Combating the Biggest Threat to Your Financial Plan: Inflation
Ron Guth, professional numismatist and I discuss inflation and the use of gold and/or silver in your portfolio.
Inflation continues to be a huge concern in the United States. An invisible and insidious tax, it threatens the sustainability of your best-laid retirement plans.
In previous decades, we projected a low-level inflation of about 2.5% humming in the background of financial plans. This level was well below historical equity returns, and so was combated almost effortlessly. While data as recent as May claims the annual inflation rate for the United States is 3.3%,1 for many of us, this seems lower than our experience at the grocery store.
The Real Impact of Inflation
To show how much a small increase in inflation can affect your retirement plan, consider some hypotheticals of the impact 2.5%, 3.30%, and 5% inflation has on your retirement plan. If you retire in 2024 with a $50,000 annual cost of living and live until age 85 (20 years)…
As you can see, your total cost of living increases by about 30% between a 2.5% and 5% inflation rate, or by about $375,000. This is a significant gap that will need to be covered by additional savings are increased investment growth.
What Should be Done
In my own practice, I despise inflation more than any other financial hurdle. It’s something that not one of us has any control over, yet it thwarts the foundations of some of even the most financially responsible people.
Some experts recommend using precious metals—(specifically gold or silver) to hedge for inflation. This last week I had Ron Guth, C.P.A, and professional numismatist, on my podcast. We talked in detail about historical inflation trends, inflation in the United States, and options to hedge using gold or silver. It was a fun and informative conversation which will give you some perspective on inflation in the United States, and if you should consider hedging. There is more to consider than what is presented in TV ads on cable news.
And just like that, it is summer in the North Country!
I love summer season in our region—though to be fair, I love every season here. Our garden has started producing, Tennessee Time is launched, and we are getting ready to host a big July 4th party in the coming weeks.
First long excursion on Lake Ontario!
Weekly Rewind: Recent Videos & Lives
📽️Ditch Stock Picking! Why You Need to Use Index Funds
Looking to build wealth through investing but overwhelmed by the endless stock options out there? Learn why index funds are the ultimate investment strategy for long-term success and financial security. Say goodbye to the guesswork of stock picking and hello to the simplicity and effectiveness of index funds.
📽️3 Strategies to Pay Off Your Mortgage Early
In this video, we discuss 3 effective strategies to pay off your mortgage early and become debt-free faster. These mortgage payoff hacks will help you save money on interest and achieve financial freedom sooner. Whether you're a first-time homebuyer or a seasoned homeowner, these tips will empower you to take control of your finances and build wealth through real estate.
🎙️Live This Week (Friday, 10am EST)
Index Funds vs Stocks: Shocking Case Study Reveals Who Wins Every Time
Are index funds a better investment option than individual stocks? In this live I will compare the short, mid, and long-term outcomes of investing in stocks versus index funds. This live will compare: diversification, performance, and fees and show how these different aspects of stocks or index funds impact an investor’s success. By the end of this video you will understand why index funds are superior to individual stock investing.