SF Fed President Mary Daly: "I Don't Feel the Pain of Inflation Anymore."
I know, I know.
I'm on the Earn More camp, but even I cringed upon reading what that SF Fed President said too!
How can she make my humble "I have enough" sound so arrogant and so insensitive!?
Those of you older ones may remember this similar incidence in Singapore during the 2009 GFC:
Tan Yong Soon Rapped By His Boss For Insensitivity
Who knows?
Maybe one day FIRE will be out-of-fashion, and it gets replaced by WHEN can we reach our INFLATION PAIN FREE stage?
How much in dollars?
Well, as a start, it would be around SGD $450K annual income - doesn't matter whether its active or passive.
If passive, even better of course!
You know why there's a bit of schadenfreude from the general public when cryptos crashed?
That's because of those insensitive crypto "millionaire" influencers who mocked those who didn't follow them, "Have fun being poor!"
Wait.
I'm looking into the mirror now.
There's a reason why the general public also cannot stand the FIRE community too. Wink.
Smol,
ReplyDeleteMaybe prices for high SES category coming down? Peak inflation? Lol.
CPI for billionaires went up a lot last year. But collectively, billionaires' networth went up 3 times higher than their inflation! Earn more is really earn more lol.
No info for 2022 yet.
Ya I'm also interested to see whether any high profile FIRE'er has to go back to work.
Took a peek at millennial-revolution website. Appears that Kristy Shen & Bryce Leung haven't had to yet.
Then again, their blogging & social media efforts bring in big active income in itself! ;)
Spur,
DeleteInflation is not a problem if our incomes or assets increase more than the inflation rate.
That's why big daddy has to Earn More!
Sri Lanka is the cautionary example... Try telling the Sri Lankans to "Save More"...
Mr Moustache's blog alone brings in hundreds of thousands each year.
It's a bit funny. Those who said they are already on FIRE, seems to be earning "active" income some way or another?
Either through selling books, courses, workshops, advertorials from their blogs, etc.
There's big money in "selling" aspirations and hope!
In bull markets, everyone is an easy sell.
But in bear markets...
Even in the seemingly "safer" Save More camp, 4% compounded annually makes sense only if the inflation rate is below 4%.
But if the inflation rate is above 4%, where is the compounding?
That's the question investors in US treasuries are probably asking...
If they think the US Fed is not serious about fighting inflation, look out below!
I find inflation an interesting topic.
ReplyDeleteIt affects spenders. If you earn 5k, spend 5k last time. Then with inflation at, let's say, 10%, then to keep the same level of lifestyle, you would need 5500.
But that's not to say that someone couldn't live very well on 2k.
So I feel it really is a function of income (active or passive), vs spending, vs lifestyle.
Someone earning 1000, inflation confirm hit him hard.
Someone earning 5000, if his lifestyle is 5000, then he gotta suffer cos life not as good anymore. But if he spend 2000, then inflation not gonna do much to him.
Someone earning 1m, if his lifestyle is 1m, then inflation also gonna hit him hard, sia suay you know for someone at that level to downgrade his lifestyle. But if he spend 500k, then the inflation is supsup suay.
The thing is, I find the economy in general is for consumption. That's what makes the world go round. A lot of people don't really save or invest. Which leads me to think that most people spend most of their paycheck which also means, inflation will tend to affect them, cos they have to change some lifestyle choices.
The less you spend, the less inflation will hit you...
20% inflation on free... is still free.
ERSG,
DeleteEarn 5,000, spend 5,000 - if inflation is 10%, he does not "suffer" if he has access to credit cards ;)
In Singapore, the maximum credit card limit is 4X monthly salary.
So there's a lot of headroom for wine, women, and song!
Of course it will end in tears if he suddenly got retrenched; or got into an accident that rendered him unfit for work...
On the other side of the coin, to freegans who have access to "free" food and stuffs, inflation may hit them the least...
That's provided their sources of "free" don't dry up as well.
When prices are high, people tend to waste less... Eat water-melons all the way to the green bits?
If I take a historical stance, runaway inflation is bad for EVERYONE - even land owners.
Riots, wars, and regime changes usually follow next.
I don't ask for much. I just hope for the next 40 years, no major wars; famine; or pestilence (Wuhan virus mutations).
Then I can go with a smile at age 95 - market timed perfectly when my 30 year Lease Buyback Scheme with big daddy runs out :)
Earn more is a better way to fight inflation. How to earn more as retirees? Tough time ahead!
ReplyDeleteCW,
DeleteLike you've always said, SIZE matters!
You don't want to be retired at age 65 to only now realise 1M for two is minimum PC requirement...
And only now start on the path of Earn More from age 65 to shoot for 4M by 75 to catch up with inflation!?
4 bagger in 10 years with ZERO Earn More track record...
Good luck!
The alternative is to NEVER retire.
Put into s&p 500 ... total returns 4.6X from 2012 to 2021.
DeleteOf course history seldom repeats, but hopefully it rhymes? Lol.
Spur,
DeleteYup, if we selectively pull such charts to show bei kambings, we can sell anything!
I'm sure the chart of Luna (before the crash) would be even sexier too ;)
Jokes aside, even the Singapore born and bred passive "investor" in STI ETF would be feeling not so shiok if they compare their performance with that of those "ang moh tua kee" who passively invested in S&P 500 ETF for the past 10 years.
Best they can do is to be smug that STI has gone down way less than the S&P 500 over the past 1-2 years... Hey! We have finally outperformed!
Active investing is hard; passive also no guarantee.
Let's "ignore" inflation and stick with Save More!
Look! Save More always goes up!
Psst, anyone interested in my sock money under the mattress strategy?