average 2 bedroom apartment is over $3k/month - and a bit less in a smaller city. Taking the $15k and $60k that would be about 3.82%/year.
Fun, but a bit scary looking at the figures. I'm sure glad that I found the AIM book in my library. Given the inflation I see in the grocery store and buying decent but not extravagant shoes and my expected lifespan I'll really need to buckle down to making a bit of money to add to my SS and small pension.
For an idea of what my grocery inflation is I keep an eye on what used to be a cheap, tough, but tasty cut of meat, flank steak, that in 2006 cost $1.79/lb and now runs $6.49/lb. That is 17.46%/year, so now I only eat it on occasion where as I used to have it for breakfast often. Oh, well. I no longer have to worry about breaking my teeth on it.
Best,
Allen
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