Literally. My ass disagrees.
I was in the middle of my morning routine, when I noticed.
I had reached for a new role of toilet paper, tore off the requisite 4 squares, & folded it just right. But just as I went to use my little origami masterpiece, the world as I knew it was flushed.
Fast on my feet, even early in the morning, I reached for the old paper tube (discarded on the floor so I could take it to the recycle bin) and held it up against the new role. My eyes confirmed what my ass already knew. Toilet paper inflation has cut the width of my role by at least a quarter inch.
Interestingly, and way more disturbing ((I have a very difficult time with being touched by strangers, unavoidable on airplanes, but with so little personal space it’s excruciating mentally for me to sit in these way-too-narrow seats.)), was an article in the Wall Street Journal analyzing airplane seat width I read just prior to this discovery.
What does this have to do with building wealth?
It’s a real-world demonstration of inflation. Even if the reported inflation numbers are low, we’re still experiencing “getting less for the same amount of money” across a wide variety of non-discretionary items.
Hold On a Second Dave! Airfare is not non-discretionary.
You may not think of airfare as non-discretionary. Technically, you’d be correct.
However, I know that when I retire I’m going to want to be able to fly to visit my children. And my grandchildren. I might like to travel and experience some new places. So while technically discretionary, the future we see for ourselves (in retirement, or before then) probably includes enjoying the fruits of our labors. That enjoyment will cost money. Money you won’t have if you think of being wealthy as the size of your paycheck, and your paycheck doesn’t keep up with inflation.
What is Measured Matters & You Need to Take Responsibility
In a complicated world, you need to take some measure of responsibility and understand when someone is giving you a line of shit. The banks totally took advantage of people with the whole mortgage thing, but… I strongly believe that people should have taken more responsibility to understand what would mean when their ARM started to adjust. The huge interest payment increases should have been expected, and at some point they should have asked themselves “what if I can’t refinance again at that point in time?”
It’s the same thing for retirement planning. We see (and feel) the effects of inflation and if we’re paying attention realize that costs are going up more than the percentage point or two the government reports. We can ignore the future impact of these increases, but they’re just as real as those ARM adjustments. And, it’s going to be equally ugly financially and too late in life to recover.
Inflation, real-world inflation like my ass noticed this morning, is real. It will have a real impact on the quality of our lives as we shift our priorities from work to “slowing down”, especially considering our stagnant wages (and another reference about how the typical American family makes less than it did in 1989). If you want to be able to enjoy some measure of luxury ((Is visiting your family a luxury? Where are our values if that’s the case?)) you must build wealth over time with a blueprint like the Elephant’s Paycheck.