Inflation, Why Do We Have It, What To Do About It & How Does it Affect Retirement? – Finger Financial Five #73

“Inflation is taxation without legislation.” – Milton Friedman

Inflation. Inflation. Inflation.

Why do we have it? What to do about it? How does it affect retirement? 

Over the past year, prices for goods are up 14.4%, while prices for services have risen 7.8%. 

Producer prices are up 10.0% versus a year ago

Energy prices rose 8.2% in February, while food prices increased 1.9%. 

(Source: PPI February 2022, U.S. Department of Labor)

Why did the prices rise so much?

Let me share with you a story…

Saturday I was signed up to do an ultra-marathon in Antelope Canyon in Page, AZ. Thirty-four miles of one of the most photographed areas of the country. Last year, I completed a full Ironman in September which is 140 miles of swim, bike, run.  Then I did a Half Ironman in October. 

I slacked off in my training during November and December.  Not surprisingly, I gained a little weight. 

That extra weight made each step in the desert more difficult.  When you combine that with the fact that you’re running in sand and in constant elevation changes, the difficulty is compounded. In other words, it took more energy to take a step because of the extra weight.

What does this have to do with inflation? 

The government increased the money supply by 40% in response to COVID. The whole country took time off — kind of like what I did in November and December. This comes with consequences. 

When the money supply is increased, more money is needed to buy the same goods and services as before.  Just like my “weight inflation” caused me to have to spend extra effort to move in the desert. 

Prices rise.

What to do about it? 

The government is considering an increase in interest rates in order to reduce the amount of money available to consumers. This is like eating less and working out more – it gets things back on track. Not many worthwhile things can be accomplished without at least a little pain. 

We can deal with this by spending our money differently. 

3 ways to get more happiness out of money:

  • Buy experiences instead of stuff
  • Delay your gratification instead of borrowing to have it now — saving for big purchases builds excitement in anticipation.
  • Buy time and use that time doing something meaningful

“But Jeremy, I want to have more money and prices not rise!”

Yeah, me, too, but…

There is no magic. Get the big stuff right and enjoy your life. 

Reread What to do when markets get volatile.    

Stick with your game plan. If you don’t have one, email me at [email protected] or CLICK HERE to set up a phone appointment.

On the lighter side, Antelope Canyon was absolutely beautiful. See pictures below. Just buying experiences…

Hope all is well with you and your family,


P.S. You can register for upcoming webinars by clicking here and scrolling to the bottom of the page. Hit “register for our next free webinar”. 

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so you will have more clarity and peace and make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.


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