September 6, 2013
It's Friday; let's have a little fun. I've put together a list of common products. They are items that you might buy on any given day, or perhaps every day. Each item is listed with its price adjusted for inflation after 10 years and also 20 years. I have assumed an average rate of inflation of 3%, which is in-line with the long-term historical average. Many items typically increase at a faster rate, but let's keep it simple:
| Item | 10yrs From Now | 20yrs From Now |
| 1. A Starbucks Latte | $5.38 | $7.22 |
| 2. A Gallon of Gas | $5.07 | $6.81 |
| 3. Toilet Paper | $8.06 | $10.84 |
| 4. Your Cable Bill | $161.27 | $216.73 |
| 5. A Dibella's Sub Sandwich | $9.41 | $12.64 |
| 6. A Draft Beer | $6.72 | $9.03 |
| 7. A Gallon of Milk | $4.70 | $6.32 |
| 8. Air Jordan Sneakers | $168 | $225.76 |
| 9. Two Movie Tickets | $26.88 | $36.12 |
| 10. A Dozen Wings | $13.43 | $18.04 |
The reason I've laid out these examples is to demonstrate how much purchasing power we lose over time to inflation. You might live 10 years in retirement or you might live 40 and it's important to plan for rising costs after you stop earning a paycheck and start relying on your savings. Everybody has different investment objectives and risk tolerances. However, if your investments aren't keeping up with inflation at the very least, you aren't protecting your wealth, you're eroding it.
Sam DiNorma
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).