patrick.net

AmericanKulak says

Dark Blue states should require gov pensions to go only to those who reside in the state 6 mos+ out of the year.

Correct. Or pass a law that allows the California gov to tax California pensions regardless.

I'm up 16% this year so I guess in real terms only 1% but I'll take it.

The previous post about inflation destroying the return you may have from investments was slightly misleading.

If you spend money at the rate of $50,000/year, what percentage is affected by inflation in the first place?
Maybe $30,000/year is consumables, so this cost to you was a $4500 increase.
Or, assuming all of your spending is affected by inflation, you saw an increase of $7500.

I of course don’t agree with the 15% inflation rate but it is not important for this.

Assume also that you had $ 1million bucks in your assorted 401k, IRAs, HSAs, annuities, etc.
Your net worth increased $250,000 or so in 2021.

Maybe you had $ 1/2 million bucks, you’re up $125,000 in 2021.

Investing is a great way to fight the effects of inflation on your life.

~270-280K, tax adjusted/after tax, on-paper. The bulk of which is real estate property value increases. I (or rather my renters and guests) will pay higher property taxes next year!

I got out of the stock market early or would have made quite a bit more

I still want my money back from losing 38 percent in '08-09.

AmericanKulak says

One thing I've always supported:

Dark Blue states should require gov pensions to go only to those who reside in the state 6 mos+ out of the year.

If you're a Cali retired teacher, no running to Arizona or Nevada to collect your $70k/year pension, you gotta stay in Cali and pay the big taxes.

Huge advantage: greatly disincentivizes migrant retired government workers going to red states and voting Democrat in retirement.

That would defeat the strategy of the dark blue states. These people fight long term battles.

WineHorror1 says

If you're a Cali retired teacher, no running to Arizona or Nevada to collect your $70k/year pension, you gotta stay in Cali and pay the big taxes.

I know so many of those. Not just Californians, but Yankees retired to Florida.

Why they stay. Formula: how much nice coastal beauty is worth the shit sandwich? Ocean is poo for a few days after rain, but Winter light is gorgeous on the Pacific.

B.A.C.A.H. says

Party On, Hipsters

Sadly, honest work pays less than pushing paper or electrons

Bd6r says

Sadly, honest work pays less than pushing paper or electrons

I liked it better when 'naked shorts' meant Playboy centerfolds.

Bd6r says

B.A.C.A.H. says

Party On, Hipsters

Sadly, honest work pays less than pushing paper or electrons

I would agree. If you had to eliminate 50% of a population, which jobs would you eliminate? Mostly those you could do without, correct? So, who is more important to a healthy economy/society...a mortgage broker or a person that stocks shelves at the grocery store?

From Dec 2020. Annual inflation rate by COICOP group.







clambo makes a good point about the need to consider the specific ways inflation affects you via thinking about which categories costs are rising in, and if you consume much in those categories (or are otherwise affected by them indirectly, like how rising fuel prices affects pretty much everything). I know they have a few different CPI models, but I think the main one focuses on typical urban spending, which probably doesn't align too closely to the spending patterns of the typical affluent / lots of stocks and assets that I think many here on patnet have.

I'm interested in that shadowstats inflation figure. Does anyone know what the categories and their weightings are in computing that 15% number is?

Maybe I'll start tracking my own spending so I can make break downs and compare to various CPI stats in the future.

Hircus says

Maybe I'll start tracking my own spending

Some here may have an oversized pie slice for alcohol.

WineHorror1 says

which jobs would you eliminate? Mostly those you could do without, correct? So, who is more important to a healthy economy/society...a mortgage broker or a person that stocks shelves at the grocery store?

Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes…Everyone from the elevator operator up was playing the market.

This sounds just like today even though it happened in 1920's. I am afraid consequences may be similar

Hircus says

I know they have a few different CPI models

CPLIE models.

Hircus says

Maybe I'll start tracking my own spending so I can make break downs and compare to various CPI stats in the future.

Was thinking of doing something similar but know I'm too lazy (or too busy depending on how you look at it) to track all that. Instead I decided I'd drop 100K into my daily driver bank account, put nothing into it and then seeing how much is left exactly 1 year from now.

Then on the side I was thinking I could make generalized estimates each month for categories by skimming my credit card receipt and counting recurring bills that are static.

I really don't know what I tend to spend in a single year for basics. I think it's maybe 70K. I'm pretty frugal.

I update the budget regularly, and now that I have no regular commute my biggest increase in the montly expenses has been food... but heating season isn't over yet so check back in late March.

As far as investments, I'm playing the long game since I have plenty of time (at least a decade, probably two) before I retire. Even if the market takes a dive, it (almost) always comes back if you can be patient. Right now, baring the unforseen, I have that kind of time horizon where the next crash will hurt, but won't cripple me.

As for this year, between the appreciation in the retirement accounts, paying down the (refinanced) mortgage and other savings / investments, the overall net worth increased 20% y-o-y. That may not sound all that great given the market gains, but given that I was unemployed Jan 1 last year (and have since found stable employment) I'll gladly take it.

This may be the year I start a small investment account on the side. My timing may be piss poor, but I'm ready to put a toe in the water on cryptos (only what I can afford to loose since it could go to zero) and mabey a few stocks. No idea which ones yet. I'm still trying to figure how much I have available for this side account, which I'll probably fund monthly to dollar cost average.

If this pandemic has taught me anything, life's to short to worry about finances. I'm comfortable and that's more than most can say, so I'm thankful for where I'm at.

At the end of the day it's not about the money in and of itself. But I will say that having a nest egg and a plan to get to retirement does give me peace of mind. As much as the math will tell you I shouldn't pay the house off early given my low rate, the peace of mind of having it free and clear before I retire is important to me. I'm "on pace" to have it paid off in six more years (we've lived here a decade already) not bad for a 30 year note.

clambo says

Investing is a great way to fight the effects of inflation on your life.

Great way? It’s the only way.

GreaterNYCDude says

At the end of the day it's not about the money in and of itself.

I agree entirely. Money is just a way to walk away from working for others.

I'm still working, but just for myself now, and on my own schedule, without even the need for a profit.

Patrick, how do you make money working for yourself?

I don't. But I don't need to anymore, as long as the market doesn't completely implode, which it might. Also, wife is working, which helps.

My personal project is a genealogy site just for my relatives, and their relatives, etc. I spent the better part of this year on it, and it's still not done. The money from that, if there is to be any, will be in printing nice books of the information for relatives who are interested. I have a lot of relatives, so this could be a living, but I've always wanted to print these books for posterity anyway.