Row 66259

Row ID: 66259 | Dataset Entry | Axioma AXP Content Repository

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This page contains data entry 66259 from the Axioma AXP content repository. The structured data below represents the complete record for this entry.

You don’t need to know how inflation works, but you have to know it’s there and it’s effects. So I’m saying you don’t need to know it’s origins and the levers that make it work, you just have to know the effects.

this is the problem with stuff like houses. People have been tricked into believing homes are super investments because almost all the time frames they’re looking at are decades. And they’re not factoring in inflation—amongst other expenses.

I just did one of those inflation calculators based on historical data.

So if you bought a house in 1950, for $50,000, and you sell it in 2024 for $650,000, how much money did you really make?

The answer is exactly $0.00. Because that is the rate of compounding inflation. If you sold it for that much and bought it for that much in that timeframe, you perfectly broke even. And that’s a hard concept to wrap your head around.

If you factor in taxes, repairs, time spent, mortgage, people, toilet papering your front lawn, etc. Then you lost a bunch of money. I mean a lot of money.

That’s the big Takeaway that people need to learn from inflation. If you leave your money in the bank(in some checking account with sub interest ) or under the mattress. Then you are losing money every single year.

if you got 50 grand sitting under your mattress, it’s a pretty lumpy mattress, every year you’re getting inflation % less money. It’s hard to conceptualize and you don’t see it disappearing, but your purchasing power is going down by that much.

But again, what really pisses me off are the housing prices. Because it’s one of the few places where we’re really looking at massive long-term investments. Most people don’t know a grandmother or grandfather who has 50,000 in the S&P 500 back in 1950. And can quote off the top of their head how much it’s worth now. But they can all do it with the family house . But the results are incredibly misleading.

FieldValue
text You don’t need to know how inflation works, but you have to know it’s there and it’s effects. So I’m saying you don’t need to know it’s origins and the levers that make it work, you just have to know the effects. this is the problem with stuff like houses. People have been tricked into believing homes are super investments because almost all the time frames they’re looking at are decades. And they’re not factoring in inflation—amongst other expenses. I just did one of those inflation calculato…
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-23
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Raw Record

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  "text": "You don’t need to know how inflation works, but you have to know it’s there and it’s effects. So I’m saying you don’t need to know it’s origins and the levers that make it work, you just have to know the effects.\n\nthis is the problem with stuff like houses. People have been tricked into believing homes are super investments because almost all the time frames they’re looking at are decades. And they’re not factoring in inflation—amongst other expenses.\n\nI just did one of those inflation calculators based on historical data. \n\nSo if you bought a house in 1950, for $50,000, and you sell it in 2024 for $650,000, how much money did you really make?\n\nThe answer is exactly $0.00. Because that is the rate of compounding inflation. If you sold it for that much and bought it for that much in that timeframe, you perfectly broke even. And that’s a hard concept to wrap your head around.\n\nIf you factor in taxes, repairs, time spent, mortgage, people, toilet papering your front lawn, etc.  Then you lost a bunch of money. I mean a lot of money.\n\nThat’s the big Takeaway that people need to learn from inflation. If you leave your money in the bank(in some checking account with sub interest ) or under the mattress. Then you are losing money every single year.\n\nif you got 50 grand sitting under your mattress, it’s a pretty lumpy mattress, every year you’re getting inflation % less money. It’s hard to conceptualize and you don’t see it disappearing, but your purchasing power is going down by that much.\n\nBut again, what really pisses me off are the housing prices. Because it’s one of the few places where we’re really looking at massive long-term investments. Most people don’t know a grandmother or grandfather who has 50,000 in the S&P 500 back in 1950. And can quote off the top of their head how much it’s worth now. But they can all do it with the family house . But the results are incredibly misleading.",
  "label": "r/investing",
  "dataType": "comment",
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  "datetime": "2024-05-23",
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