It’s episode 27 of Payne Points of Wealth and inflation has arrived. Don’t say we didn’t warn you. We’ve talked about inflation and now it’s here. Commodity prices are going through the roof as energy prices are up over 20%, lumber prices are up over 50%, and corn is up over 30%. The cost of living is going up. How do you position your portfolio? We’re going to show you exactly how to invest your money. We’re also digging into what you should think about when you’re 30, 40, 50, 60, when it comes to your financial plan? We’re going to tell you exactly what you need to be thinking about at each stage of your journey.
You will want to hear this episode if you are interested in…
- What is inflation? [3:42]
- Weapons of mass financial destruction [5:31]
- Old school over new school [7:36]
- The Tipping Point [10:26]
- Funding in your 30’s [10:46]
- Budgeting in your 40’s [13:20]
- Closing in on financial independence in your 50’s [15:12]
- Building a retirement income plan in your 60’s [16:42]
- Scary RMD’s in your 70’s [17:37]
- Hidden Facts of Finance [20:24]
Do you have a portfolio that can deal with inflation?
The simplest economic term for inflation is having too many dollars chasing too few goods. One of the big problems right now is the government has created so much money— in fact, the money supplies have increased by 26%— that’s the most since 1943. What that means is there’s a lot of money out there and all those dollars are going to be chasing a finite amount of goods. When you talk about things like oil, gold, or copper, they’re all finite. It increases the prices because the supply and demand get out of whack. Right now there’s just too much money out there and that’s the inherent problem, that’s what causes inflation.
Just a year ago even a couple of months ago, no one expected inflation to go up at all. Now you can see it right across the board. The best indication you have is interest rates going up. Now, how does that impact you and your portfolio? Check out the show to find out!
This week on the tipping point: Ages & stages of financial planning
The first 30 years of life seem to tick by slowly and the next 30 are gone in the blink of an eye. As we like to say at our firm— Payne Capital Management— financial planning is a journey, not a destination. Depending on where you are in that journey, there are different issues you have to address at different ages. What should you do if you didn’t do anything in your 30’s or even 40’s? Just start now, get in where you fit in.
Listen to the episode as we discuss some of the steps you should focus on at each age. Funding in your 30’s. Budgeting in your 40’s. Closing in on financial independence in your 50’s. Building a retirement income plan in your 60’s. And dealing with scary RMD’s in your 70’s.
This week’s hidden facts of finance
Walmart is still the world’s largest retailer when measured by revenue, not Amazon. With 2021 fiscal sales of 559 billion or larger than all the 21 country’s gross domestic products.
The 90-year-old empire state building said in its fourth-quarter financial results, that the number of visitors to its Observateur declined by 94% in the fourth quarter of 2020 to 55,000 from 894,000 people visiting just a year earlier. It sounds like New York’s become a ghost town.
During 16 post-war periods in which interest rates went up, the S&P 500 was up in 13 of those windows with an annual rate of return of 13%. In other words, rising rates and rising stocks go hand in hand more often than not. Stocks are actually an inflation hedge.
Resources & People Mentioned
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